Internet of Things: What it means for the Procurement of Industrial Pumps


By: Socrates C.T -- Principal Analyst - Capex and MRO and Facilities Management

01 July, 2018

Internet of Things: What it means for the Procurement of Industrial Pumps

Procurement of Industrial Pumps - Internet of Things

Abstract/Business Case

Capital equipment as a category has always strived to become efficient predominantly through reduction of the total cost of ownership. This trend was increasingly adopted in the past two decades, where procurement managers’ purview went beyond acquisition prices. Procurement of industrial pumps followed the same steps and saved costs both in operations and maintenance fronts through various ways of reducing the total cost of ownership (TCO). This whitepaper discusses the impact of the innovation of the Industrial Internet of Things (IIoT) on the pumps' procurement category and how it influences the TCO of pumps to reduce costs.


The automotive industry grew leaps and bounds since the introduction of electronics in the late 20th century. Customers experienced a major change in uptime and realized substantial cost savings in the machines’ lifecycle. Similarly, Industry 4.0 is transforming the process equipment category, and it can potentially enhance system performance and deliver significant operational cost savings.


Source: Altizon

Industrial pumps category has continued to innovate around operational efficiency predominantly through pumps' and components' designs, material selections, and additive manufacturing. However, the scope for savings in maintenance was achieved mostly through contract management, reduced downtime through scheduled maintenance, and optimizing spare parts inventory. The process uptime optimization was traditionally dealt through scheduled maintenance. Predictive maintenance and proactive maintenance are still a rarity in many plants. It is always prudent to ensure that the critical equipment such as pumps, motors, and drives adhere to stringent performance guidelines to avoid unplanned downtimes and to improve life span. IIoT has opened a new era in pump performance management and provided remote access for the user to get a highly improved maintenance experience.

Motor Connection to Save Energy


Source: DoE office of Industrial Technology, Schneider Electric

Pumps are the most energy consuming equipment, in addition to motors. Nearly a quarter of the energy consumption of motors is through pumps alone. Adding to this, most pumps are oversized with respect to their requirement. IIoT helps to counter this issue by delivering energy savings, increasing equipment uptime, and maintaining cost reductions through data analysis collected during the pump operations. Energy efficiency is attained through energy usage monitoring, algorithms, and historical analysis of anomalies. Pump users also use variable speed drives along with tracking measures to save energy.

Pump Performance Management using IIoT

Overall performance management of a pump system starts with the installation of a diverse set of sensors. They are predominantly used to measure vibration, voltage, current, temperature, pressure, and flow rate. Further, the IIoT gateways bridge operational data and information technology.  The data conversion should be specific to brownfield applications; additionally, they should be compatible to support a range of sensors, including new sensor technologies. Such connectivity decreases manual judgements for routine maintenance and embraces monitoring of critical and near-critical assets. This allows businesses to keep control of more machines and supports their workforces in diagnosing and managing assets efficiently. The real-time data analysis of assets also helps to identify momentary factors that disrupt operations (e.g., vibration analysis). Such dynamic measurements help save network bandwidth and inefficient data loading to the servers.


Source: Flowserve, Alitzon

The intelligent system provides tools for both diagnostic and prognostic calculations on the pump, thereby indicating potential parts of failure and the downtime to fix them. The cloud software platforms help manage vast sets of data and provide dashboard of information to the process engineers. Remote monitoring is another advantage of IIoT implementation, where a pump’s condition can be managed with a limited local technical crew and remote plant managers or consulting experts.

IIoT can enhance the way service is done using augmented reality. The field service technician can imbibe information from sensors, diagnostics, and service manual procedures through wearables. There is also a possibility in the future that this technology would help in automatic ordering of spares based on the information obtained from the machine’s diagnostics.

Impact on Total Cost of Ownership

The supplier network is optimistic about IIoT's edge in reducing the TCO of an industrial pump (Figure 4). The reduction on TCO can be as much as 40 percent as there is a potential doubling effect of increased downtime as well as the life span of the pump equipment. The acquisition price of an intelligent pump system is usually higher by upto 60 percent, and there is a lead time of atleast a month to implement the infrastructure. However, efficient usage to increase uptime will correlate to your savings but it differs from plant to plant. It is also recommended to upgrade existing pump systems to intelligent pumps, only if there is substantial life left in the equipment (>7 years). Though external consultants and remote site maintenance have the dashboard information, the plant engineer should have complete access to the vitals ((temperature, vibration, pressure, voltage, and current) of the pump system to ensure that there is a historical tracking of data and the identification of patterns in pump behavior.

Cost Component

Traditional Pump

Intelligent Pump

Cost Index of Intelligent Pump

Acquisition Cost




Energy Cost




Maintenance Cost




Downtime Cost




Operating Cost




Upgrade Cost




Total Cost




Years in Operation




Annual cost




Note: Estimates provided by expert and supplier network of intelligent pumps

Source: Beroe Analysis

Procurement Options for IIoT implementations

The smart pump infrastructure can collaborate with multiple systems across other process assets, such as heat exchangers, control systems, and compressors. This enables the buyer to focus on the core part of operations and have some leverage in maintenance. The evolution is from informed decision making to an automated decision making, which reduces considerable maintenance efforts for the connected assets.

The project implementations can be done in multiple ways (Figure 6); for example, it can be done by using a turnkey supplier (pump supplier with complete implementation of the system) or by establishing partial ownership with respect to the equipment, cloud platform, and accessories. At the end of the day, it is important to reduce the lead-time for implementation and increasing the ease of rectification in case of failures of the IoT system. There are also options where in-house field engineers develop their proprietary smart devices along with the codes for their Internet of Pumps platform or use plug and play hardware kits and pre-coded IoT software platforms to retrofit existing sensors.




Manufacturing firms who, on an average, spend million dollars on process equipment, annually, should rethink their strategy in terms of operating and maintaining these assets. When such decision influencing operational data is synced with the corporate network, it can transform the process equipment industry, especially pumps. It is critical to choose the pump system for implementing IIoT based on its volume of operations and life span of the equipment. Additionally, the procurement options for commissioning such projects should be based on competency of the in-house team, choice of OEMs, third party integrator, and software provider, rather than cost of implementation alone. Since multiple suppliers are involved in the implementation, it is suggested to work with firms with similar experience and clientele to ensure that the synergy of the workforce remains manageable.

Though the supply base for intelligent pumps is less than 5 percent, among the existing number of pump suppliers, it is anticipated that the economies of scale would encourage more OEMs to introduce the technology. The price of implementation would also get reduced in the due course once the offerings become competitive across suppliers. In any case, it would be a win-win situation for the parties involved , if the IIoT is prudently embedded and utilized in plant environments  and in industries, such as oil and gas, mining, and chemicals, where there is extensive pump usage, among other process equipment.





COVID-19: Assess impact on your suppliers and ensure business continuity with Beroe’s WIRE
(World Instant Risk Exposure)