Industrial IoT is making headlines for its potential to improve the way organizations operate in many domains. Engineers and managers in several industries are exploring ways to boost efficiency with IoT systems. In addition to improving food safety and manufacturing efficiency, IoT is powering smart city efforts to optimize municipal fleet efficiency and water management, smart dairy farms that use IoT wearables to increase milk production, and remote patient monitoring equipment to help people and their healthcare providers better manage serious chronic medical conditions. The key to all these processes is data collection enabled by IoT devices.

But how, exactly, does IIoT implementation and data collection lead to gains in efficiency? For manufacturers, a key performance indicator related to efficiency is Overall Equipment Effectiveness (OEE). OEE is a manufacturing-specific calculation, but its principles can be adapted to other sectors to identify areas where efficiency gains are possible—if there’s a way to implement IIoT data collection and analysis.

Greater Efficiency Requires Better Data
Before managers can make any process more efficient, they need benchmark data. To find the OEE of their line equipment, manufacturers use a formula: Availability x Performance x Quality. Availability is the ratio of actual run time to planned production time. Performance compares actual cycle time to ideal cycle time. And Quality is the ratio of in-spec finished products to total finished products.

It’s not necessary to use real-time data to calculate OEE—the OEE equation was developed in the 1960s, well before Wi-Fi sensor networks and cloud computing were on the horizon. But real-time data provides a clearer and more detailed OEE picture. For example, managers can identify seasonal, weekly, or daily fluctuations in equipment effectiveness with ongoing data collection and analysis…

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