Mar 22, 2020In 2020, there is no doubt that the Internet of Things (IoT) has been a game-changer. In fact, one would be hard-pressed to find any major industry or realm of life that has been unaffected by the seismic changes brought about by the IoT. Although the initial impact of the IoT was felt in the consumer space, it has rapidly percolated to the industrial world, resulting in Industry 4.0 or the Industrial Internet of Things (IIoT).
As the IIoT continues to gather momentum, there has been a perception that the business impact it creates could have been significantly higher. However, things are headed in the right direction, as the digital thread concept is the next evolution enabled by IIoT infrastructure. Digital thread refers to the communication framework that allows connected data flow and an integrated view of an asset's data throughout its lifecycle across a traditionally siloed functional perspective. Let's delve deeper into the specific business impact of an IIoT-led digital thread that cuts across the entire product development and manufacturing lifecycle.
Business Impact of the IIoT
The Industrial IoT is causing several disruptions across the value chain. However, its impact can be most significantly felt across two major scenarios: plant, factory or manufacturing operations, as well as engagement between industrial OEMs and their customers. The former is more about achieving optimization and enhancing operational efficiencies, while the latter is focused on the creation of new business and service models.
Though one might tend to look at these as two different scenarios, the impact of a well-thought-out and carefully executed IIoT strategy can be multifold. They key is to build the right synergies between these complementary worlds. Let's explore, in a little more detail, the different approaches that can be used for creating these synergies to maximize business impact and extract higher returns from investments made.
The manufacturing lifecycle typically consists of eight different stages: design, test, make, QA, deliver, operate, service and return. Each of these stages has different systems and tools which are deployed at individual stages to optimize operational efficiencies. Some of these tools include PLM software, HMI SCADA, Industrial automation systems, ERP systems and others.
Upon close observation, one would realize that the IIoT elements usually impact the make, operate and service parts of the lifecycle. But there are systems deployed across other stages as well, and for the IIoT to truly live up to its promise, some of these systems must be combined to create business impacting solutions.
Four High-Impact Digital Thread Use Cases Enabled By the IIoT
Although it might have taken a little time to catch on, the IIoT has made significant strides during the last couple of years, and we are now seeing an increase in adoption across varied industries. However, the introduction of digital thread carries with it the potential to significantly accelerate value creation and enhance the impact of IIoT implementations.
In my opinion, the best use cases for digital thread are as follows: enhancing product design and quality; improving parts, accessories and consumables supply chains; improving field service operations and predictive services; and enabling new business models, including product-as-a-service.
Enhancing Product Design and Quality
All the changes driven by technology have only resulted in a significant increase in customer expectations. The key to meeting these expectations is to optimize design-enhancement cycles and compare product quality in testing, versus when they are actually deployed in field conditions. The design and quality of products being shipped out of a plant can be drastically improved by corelating the data from the original design considerations with the data generated from end-of-line manufacturing, along with the health-check data gathered from the field.
The business impact of this could be the following: design optimized for product features for customer segments, continuous design improvement to improve device quality, lesser breakdowns in field devices, and reduced costs and improved efficiency of service operations.
Improving Parts, Accessories and Consumables Supply Chains
Having the best quality and design is still only half the battle. The focus then shifts toward the intricately complex world of supply chain and efficiently managing downstream revenue by effectively managing inventory, accessories and consumables across the value chain. The efficiency with which these requirements are fulfilled can be improved by correlating data about the inventory available at the warehouse with the current condition of products in the field.
The business impact of this could be the following: improved fulfilment process efficiency, reduced inventory management costs of parts and accessories, reduced cost of operations due to parts planning being conducted based on failure analysis, and reduced revenue leakage to grey market due to distribution partners' shipment of devices to other countries.
Improving Field Service Operations and Predictive Services
As efficient as your supply chain operations might be, end customers care predominantly about their own experience and the ease with which they can maintain a product. The IIoT provides the ability to redefine the experience of a customer in servicing the product by corelating the data across the stages of make, operate and service. This is made possible with real-time tracking and predicting product performance, as well as breakdown-preventive servicing and repair.
The business impact of this could be the following: improved SLA compliance based on maintenance contracts, including traceability to component level SLAs with vendors; proactive service enablement of installed products; less unscheduled downtime; improved product reliability and uptime; just-in-time maintenance and breakdown service; improved firsttime fix rates (FTFR); and a reduction in field visits leveraging remote diagnostics and improving the utilization of service engineers.
Enabling New Business Models, Including Product-as-a-Service
The IIoT is helping in the creation of new revenue-generating business models, workflows and applications that support transaction-, subscription- and commission-based revenue streams. There is also the possibility of selling data generated by these models; for instance, aircraft manufacturer GE Aviation offers efficiency and analytics services to help optimize flight procedures. To benefit from such possibilities, businesses need to effectively manage the data of all these products and customers.
For a typical industrial entity, optimized decision making and correlation of the data across the operate, service and return stages can help explore new business models with customers. This could improve fleet management and managed service metrics, as well as optimize device usage. It could also mean improving contract-management metrics using IoT data from devices and integration with contract-management applications.
The business impact of this could be the following: optimized device and service offerings enabling customer satisfaction and brand loyalty; transparency to customers on actual usage and billing; effective compliance against SLAs agreed upon in maintenance contracts; and scope for additional revenue streams with new business models like product-as-a-service, the enablement of cross-selling, up-selling and down-selling, and customization of maintenance contract renewal quotations based on usage.
Conclusion
When looking at a large industrial organization, it isn't uncommon to come across a lack of uniformity across different product lines and business units within the same company. Such complexity is typical of any industrial setting, and it is imperative to connect these dots and ensure integration with enterprise systems to ensure the success of the Industrial IoT. Digital thread is the key to achieving this integration and ensuring transformational business results.
It is here that a technology services provider with a deep understanding of the IoT and a strong industry background can add significant value. These are exciting times, and the industrial world is all set to reap the benefits brought about by the Internet of Things, while consistently widening the use cases and raising the bar for innovation.
Manu Tayal is the VP and Head of the Industrial and IIoT business at Happiest Minds. He brings with him over two decades of rich industry experience and is currently focused on helping our clients make their industrial products and platforms digital ready. He is deeply passionate about creating business impacting IoT solutions for customers while also leveraging other disruptive technologies such as AI and ML.
