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We occasionally do updates on new technologies of importance to industrial suppliers such as 3D Printing of Metal Parts is Now Mainstream earlier this year. In the post below we update you on the Industrial Internet of Things. Enjoy.
What is the Industrial Internet of Things?
TechTarget‘s definition: the Industrial Internet of Things (IIoT) is the use of Internet of Things (IoT) technologies in manufacturing. IIoT incorporates machine learning and big data technology harnessing sensor data, machine-to-machine communication automation that have existed in industrial settings for years.”
Why should Industrial Suppliers use the IIoT?
To grow revenue, reduce costs or both. Bottom line, to benefit from digital transformations available via IIoT and avoid risks of digital disruption from existing or new competitors.
According to this 2017 PwC and MAPI survey, nearly 90 percent of large U.S. manufacturers have started to incorporate the technology into their operations, with 38 percent already offering products and services around IIoT. “The opportunities are new revenue streams and closer/deeper customer engagement through IIoT and other digital technologies.”
As another consulting company, Accenture put it, IIoT “offers the game-changing ability to understand in real time how each of their individual products is being used by customers, together with insights into each product’s current and future status. This information opens the way to the creation of new customer services and revenues that were never previously possible.”
Are you already using the IIoT?
The philosophy behind the IIoT is that machines can accurately capture, communicate and analyze data that enables industrial suppliers and their customers to save time and money by making business processes more efficient. You may already be using IIoT or very similar digital approaches, for example:
For example, Fastenal just reported Q3 sales of $1.1 billion, up 11.8% and profits up 12.7%. The increase was driven primarily by higher unit sales due to improved market demand and notable contributions from industrial vending and onsite locations. Fastenal signed 4,771 industrial vending machines in the quarter and said the revenues generated continued to grow at double-digit pace in the quarter.
Those examples are just the start of IIoT and similar digital service applications that industrial suppliers are using but predictive maintenance and support applications may be the most impactful use of IIoT. For example:
3 Recommendations for Industrial Suppliers
We could go on with more examples but you can find many online yourself. The key question is, can you do something great with IIoT on your products, business model or both?
Here are 3 recommendations to help answer that question:
1. Understand how broad IIoT really is and how widely it could benefit or disrupt your business model or individual products. Entering the IIoT race may no longer be a choice – nearly 90% of large US industrial manufacturers offer IIoT-driven products and services or are developing them. Don’t be left behind!
2. Define your own use of IIoT and invest in it. Don’t stand by and wait for changes to happen to you. In the MAPI survey 40% of companies have allocated between 5 and 20% of their total R&D budget specifically for IIoT. Nearly 50% are already seeing returns – 41% experiencing returns of up to 5% of their total revenue in 2016. Over the next five years 42% expect between 10 and 20% of their total revenue to be driven by IIoT products and services.
3. If you add IIoT options or capabilities to your products promote them wherever you promote your products. For example, by adding them as options to your online product configurators, downloadable 3D CAD models and 2D CAD sales drawings.
Our take is that the most challenging part is creating successful new IIoT business models rather than integrating IIoT technology. IIoT tools already exist to help you get started technically. We expect the next five years to reveal major changes for industrial suppliers as more IIoT based innovations occur.
As always, please add a comment below or if you’d like our opinion on your situation please call or click either button below: