The advent of IoT has led to a scenario involving the collaboration or integration of two worlds – A world in which those in the physical asset (machinery) world and those in the virtual (IoT) world must collaborate to create products that combine physical products with internet-based application services.

This implies a significant shift in manufacturing services. In this new ecosystem, manufacturing companies will have to build up capabilities in IoT service development and operation; in other words, the achievement of ‘integrated production for integrated products.’ In other words, IoT will lead to an IoT-enabled Value chain where every aspect, from design to after-sales service, will leverage IoT technology.

Exploring an IoT-enabled value chain: A Manufacturing context

To understand the impact in detail, we will review a high-level overview of the manufacturing value chain of tomorrow – one that is enabled and integrated by IoT technology.

Sales and Marketing: Servitization

The concept of servitization essentially means that manufacturers move from a model based on selling assets towards a model in which they offer a service that utilizes those assets. An example of this is Rolls Royce. The company earns approximately 50% of its revenue from services – leasing jet engines to airlines on a “power by hour” basis.

Sales teams will have to adjust their entire sales strategy. It will require changes in sales incentive models. Models based on upfront revenues will have to be restructured towards models that support recurring payments, allowing revenue forecasting to stabilize.

Marketing teams must leverage detailed product usage data to drive marketing campaigns and define precise customer segments. This direct link to the customer via the product can be of massive value for sales and marketing teams, making it easier for them to run targeted cross-selling and up-selling campaigns.

Customized Product Offering:  More and more markets are demanding fully customized products, ranging from soda and sneakers to cars built per customer specifications.

Engineering: End-to-End Digital Engineering

Digital Engineering is already a reality in most prominent manufacturing organizations today. Tools like Computer-Aided Design (CAD), Computer-Aided Production Engineering (CAPE), and Manufacturing Execution Systems (MES) have been around for a while. Still, new advances are also getting incorporated into Manufacturing Design and engineering.

One important and beneficial aspect of IoT is its ability to link the physical and virtual worlds. Digital Twins are built upon this important aspect. You can think of Digital Twins as 3D Models of physical assets made using the physical-virtual link enabled by sensors, lasers, and localization technologies.

These 3D models will radically transform product designs, allowing engineers to experiment virtually, leveraging technologies like 3D models and Augmented Reality.

Manufacturing

It is no news to anyone that IoT tech will profoundly impact Manufacturing processes and systems. Here we will touch upon some key ones.

Customization and Flexibility: As the customers become more demanding, manufacturing concepts like ‘batch size one’ and ‘one piece flow’ is coming to the forefront.

A fundamental expectation from Industry 4.0 is that it will enable the decoupling of production modules to support more flexible production. The concept of Product memory can be leveraged to attain such flexibility. As per this concept, semi-finished products can be equipped with an RFID chip or similar technology that performs a product memory function. This memory can store product configuration data, work instructions, and work history. These intelligent semi-finished products communicate with production modules to deliver education on what needs to be done.

This flexibility, in turn, allows the extreme customization mentioned before.

Integration: Industry 4.0 has led to concepts like Manufacturing Operations Management (MOM) to help integrate and analyze data from different levels across the organization, like machines, production lines, plants, and enterprises.

Visibility and Efficiency: Sensors, lasers, and localization technologies can monitor the Manufacturing assets and machines in real-time, leveraging the Digital Twin. Tracking data can be processed through analytical models to gain manufacturing efficiencies in terms of process efficiency and areas like maintenance, etc.

The emergence of Key Technologies: IoT technology and Industry 4.0 have led to the emergence of many technologies that will become relevant for the factory of the future:

• 3D Printing
• Next-Generation robots
• Intelligent power tools
• High-precision indoor localization

Aftersales Services

As explained above, servitization also means that aftermarket services will become very critical. One key aftermarket offering that will leverage IoT will be Remote Conditional Monitoring (RCM).

Remote Conditional Monitoring (RCM): RCM can fundamentally change customer service and support offerings. IoT will enable remote and real-time access to data generated by the physical asset.  As you can imagine, this ability is invaluable for support services as it will allow more efficient root cause analysis and solution development.

Predictive Maintenance:  Manufacturers can offer predictive maintenance as a service, leveraging the accurate data that assets generate. For buyers, predictive maintenance can significantly improve operational equipment efficiency (OEE). For end-consumer products, predictive maintenance is an excellent way of improving customer service.