In a highly competitive global marketplace, businesses are searching for and adopting revolutionary technology and processes to stay relevant. Today, 35 per cent of Australian enterprises believe that The Internet of Things (IOT) is the key driver of digital initiatives, placing it third after cloud and mobile.
With the advent of automation and analytics, manufacturing is moving from mass production to mass customisation. The immense growth of IoT in the industry has resulted in factories being able to extract critical data on operations. By using big data and machine learning they are achieving more efficiency in their workplace as well as enhancing customer experience.
Without a doubt, IoT is a clear investment area for the manufacturing industry particularly in the Asia Pacific Region which is among the world’s top regions for IoT adoption and usage.
To effectively work with new technologies, businesses must be prepared to think differently, adapt and invest to remain competitive. Currently, only 4 per cent of Australian companies are engaging with universities in R&D to help with digital development and implementation. This means there is untapped potential for Australian businesses to stand out from their competitors in the race to transform their businesses.
The bottom-line when adopting new technology is that it’ll increase overall productivity of the workplace. The integration of IoT into smart devices enables industrialists to autonomously manage manufacturing and distribution operations. IoT also allows manufacturers, and their customers, to access critical, real-time data, which that can be used to improve productivity and system performance, and give customers data on the status of their product delivery.
The consistent information derived from processes of IoT can be used for preventative or predictive maintenance, resulting in reduced downtime by making more informed and targeted upkeep of equipment. Increased connectivity between pieces of equipment and machinery means improved collaboration and integration amongst stakeholders throughout the manufacturing value chain that is crucial for the success of implementation.
Furthermore, IoT will continue to drive the future of factories. In the automotive industry, smart manufacturing will interconnect and better harmonise the individual stages of manufacturing production in order to advance plant-wide efficiency. From an engineering cycle standpoint, this means that manufacturers will be able to get new products to the market sooner and meet consumer demands more responsively. For example, medical device manufacturers can also leverage IoT to improve customer experiences and monitor patients more closely by managing everything from dosage through to the use and efficacy of devices. Regardless of industry, IoT will be beneficial to all businesses looking to improve their products and services amongst their competitors.
Renewed business models: Servitisation
Greater investment in IoT gives manufacturers an opportunity to diversify their services sector. The new buzzword in the manufacturing industry is ‘servitisation’ that refers to the aftermarket service work and is a huge growth area for the industry players. This is driven by the data retrieved from IoT. The key advantage of adopting a full servitised model is in the continual relationship with the customer. A manufacturer delivers a piece of equipment as a service and is billed on basis of usage or through a revenue sharing model. By focusing on customer retention and loyalty through servitisation, manufacturers can stand out in the crowd with an enhanced customer experience.
According to IMCRC, less than 30 per cent of manufacturers are in the business of selling services, which implies there is a huge scope to use IoT to its advantage. By introducing service offerings in addition to the sale of goods, IoT can give organisations competitive advantage in the saturated one-off market by increasing value differentiation. To remain competitive and increase the market share in the highly competitive manufacturing industry, IoT adoption is key.
As we head towards a hyper-personalised world, customer experience will be paramount to the success of a business. Staying relevant will come from rethinking revenue and business models. Servitisation reflects changing customer expectations, with consumers no longer satisfied with one-off purchases.
Ultimately, the right investments in IoT will enable businesses to tap into the potential of digital transformation that awaits. Whether it is through automatic retrieval of performance data, delivery tracking or equipment performance monitoring, an enhanced customer experience is supported by IoT and, in turn, increased competitiveness is delivered.
Mike Russell, Chief Operating Officer, Central Innovation Pty Ltd.