IndustrIal Iot Case study:

Ericsson smart Factory

2018
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About the GSMA Internet of Things Programme About Ericsson

The GSMA’s Internet of Things Programme is an Ericsson enables communications service providers to
industry initiative focused on: capture the full value of connectivity. The company’s
portfolio spans Networks, Digital Services, Managed
Ô COVERAGE of machine friendly, cost effective Services, and Emerging Business and is designed to
networks to deliver global and universal benefits help our customers go digital, increase efficiency and
Ô CAPABILITY to capture higher value services find new revenue streams. Ericsson’s investments in
beyond connectivity, at scale innovation have delivered the benefits of telephony
Ô CYBERSECURITY to enable a trusted IoT where and mobile broadband to billions of people around the
security is embedded from the beginning, at every world. The Ericsson stock is listed on Nasdaq Stockholm
stage of the IoT value chain and on Nasdaq New York.

By developing key enablers, facilitating industry

collaboration and supporting network optimisation, the
Internet of Things Programme is enabling consumers
About the Mobile IoT Innovators
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connected by intelligent and secure mobile networks.

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IoT Innovators provide a vibrant ecosystem around
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Industrial IoT Case Study: Ericsson Smart

Industrial IoT Case Study: Ericsson Smart Factory

Contents

Executive Summary 1

Introduction 2

How Ericsson is making its factories smart 4

How manufacturing benefits from Mobile IoT 7

Conclusions and next steps 8

Industrial IoT Case Study: Ericsson Smart Factory

 Industrial IoT Case Study: Ericsson Smart Factory

Executive Summary
Mobile Internet of Things (IoT) technologies are set to play a central role in the smart
factories of the future. Telecoms equipment maker Ericsson is using the cost-effective and
reliable connectivity provided by Mobile IoT networks to make its factories in Sweden,
Estonia and China more efficient and flexible. Ericsson has found that Mobile IoT and other
cellular networks can support a wide range of different manufacturing use cases, making it
possible to optimize manufacturing processes via a single communication system.

The Ericsson Panda manufacturing plant in Nanjing uses says this flexibility will become even more important as
NB-IoT to connect 1,000 devices within the factory. factories increasingly use automated guided vehicles in
The connectivity is used to monitor the location of place of fixed conveyor belts.
critical assets, the output of workstations, stock
levels, environmental factors and the performance of Mobile IoT technologies are particularly well suited
test fixtures and production tools, such as the high to industrial use, as they are reliable, secure and can
precision screwdrivers used on the production line.  support a high density of devices. As production
For these connected high precision screwdrivers, having plants become increasingly reliant on cloud-based
usage data means the manufacturing operations systems for automation and ultimately self-optimisation,
manager can gauge exactly when these tools need to Ericsson estimates that a typical smart factory will need
be recalibrated based on their actual use rather than on to connect 1 device per two square meters.
a predetermined periodic basis. Ericsson anticipates
this solution alone, which only costs US$20 per Ericsson notes that a cellular network can be configured
screwdriver, will cut manual maintenance work in half, to prioritize data traffic with congestion control, enabling
saving US$10,000 annually. it to support many use cases within the same system.
Furthermore, Mobile IoT networks build on a proven,
In general, Ericsson is finding mobile IoT connectivity interoperable ecosystem of base-stations and terminals,
has major advantages over alternatives. It estimates further strengthening both dimensions.
cables, which are prone to connector failures, can cost
up to €200 (US$230) per metre to install and maintain, Over time, the role of cellular networks in manufactur-
but wireless sensors are simple to retrofit to existing ing is set to expand deep into the factory. As production
industrial equipment, which can have lifetime of up to 30 plants are increasingly integrating automated and self-
years. Moreover, a wireless solution can support flexible optimising logistics and supply chains which ensure the
production lines, which are configured on-demand and timely arrival of resources and allow factories to quickly
are now a feature of modern manufacturing. Ericsson reconfigure themselves in response to varying demand.

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Industrial IoT Case Study: Ericsson Smart Factory
Industrial IoT Case Study: Ericsson Smart Factory

Introduction
Factories are getting smarter and smarter. By capturing information in real-time and
enabling remote control of machinery, the Internet of Things (IoT) can increase efficiency
and enhance the value manufacturers can provide to customers. In fact, the IoT, along with
artificial intelligence and cloud computing, is one of the key enablers of Industry 4.0, the
term used to describe the next industrial revolution. Industry 4.0 will be characterised by
self-optimising production facilities that process a continuous flow of information to
automatically adapt to events, such as a supply shortage or a new customer requirement
(see Figure 1). Realising this vision will require the factory’s central control system to have a
detailed digital model of every asset and piece of infrastructure (a digital twin), which can
be continually updated in real time.

