labor cost tracking

25 years of WWW to IoT labor cost tracking …

It is an understatement to say that technology evolves very rapidly. For example, very quietly, the world wide web turned 25 this week. (As an interesting anecdote, Tim Berners-Lee originally wanted to call it the “Mesh” before settling on the “world wide web” in 1990). We cannot imagine life today without the internet, but as recently as 2000 less than 50% of the adults in the US had acces to it! 

This article is about the so-called “next big revolution” in technology, the much hyped internet of things (IoT). More specifically, it is about IoT labor cost tracking. It shows how connecting people, devices and machines can return a real benefit to business. If you are wondering what exactly IoT is or are confused by terminology, Gartner’s recent description of IoT or IoE can help clarify nicely:

What exactly is IoT or IoE? What is IoT labor cost tracking?

“The Internet of Things encompasses hardware (the ‘things’ themselves), embedded software (software running on, and enabling the connected capabilities of the things), connectivity/communications services, and information services associated with the things (including services based on analysis of usage patterns and sensor data). The companies that provide this hardware and these services will be referred to as Internet of Things Suppliers”.

A Cisco report on the impact of internet of things (“internet of everything or IoE”), identified the impact of IoT on labor efficiency. The report estimates that there is a potential value in excess of $2.5 Trillion (with a “T”) to be realized purely from improved productivity and labor efficiency using IoT

A small manufacturing business example

We cannot debate these claims today. There is a growing realization among many businesses that connecting employees, devices and machines can produce an improved bottom line. One of our customers is a small contract manufacturing business that employs about 50 employees. One of the key issues the CEO/CFO faces is that he does not have a good idea about the effort their line workers spend on each project they work on. A granular view of the portion of costs that comes from labor on specific project can give insights about the overall profitability of each project. Today their total labor cost is one blob which has to be manually distributed across all their current projects.

They have realized the value of the information from the data generated by a connected network of employees and workstations. They have instrumented their shop floors with an overhead GPS system. This communicates with their employees via an RFID type lanyard which they wear. The shop floor is divided into several zones, where each zone is set up to handle a specific activity. They can have zones divided by a specific product line and zones divided by an activity such as inspection. As employees move about from one zone to the next, the network recognizes this and generates a message. An example is show below:

[01/29/14 16:42:55,, unknown]: spatial_monitor: Alan entered Inspection Room (Zone Role contains Person role)
[01/29/14 16:48:57,, unknown]: spatial_monitor: Alan left Inspection Room (Zone Role contains Person role)

We first aggregate these messages into a log file. Secondly, we process round the clock to accommodate the multiple shifts which they operate. Finally convert the log file data into manageable tables. It is very easy to generate sophisticated and highly interactive dashboards enabled by this IoT labor cost tracking setup.

Clearly there are several steps to take between setting up the hardware and obtaining these usable dashboards and insights. 

Originally posted on Fri, Mar 14, 2014 @ 09:35 AM

Photo by Remy Gieling on Unsplash

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