The Impact of the Industrial IoT: Manufacturers Are Turning into Service Providers

The Impact of the Industrial IoT: Manufacturers Are Turning into Service Providers

Industrial manufacturers put a lot into their products: innovation, years of expertise, the intelligence of their engineers and the sweat of their workers. But after they’re done with the manufacturing, they’re usually done with the product. Manufacturers traditionally haven’t been involved throughout the lifespan of their machines, save for the occasional repair. This has been the case for many decades.

But now, that’s changing.

Whereas before, the economic model was one that assumed depreciation, today manufacturers are involved throughout the lifespan of the product. The Industrial Internet of Things (IIoT) allows for machine-to-machine (M2M) communication, enabling manufacturers to transmit data, monitor status, and perform predictive maintenance and troubleshooting. Machines in the field can also collect and transmit data for analytics, business planning, and more.

In providing these offerings, manufacturers are making more than just parts or machines; they are providing a service. In essence, they are becoming long-term service providers. It is an enormous shift in expectations, and to prepare for the huge changes arising from the Internet of Things and 5G connectivity, manufacturers must know what is coming.

The Cultural Expectations of the IIoT

This is an entirely new world of revenue for manufacturers, who must be prepared to meet new B2B demands. The problem is that not every manufacturer is ready for this. According to a PwC report:

  • A full 34% believe it is “extremely critical” for US manufacturers to create an IoT strategy for their business;
  • Only 35% of US manufacturers are collecting and actively using the data generated by smart sensors to improve their manufacturing and operating processes;
  • Only 38% currently embed sensors in products to collect field data on a continual basis.

These numbers show a disconnect between what purchasers and users expect and what businesses are creating. That’s partly a cultural issue: many manufacturers aren’t accustomed to being service providers. That’s why there often exists a reluctance to make the widespread changes that are necessary to succeed in the modern digital age. It seems both expensive and overwhelming from a strategic standpoint, but that doesn’t have to be the case. Partnering with IIoT experts to help you create a mindful and comprehensive approach to connectivity can cut through the challenges. Getting started is the hardest part to becoming a service provider. The right approach can help you overcome that.

The Aspects of an IoT Strategy

Data storage technology is an essential element of the high-tech future. Data is the avenue through which you become a service provider. The true value of the IIoT depends on how much quality data you can collect, analyze, and use.

Data Collection and Analysis

With the IIoT, data is collected through a network of sensors on systems or component parts. This data tracks how a machine is operating in real-time, under every condition, and how it is interacting with other parts or systems.  In essence, you are creating a service that stretches through the product’s entire lifespan. You are collecting and analyzing data, which can then be leveraged to inform your decisions at a tactical and strategic level.

You’ll be able to understand how to create better products based on different conditions and to spot problems before they happen, repairing them over-the-air, or by dispatching engineers before potential malfunctions turn into reality.

Let’s take an example of a wind turbine. The most vulnerable part of a turbine is the gearbox, which can malfunction during unexpectedly heavy loads. But with the IIoT, you can monitor and give over-the-air (OTA) software upgrades during heavy wind times to adjust them when they are reaching capacity unexpectedly. As you collect data, you can predict when there will be problems.

An IIoT Ecosystem

In order to successfully become a service provider, an industrial manufacturer will need to create a cohesive ecosystem that extends throughout the life of the product. This involves adding IoT-enabled modules to finished products and creating new prototypes and market-ready machines with those modules as an integral part.

It’s here that manufacturers can quickly move ahead of its competition. They can offer their clients and buyers the benefits of a connected ecosystem, one that can be monitored and improved upon on a continuous basis. There is peace of mind for your potential client in knowing that they aren’t just buying a product, they’re buying a service that will mean fewer breakdowns, less stoppage time, fewer headaches, and lower costs.

That’s rapidly becoming the expectation. Are you ready for it?

The Need for an IIoT Partner

As a manufacturer, you’re good at what you do. You have a dedicated core competency, and it is what your clients rely on. But the transition to a service provider business model and a successful integration of connected technology might not be in your core competencies. A partner with IoT expertise can help you with the challenges that come from this transformation.

Working with a partner with core competencies that include helping manufacturers integrate into the IIoT means you can continue to focus on what you do best. You’ve been creating a better, more high-tech future throughout your career. It’s a fast-evolving world, but those those machines and systems are still essential. They just need to be IIoT-enabled and adapted to accommodate M2M-based services. Primitive Logic can help you create and implement a mindful approach that cuts through the noise, helping you get started down the IIoT path, quickly and efficiently. Connect with us today to learn more about how we can connect your business.

Kevin Moos, May 2017