How manufacturers can obtain value from connected products
The more key technology enablers such as IoT and advanced analytics will mature, the more this will drive investments of manufacturers related to making their products smart and to connecting their products in order to gain value from it.
Connected products can be for example production machines, tools, vehicles, containers, or all sorts of consumer packaged goods that are equipped with sensors and connected with the original equipment manufacturer (OEM) of these products.
Typically, cloud-based IoT platforms are utilized to capture, store, manage and analyze this sensor data in a way that the OEMs can monitor the quality, the performance and the usage of their products.
The goal is to gain value from this data, which can be obtained in various value chains:
· Data from connected products can help engineers and developers to better understand product performance and use operational data from connected products to optimize design and engineering of existing products faster, thereby speeding up product development cycles.
· Data from connected products such as from production machines can help to increase the overall efficiency of production equipment (OEE) and to increase the utilization of production assets, enabling machine operators or machine OEMs to respond more quickly to performance issues, avoiding machine and system failures and consequently costly unplanned downtimes.
· Data from connected products can help to reduce costly on-site service calls by enabling remote diagnostics and predictive maintenance concepts.
Besides gaining value in the various value chains, data from connected products can also be obtained by offering customers data-driven value-added services such as condition monitoring services. The challenges related to this are that customers need to be willing to share relevant data with the OEM of their products and to be willing to pay for such services. On top of that, what increasingly becomes an interesting option are so called products or equipment-as-a-service concepts. What delivers an interesting benefit to machine operators are concepts where machine OEMs not only provide production equipment “as-a-service”, but where the OEM also takes over guarantees for certain business outcomes.
The actual value of data from connected products depends on the impact that data from connected products can have on improving the companies KPIs. And, various initiatives can bring different levels of value to each company, depending on the individual situation a company is in, and the individual short-term and long-term operational and strategic goals.
Despite the value that can be obtained from data from connected products, there are clearly also challenges related to this. And, these challenges most often relate to
· the customer’s lack of motivation to share performance or usage data with the manufacturer of their products, for various reasons
· the lack of know-how and capabilities on how to apply intelligence to the masses of data increasingly becoming available from connected products. For example, utilizing big data or advanced analytics in order to transform data into insights.
· The current lack of a significant and sufficient data pool which often does not yet allow to draw correct conclusions from the available data.
Despite addressing these challenges, in order to obtain value from connected products, there also need to be the right technological foundation as well as appropriate security measures to support and enable according initiatives and cloud-based innovation platforms which enhance for example existing PLM solutions are one way to address this.
And, as sharing data generally is a very sensitive topic - whether it’s sharing data with suppliers, among colleagues, or among departments, whether it’s with business partners or competitors. Therefore, there needs to be established a new mindset, which has room for thoughts about sharing data for a bigger common and mutual goal. And, this concerns all employees, management team members and company leaders who will all have to embark on a journey that has sharing data in order to gain business value as a core. A comprehensive change management will therefore be key!
The full report “How manufacturers can obtain value from connected products” is available for our subscription customers here.