XS
SM
MD
LG

Login

Keep me signed in Forgot Your Login Information
Create New Account
Or Sign up using Facebook
Sign up using Google Continue with Google
Join the Exchange
site logo
  • About
    • Interviews
    • CSIA Exchange
    • Industries Served
    • Member List
    • Media Inquiries
    • Upgrade Your Profile
    • Hire CSIA Certified!
    • Contact
  • Blog
  • Podcast
  • FAQs
  • Upgrade Your Profile
  • Advertise With Us
Join the Exchange
  • Homepage
  • Find an
    Integrator
    Find an
    Integrator
    Find an
    Integrator
    Overview
    • Find an Integrator Overview
  • Find a
    Supplier
    Find a
    Supplier
    Find a
    Supplier
    Overview
    • Find a Supplier Overview
  • Community and
    Answers
    Community and
    Answers
    Community and
    Answers
    Overview
    • Community and Answers
  • Automation
    Library
    Automation
    Library
    Automation
    Library
    Overview
    • Automation Library Overview
CSIA Members Only

CSIA Members: Log in using your login credentials with CSIA or the CSIA’s Connected Community. If you've never logged in, your password will be CSIA plus your first and last initials, all capitalized.

If you experience an issue accessing your account, please email info@staff.controlsys.org or call 1-847-686-2245 for prompt assistance.

Login
Forgot Your Login Information
Staff Login
Keep me signed in
Login Forgot Your Login Information
Not registered? Join!
Or Sign up using Facebook
Sign up using Google Continue with Google
  • Homepage
  • Find an
    Integrator
    Find an
    Integrator
    Find an
    Integrator
    Overview
    • Find an Integrator Overview
  • Find a
    Supplier
    Find a
    Supplier
    Find a
    Supplier
    Overview
    • Find a Supplier Overview
  • Community and
    Answers
    Community and
    Answers
    Community and
    Answers
    Overview
    • Community and Answers
  • Automation
    Library
    Automation
    Library
    Automation
    Library
    Overview
    • Automation Library Overview
  • About
  • Blog
  • Podcast
  • Contact
  • FAQs
  • Feature Packages
  • CSIA Resources
  • Suppliers
  • OPTO 22
  • Contacts
  • Arun Sinha
  • Resources
  • The internet of things: new business models for manufacturers?
Leave Edit Mode
The internet of things: new business models for manufacturers?
http://blog.opto22.com/optoblog/the-internet-of-things-new-business-models-for-manufacturers

PostedWednesday, June 27, 2018 at 2:47 PM

Updated06/27/2018

The convergence of Operational Technology (OT) and Information Technology (IT) systems may help manufacturers embrace new service offerings using web-based business models.

 

Taking inventoryMany years ago one of my distributor partners took me to do an automation demo for a very large industrial OEM. Afterward we went into a stockroom, where she noted on a clipboard all the components she supplied to them that needed to be re-ordered.

The form was dropped into the inbox of a Purchasing Agent on our way out.

Increased business intelligence

This memory came back into my mind as I was thinking about new business models for manufacturers that may result from the Industrial Internet of Things (IIoT). Besides a purchase order being issued, I’m sure the information on that sheet made its way, probably manually, into an ERP (Enterprise Resource Planning) system.

Supplier-managed inventory is not a new concept. Imagine, though, if a data source for an ERP system was one level “lower” than supplier EDI (Electronic Data Interchange) and accessed directly from a machine?

Advances in automation technology today are helping make this data exchange with IT software and cloud platforms simpler. Opto 22’s new groov EPIC (Edge Programmable Industrial Controller), for example, contains IIoT-enabling tools that eliminate the PCs, OPC servers, gateways, and integration that were often required by traditional PLCs.

groov EPIC flattens system architecture

With the OT data more easily available to IT systems, business leaders may ask themselves, “What opportunities does the connected enterprise present for my organization?” The answer is likely to be new services that use internet-based business models.

IoT-Based Services

A lot has been written and talked about how the convergence of OT and IT can help industrial companies operate more efficiently, reduce downtime, increase profitability, and do things like move from preventative maintenance to predictive.

Most of these outcomes...

