Industrials

Machine-to-machine connectivity

Factories, warehouses and workshops are undergoing a major technology upgrade; as firms fit out industrial equipment with data-collecting sensors, manufacturers’ machines communicate with each other online. This is the Industrial Internet of Things, or IIoT, and it is transforming the work of the enterprise.

The IIoT industry could add as much as $14 trillion to the world economy by 2030, according to Accenture. The number of IIoT-enabled machines, meanwhile, is set to reach into the hundreds of billions. That is ten times more devices than IIoT’s consumer-focused counterpart, the Internet of Things, or IoT, which builds web connectivity into everyday items like speakers and refrigerators.

IIoT makes it possible for manufacturers to extract and analyze data from machines in real-time. Examples of where the technology is used today include:

Wireless sensors issued to refinery workers by Marathon Oil which monitor the workers’ exposure to harmful gases as they carry out daily tasks.

Sensors developed by Michelin for HGVs which monitor tyre pressure and overall vehicle performance. Live engine data encourages maintenance well before problems appear.

Tracking of tools and materials on factory floors or construction sites. The IIoT has been put to this use by a range of companies including Airbus and GE.

Physical goods become services

The expansion of the IIoT is often referred to as the fourth industrial revolution. But where previous leaps forward in manufacturing were down to breakthroughs in hardware, today’s industrial revolution takes existing hardware and extracts new data from it. These data are then used to better understand production processes or consumer behavior.

Manufacturers, for example, can embed sensors in their products in order to learn how those products are used by customers. They can then offer additional services which respond to each individual customer’s needs.

Using sensors to monitor consumption also allows for an even more unprecedented step: physical goods companies can offer their products as services. Under this business model, consumers only pay for what they use when they use it.

To embrace this approach, firms that traditionally sell goods in one-off transactions must fundamentally shift their thinking. They need to become customer-centric organizations capable of providing access to a product at the click of a button. Some of the internet era’s most successful ventures are built on the “as a service” architecture, including Airbnb and Uber.

What does the IIoT mean for your company?

How can your organization rethink its business model to deliver physical goods as services?

To embrace this approach, firms that traditionally sell goods in one-off transactions must fundamentally shift their thinking. They need to become customer-centric organizations capable of providing access to a product at the click of a button. Some of the internet era’s most successful ventures are built on the “as a service” architecture, including Airbnb and Uber.