The “Internet of Things” has driven a range of reactions from hype around the potential, to concerns about the limitations, to real fear about the consequences of connectivity. Most manufacturers appear to be standing on the sidelines – waiting for the air to clear before investing in projects. However, I believe that the set of technologies we refer to as the Internet of Things will significantly impact manufacturing, and in many cases create a new a basis for competitive differentiation. Here’s why:
1. Connectivity will expand the envelope of design
Most “things” now stand alone, and once they are built and sold, the manufacturer will only revisit an individual until through the warranty/return process. Bringing in connectivity and cloud technologies gives product designers a choice of whether to embed features within the physical object itself, or keep them in the cloud where they can be upgraded over time. Also, the designer needs to be concerned not just with the product the organization produces, but the external world of ‘things’ that the product is expected to communicate with.
2. Customer centricity becomes a reality
Most manufacturers do not sell directly to the end user – they typically sell through a retailer or dealer network or deliver components that are assembled by other organizations into finished products. Therefore, clear insights around the end users’ preferences and behaviors are at least partially impacted by the other players in the value stream. Retaining a literal connection to the product when it is out in the field will give manufacturers a new pipeline of data around which, if mined through the magic of analytics, should deliver insights on customer behavior and the optimal set of features.
3. New opportunities to improve safety and efficiency
The capability to pull data will be the most valuable aspect of the Internet of Things set of technologies for many manufacturers. The ability to use data analysis to reduce energy consumption and optimize processes will lead to improved profit margins for those who invest in the analytics capabilities. Data include information from the field, past failures, maintenance records and historical usage to create predictive analysis around failures.
4. IT functions will move from a support function to a strategic source of competitive advantage
Increased use of software, more sensors, more connectivity and certainly greater use of Big Data and analytics capabilities means manufacturers need to embrace IT as much more than a back office solution. This world of technology also brings in data privacy, hacking, and uptime issues – all issues that business leaders will need to be able to address. IT capabilities will be in higher demand to support product development, marketing, corporate strategy and the production floor, and the contributions can drive innovation and more efficient, lower cost operations.
5. New grounds for competition
For many industries within manufacturing, such as automotive, medical devices, heavy machinery, and a wide range of electronics, the capabilities enabled by the Internet of Things will likely change the basis of competition. Rapid evolution in product design can shake up the hierarchy of winners and losers in these industries. This adds urgency to the need for manufacturers to understand how the Internet of Things can add value within their industry – and activate a plan to respond.
Over the coming weeks, I’ll be exploring different aspects on the topic of the Internet of Things and sharing my thoughts on how manufacturers can best approach this space. Check back here – or follow me at @kirstenatdell.
‘Internet of Things’
Most manufacturers have been standing on the sidelines when it comes to the Internet of Things. Here are some reasons why they should get in the game.
- 1The ‘Internet of Things’ changes manufacturing
- 2How the ‘Internet of Things’ will change design
- 3Becoming customer-centric via ‘Internet of Things’
- 4Securing the ‘Internet of Things’
- 5How the ‘Internet of Things’ impacts the factory
- 6Future ‘Internet of Things’ — from device to sky