The convergence of Operational Technology (OT) and Information Technology (IT) systems may help manufacturers embrace new service offerings using web-based business models.

 

Taking inventoryMany years ago one of my distributor partners took me to do an automation demo for a very large industrial OEM. Afterward we went into a stockroom, where she noted on a clipboard all the components she supplied to them that needed to be re-ordered.

The form was dropped into the inbox of a Purchasing Agent on our way out.

Increased business intelligence

This memory came back into my mind as I was thinking about new business models for manufacturers that may result from the Industrial Internet of Things (IIoT). Besides a purchase order being issued, I’m sure the information on that sheet made its way, probably manually, into an ERP (Enterprise Resource Planning) system.

Supplier-managed inventory is not a new concept. Imagine, though, if a data source for an ERP system was one level “lower” than supplier EDI (Electronic Data Interchange) and accessed directly from a machine?

Advances in automation technology today are helping make this data exchange with IT software and cloud platforms simpler. Opto 22’s new groov EPIC (Edge Programmable Industrial Controller), for example, contains IIoT-enabling tools that eliminate the PCs, OPC servers, gateways, and integration that were often required by traditional PLCs.

groov EPIC flattens system architecture

With the OT data more easily available to IT systems, business leaders may ask themselves, “What opportunities does the connected enterprise present for my organization?” The answer is likely to be new services that use internet-based business models.

IoT-Based Services

A lot has been written and talked about how the convergence of OT and IT can help industrial companies operate more efficiently, reduce downtime, increase profitability, and do things like move from preventative maintenance to predictive.

Most of these outcomes are facilitated by making plant floor data available to software platforms that can combine it with other data to perform advanced analytics. What about manufacturers using this new business intelligence to serve or add value to their customers? Many forward-thinking companies are leveraging IIoT technologies to develop new business models based on delivering service rather than just a product.

I’ve been using supply-chain integration as an example, and it is one area that previously product-oriented manufacturers are exploring to be more service focused. In today’s competitive environment where differentiation on product alone is increasingly difficult, drivers include things like developing closer relationships with customers and improving business intelligence through customer feedback.

Some companies are even looking at integrating CRM (Customer Relationship Management) & Marketing Automation platforms with operational and enterprise data. With this approach, new services that could add value for their customers include PLM (Product Lifecycle Management), faster product development, data warehousing, and product customization.

Product-as-a-service

A compelling case for the use of internet technology to provide service to customers is with OEMs and machine builders. The idea of delivering a machine to a customer and providing remote support (commissioning, troubleshooting, maintenance) as a service is also not new. The difference today is that IIoT-enabling technologies in automation have removed some of the IT barriers and made it more feasible. My colleague Dan White covers this well in his post, Outbound! Monitor OEM Machinery with little to no IT involvement.

KAESER_Custom Air System PackageSome innovative OEMs are taking this idea to the next level and offering what is being called “product-as-a-service.”

A great example is Kaeser Compressors, who offer their compressors-as-a-service through the Sigma Air Utility.

Charging for CFM (cubic feet per minute) usage rather than for the equipment itself offers value to their customers by replacing an often difficult to obtain capital expenditure with an operational one.

In this short video they make a great point by saying, “You probably don’t generate your own electricity, water, or gas, so why generate your compressed air?” This “servitization” through IIoT technology is likely to grow with the ever-increasing interactive web mentality in today’s world.

What do you think?

What other service-based business models are you seeing emerge from the IIoT? How is your company embracing the IIoT to better serve your customers? I’d love to hear from you.

Read More
Posted by
  • Arun Sinha
    Director of Business Development
    OPTO 22
  • Privacy
  • Copyright & Terms of Use
  • Terms and Conditions
  • Find an
    Integrator
    • Find an Integrator Overview
  • Find a
    Supplier
    • Find a Supplier Overview
  • Community and
    Answers
    • Community and Answers
  • Automation
    Library
    • Automation Library Overview
111 West Jackson Blvd., Suite 1412, Chicago IL 60604 USA
Phone: 847-686-2245
info@staff.controlsys.org
Copyright © 2023 Control System Integrators Association, (CSIA). All Rights Reserved.
Powered By Milieu