Four steps for planning for a solid manufacturing IoT strategy
Today, the fourth Industrial Revolution, otherwise known as Manufacturing 4.0, is in full swing. Manufacturing 4.0 bridges the physical environment with the digital by delivering technological innovations like special effects once home to only science-fiction movies.
With many industry reports publishing trends, analysis and predictions for Manufacturing 4.0 through industrial IoT, the numbers all point toward one commonality: hyper-growth. By 2020, the industrial manufacturing sector predicts that spending on IoT will increase to $890 billion, while IIoT will add $14.2 trillion to the global economy overall.
The move to digital drives a tectonic shift in the industrial sector, and a majority of business leaders are grappling to achieve success in this new era of manufacturing. This movement, with its rapid changes, has many manufacturers scrambling to implement strategic IIoT initiatives.
To address the common missteps on the road to digital transformation, here are four strategic actions to consider when planning for the new era of manufacturing:
1) Examine your unique business requirements. This step helps discover and understand the unique business or technology requirements for developing a successful IIoT strategy. Ask yourself: What are the fundamentals of your hardware? Does it carry the capabilities to support new software and services? Can these new services be provided by others and hence does my business need to support a third-party ecosystem? What are the business models that align to your current and evolving portfolio of digital products? Are there new digital requirements such as security and compliance you need to assess?
2) Understand your business priorities and challenges. Have your management team outline the top priorities for your digital initiatives and clearly define any roadblocks to success. Instead of focusing on revenue, hone in on the deeper, more meaningful objectives for the development of a long-lasting and profitable digital ecosystem. Questions for consideration include: What are new approaches to take with our customer touch points? Do customers find enough value in our current hardware? How can I structure a commercial model with my customers that aligns more toward a long-term partnership versus a traditional Capex model?
3) Make the build versus buy decision. Once the management team has outlined and defined priorities for the company’s digital initiatives, the next step involves exploring whether you can build a system internally, or if you need the support of an industry specialist to achieve your digital objectives.
To help make the right decision, you should ask these important questions: Can you afford launch delays? Do you have the necessary in-house resources to achieve not only launch, but ongoing maintenance as the digital business evolves? What are the strategic parts of my business that I should maintain versus partnering with others to achieve outcomes?
While some businesses take on the challenge in-house, speaking with an industry specialist provides valuable insight to understand the possibilities given your resources, and uncover what you may have overlooked or underestimated in complexity. For example, thrusting your team into billing and global taxation without proper understanding of these issues would be problematic, and even more so if discovered late in your deployment cycle.
4) Plan for an ecosystem. Digital initiatives are not one-and-done projects. Manufacturing 4.0 brings new opportunities for manufacturers looking to drive stronger competitive value and revenue. Those who plan for a one-time build will likely fail — and will miss out on one of the biggest opportunities in the history of manufacturing. Instead, companies should continually work to evolve their physical product with digital offerings combined with additional digital experiences from third-party developers.
For example, Google and Apple are ahead of the competition in the mobile market because they have learned to use their app developer ecosystem. Companies need to have a strong developer program, offer ease in development and publishing of apps, launch tools for app integration and pave a path for revenue generation.
Understanding these four steps will guide your plan of approach for digital transformation as manufacturers. IIoT activity will significantly increase with digital disruption on the horizon, and the only way to succeed is by first digging into your digital objectives. Assessment of requirements, priorities and challenges lays the foundation to build and execute your IIoT initiatives for Manufacturing 4.0.
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