Figure 1: Industry 4.0 envisions self-optimizing factories

DIGITALIZATION INDUSTRY 4.0

How can
autonomous
repsonse be
achieved?
VALUE

“Self optimising”

What will
happen?
“Being
What is prepared”
happening?
What is “Understanding”
happening?
“Seeing”
PREDICTIVE
COMPUTERIZATION CONNECTIVITY VISIBILITY TRANSPARENCY CAPACITY ADAPTABILITY

1 2 3 4 5 6

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Industrial IoT Case Study: Ericsson Smart Factory
 Industrial IoT Case Study: Ericsson Smart Factory

1955 Business Model

Product volume per model

Advances in cellular technologies are now Mass 1980
enabling the industrial IoT to expand rapidly. Production
In particular, new Mobile IoT technologies are well 1994
Mass
H
PUS
placed to serve factories’ connectivity needs – Customisation Personalised
they are designed to support a large number Production
L
of connections in a small area, while also PUL
providing excellent coverage. 1913

Craft 1850
Production

Delivered through a straightforward upgrade to a 4G Product variety

(LTE) network, Mobile IoT technologies - NB-IoT and
LTE-M 1 – can provide low-power wide-area coverage Figure 2: Manufacturing is increasingly meeting the
across industrial plants. As the number of demand for personalised production
deployments rises, economies of scale are kicking in,
cutting the cost of modules which are being used in
high volumes. This virtuous circle is further accelerating Ericsson is exploring three main categories of use cases
the growth in Mobile IoT connections. GSMA Intelligence for the deployment of Mobile IoT in factories:
estimates the number of Mobile IoT connections
worldwide will rise from 66 million today to 1.8 billion 1. Automation – the production line is remotely
in 2025. controlled using increasingly smart systems hosted in the
cloud.
Manufacturing is set to be one of the leading
adopters. As the cost of NB-IoT and LTE-M modules fall, 2. Monitoring – the performance of equipment is
it is becoming feasible to connect almost every asset in continually monitored for quality control and to enable
a factory, allowing production managers to quickly predictive maintenance.
identify and resolve operational challenges arising
from the growing pressure to be both efficient and 3. Tracking – the availability, volume and location of
flexible – in the last decades the need for customization stock and equipment is tracked.
is increasing, customers are looking for a broader mix
of products tailored to their specific requirements This paper outlines how Ericsson, a leading supplier of
(see Figure 2). Customisation requires operational telecoms equipment, is harnessing Mobile IoT
processes and production lines to be reconfigured technologies to improve its own manufacturing
quickly, without compromising on safety processes.
or quality.

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1
LTE-M (Long-Term Evolution Machine Type Communications) also known as Cat-M1

Industrial IoT Case Study: Ericsson Smart Factory

Industrial IoT Case Study: Ericsson Smart Factory

How Ericsson is making its

factories smart
Ericsson factories in Stockholm, Sweden, Tallinn, Estonia and Nanjing, China are fast-tracking
the introduction of a new generation of smart manufacturing technologies. By employing
Mobile IoT connectivity to improve processes in a real manufacturing environment,
Ericsson is aiming to help this new wave of technology enablers to mature more rapidly.
Ericsson’s factories are employing Mobile IoT technologies in many different ways:

Tracking critical equipment Ericsson has installed a wireless Andon system to enable
machine operators on its production lines to call for
technical support when a quality problem occurs.
Historically, this has been an inflexible wireline system
in which the shift leader got the call on his or her screen
and then had to manually find the right engineer to
address the problem. But the new Mobile IoT LTE-M
solution uses VoLTE to make a call directly to the right
engineer from the line, reducing the lead-time for
problem-solving.

Ericsson is using NB-IoT-enabled sensors to track if

critical equipment has been moved. As a result, key
Monitoring output of workstations
assets can now be located immediately, while paperwork
is reduced and there is less risk of important equipment
going missing.

Streamlining the Andon System2

Ericsson has added sensors3 with NB-IoT connectivity

to workstations on its manufacturing lines to enable
real-time monitoring and analysis of production data,
which can then be used to guide dynamic adjustments
to the production plan.

2
Andon system – a signalling system used to notify for support in manufacturing.
3
Sensors sourced from Mouser Electronics Inc https://www2.mouser.com/

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Industrial IoT Case Study: Ericsson Smart Factory
 Industrial IoT Case Study: Ericsson Smart Factory

Environment monitoring In its 40,000-square metre plant manufacturing

radio equipment in Nanjing, China, Ericsson Panda
Communication employs many high-precision
screwdrivers. The screwdrivers, which cost US$1,500
each, require routine calibration and lubrication based
on utilisation times.

