This article first appeared in the Autumn 2015 issue of OnWindows magazine.
There is much talk about the internet of things. However, ‘things’ are just part of the plumbing. We connect devices, giving them, no more than, nominal intelligence. The real innovation is the internet of services. Manufacturers need to think through
their business model: how can a product become a service with the long term related revenue stream?
Industry 4.0 is only partially about smart manufacturing. It is one part of the dual strategy, the other being the internet of services. Examples already exist and many manufacturers are recognising and exploiting the opportunity. Tesla is delivering vehicles with hardware and software which can be upgraded, their cars are effectively sensor ready and software upgrades will provide extra intelligence, delivered via the internet. The customer could pay for the upgrades generating extra revenue of Tesla. Otis is supplying elevators/lifts with sensors which send data into their cloud. The data is analysed and Otis sells a predictive maintenance services, again adding a long term revenue stream. Or how about a new catering company in The Netherlands supplying meals to hospitals? Each meal is prepared for the patient based upon data received from the hospital about the patient’s needs. The meals are prepared in an automated plant.
The individualisation of mass production and the internet of services add additional revenue. The smart manufacturing plant needs to be flexible and deliver intelligent products. A major misunderstanding is that this is not a cost saving exercise; it’s a new business model to increase revenue and profitability.
During my workshops we explore the opportunities and match them against the realities of today’s technology. In one of our recent workshops we heard from a manufacturer who was heavily investing in a factory of the future. Enthusiastic engineers ordered additive manufacturing machines (3D printing) only to find out they could not connect them to their network using international standards. They paid a heavy price for this error and damaged the initiative’s reputation. It’s worth taking independent advice before completing your new manufacturing strategy. By working in an environment with other manufacturers best practices and lesson learnt can be shared, making sure that faster progress will be made to industry 4.0 solutions.
To learn more I hope you will be able to join one of my workshops, for more information please go to www.mom-institute.org
Mike James is the chairman and CTO at ATS International
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