“They need to be calibrated to the right torque in order

to secure quality and performance of our products,”
says an Ericsson Panda spokesperson. “The interval of
the calibration is related to the number of operations
In some factories, environmental conditions, such the screwdriver has done. As there is no counter in the
as humidity levels and air temperature, need to be screwdriver there is no way of knowing the number of
maintained within certain parameters. Although wired operations an individual screwdriver has done. Because
sensors can monitor the climatic conditions, NB-IoT has of this, the calibration has been done with a fixed time
made it cost-effective to use wireless sensors, which can interval.”
be deployed easily and then moved from place to place,
as required. Whereas this maintenance was a manual procedure
performed periodically and documented in hand-written
Monitoring the contents of logs, the high-precision screwdrivers have now been
material boxes fitted with real-time motion sensors attached to NB-IoT
modules. Every eight hours, the modules transmit about
100 bytes of data indicating how much they have been
used in the preceding period.

The data is then captured in Ericsson Panda’s private

cloud system, which makes automatic calculations and
analysis about the tools’ utilization and condition status.
The cloud-based quality-monitoring system also
indicates when certain thresholds are reached, enabling
predictive maintenance that extends the service life of
Ericsson is adding NB-IoT-connected pressure sensors to these expensive screwdrivers considerably.
storage boxes to enable real-time monitoring of how full
they are. Previously, the material level in the boxes had
to be measured manually and then recorded by scanning
barcodes.

Calibrating high-precision
screwdrivers

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Industrial IoT Case Study: Ericsson Smart Factory
Industrial IoT Case Study: Ericsson Smart Factory

To develop the solution, Ericsson integrated a motion 5G factory in Stockholm. As a result, Ericsson can
sensor from ADI with an NB-IoT module from Simcom. better track maintenance and perform calibration to
As the cost is only about US$20 per device, the factory optimise the radio frequency (RF) performance of the
now plans to completely phase out manual tracking. test fixtures. The NB-IoT-connected monitors are
Ericsson Panda anticipates improved detection of human necessary because the number of logical tests tracked
errors will reduce maintenance material expenses by in the fixtures’ software does not represent the true
US$1,000 each year, while manual maintenance work will number of physical connections. The NB-IoT enabled
be cut in half, saving US$10,000 annually. “By connecting solutions can prevent the fixtures from being overused
our high-precision screwdrivers, we will see a 50% return and RF performance is lost. The result is a reduction in
on investment in year one. And, breakeven is reached in maintenance costs and improved testing performance.
less than 2 years,” said Tomas Qvist, President, Nanjing
Ericsson Panda Communication.

Optimising test fixtures

Ericsson is using NB-IoT to monitor the number of
connections being handled by the test fixtures in its

“ By connecting our high-precision

screwdrivers, we will see a 50% return on
investment in year one. And, breakeven
is reached in less than 2 years,
“ Tomas Qvist, President, Nanjing Ericsson Panda
Communication

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Industrial IoT Case Study: Ericsson Smart Factory
 Industrial IoT Case Study: Ericsson Smart Factory

How manufacturing benefits

from Mobile IoT
For manufacturers, mobile IoT connectivity has several key advantages over alternatives.
Whereas Ericsson estimates cables, which are prone to connector failures, can cost up to
€200 (US$230) per metre to install and maintain, wireless sensors are simple to retrofit to
existing industrial equipment, which can have a lifetime of up to 30 years. Ericsson has found
that a Mobile IoT system can yield potential savings of approximately €200 (US$230)
per added sensor when adding a simple sensor to the shop floor.

Moreover, cables have to be fixed in place, meaning a higher density of devices. Cellular systems are designed
they cannot support flexible production lines, which are to only admit and manage trusted identities and data in
configured on-demand and are now a feature of modern the network and are based on global 3GPP standards
manufacturing: The Ericsson factory in Tallinn changes with strong security mechanisms.
lines every other week. In a similar vein, cables are not
well suited to connecting moving assets or free-standing Ericsson also notes that a cellular network can be
objects, such as rotating, moving machines and portable configured to prioritize data traffic with congestion
tools and materials. By contrast, a wireless solution offers control, enabling it to support many use cases within the
full mobility and flexibility, enabling the manufacturer same system. By comparison, industrial Wi-Fi is a highly
to collect intelligence throughout the site. Ericsson says fragmented market, characterised by many separate
this flexibility will become even more important as plants commercial solutions.
replace fixed conveyor belts with automated guided
vehicles, a market that will triple by 2024, according to
some forecasts 4 .

Ericsson believes the most suitable wireless technology

for industrial use is cellular, as it offers a higher level of
reliability and security than alternatives and can support

4
http://www.dcvelocity.com/articles/20170125-report-global-agv-sales-will-nearly-triple-by-2024/
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Industrial IoT Case Study: Ericsson Smart Factory
Industrial IoT Case Study: Ericsson Smart Factory

Conclusions and next steps

For manufacturers, connectivity is fast becoming a critical enabler. Ericsson estimates that a
typical smart factory will need to connect 1 device per two square meters, as it seeks to
harness the potential of the following technologies:

Ô Robotics that self-configure By testing the technologies in its own factories, Ericsson
Ô Intelligence in a private cloud has found that Mobile IoT and other cellular networks
Ô Augmented reality for quicker, accurate testing can support a wide range of different manufacturing
Ô Digital twins for design, simulation and planning use cases, making it possible to securely and efficiently
Ô Autonomous guided vehicles for faster material optimize manufacturing variables with a single
handling communication system. Cellular networks allow for
Ô Real-time tracking of workers and moving assets for massive data collection and analytics, increasing
safety and optimisation. intelligent automation on the factory floor and enabling
adaptive production. Cellular connectivity also enables
Therefore, a manufacturer needs to be able to support fast and cost-efficient production line changes, as well as
multiple systems, such as collaborative robots and digital integration and optimization of contributing workflows.
twins, simultaneously. Ideally, these assets are managed
by a single communication platform serving a private Ericsson forecasts that the vast majority of cellular
cloud-based management system, which can provide a connections in a smart factory will use Mobile IoT
complete plant overview and can aggregate intelligence technologies, such as NB-IoT and LTE-M as shown
from all areas of the factory. in Figure 3.

Figure 3: Mobile IoT will account for most cellular connections

in smart factories

ESTIMATED SHARE OF DIFFERENT TYPES OF

CONNECTED DEVICES REQUIRED TO SUPPORT USE
10% 15% 15% 60% CASES AT A TYPICAL SMART MANUFACTURING SITE

LOW LEVEL OF AUTOMATION High bandwidth, low/predictive latency 5G

Low to high bandwidth 4G
Limited data size, high update rate NB-IoT/Cat-M1

19% 8% 21% 52% Limited data size, low update rate NB-IoT/Cat-M1

HIGH LEVEL OF AUTOMATION

Source: Ericsson

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Industrial IoT Case Study: Ericsson Smart Factory
 Industrial IoT Case Study: Ericsson Smart Factory

LTE-M and NB-IoT Mobile IoT technologies are “Connectivity requirements in a factory are very
available now and will be included in the future 5G dependent on the use case and application, and so the
cellular specification. Low power connections for smart network also needs to support service differentiation,”
factories and the benefits as described in this report can says Sebastian Elmgren, Portfolio Manager Smart
already be achieved. Manufacturing, Advanced Industries, Ericsson. “Some
use cases are possible to address with evolved 4G
Ericsson believes the wide bandwidth, consistently low technology, while others such as production and robot
latency and ultra-reliability offered by 5G connectivity control may require latency between 1 and 10
will help factories achieve high-levels of automation. milliseconds, which can only be achieved with 5G
For example, 5G technologies could be used to support technology,” as shown in Figure 4.
the transmission of large data volumes and real-time
critical data, between robots on the production line
and the cloud (see Figure 4).

Figure 4: Different levels of latency requirements in industrial automation

STATION PLC WITH LTE

STATION PLC TASK CONTROL Latency < 30 ms

ROBOT CONTROLLER

TASK PLANNER
WITH 5G
TRAJECTORY PLANNER Latency < 5 ms

INVERSE KINEMATICS

CONTROL LOOP Latency < 1 ms

ROBOT ROBOT
DRIVER

OBJECT ROBOT

SENSORS/ACTUATORS

Robot controller Robot controller Local at the work cell

Source: Ericsson

“ Connectivity requirements in a factory

are very dependent on the use case and
application, and so the network also
needs to support service differentiation
“ Sebastian Elmgren, Portfolio Manager Smart
Manufacturing, Advanced Industries, Ericsson

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Industrial IoT Case Study: Ericsson Smart Factory
Industrial IoT Case Study: Ericsson Smart Factory

Regardless of whether 4G or 5G connectivity is of manufactured products in the market depends on

used, Ericsson says the quality of service (QoS) continuous customer feedback and co-creation.
mechanisms in cellular networks will become more and Where we collaborate with our own factories and
more valuable. “The importance of this will increase as industry partners to set the foundation for smart wireless
manufacturers are digitalized and demand more manufacturing with 4G and soon 5G” Erik Josefsson,
networked capabilities beyond their sites to include Head of Advanced Industries, Ericsson.
logistics, suppliers and other factories. The success

“ The success of manufactured products

in the market depends on continuous
customer feedback and co-creation.
Where we collaborate with our own
factories and industry partners to
set the foundation for smart wireless
manufacturing with 4G and “
soon 5G Erik Josefsson, Head of Advanced Industries,
Ericsson

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Industrial IoT Case Study: Ericsson Smart Factory
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