Asian manufacturers should see the Internet of Things (IoT) as an essential tool that will allow them to benefit from data-driven decision-making and enhanced productivity. By Wayne Harper, Senior Technical Director, Zebra Technologies Asia Pacific
Global expenditure on the deployment of solutions dedicated to the Internet of Things (IoT) is expected to reach US$737 billion in 2016, according to estimates from IDC. Industry is expected to be the largest consumer of connected devices in production systems (102.5 billion), followed by management of production assets and then ground maintenance/intervention. The bulk of this investment is concentrated in Asia, whereas Western Europe is more committed to IoT devices for the general public.
Indeed, IoT adoption amongst manufacturers globally is set to increase as well. IDC predicts that by the end of the year, 60 percent of manufacturers globally will utilise analytics to sense and analyse data from connected products and manufacturing processes, so as to optimise their increasingly complex portfolios of products. All of this means that there is more pressure than ever on Asian manufacturers to modernise so that they stay competitive.
The Challenges For The Manufacturing Industry Or How To Survive The 4th Industrial Revolution
Although it is difficult to have a single approach in the sector, as businesses and their production assets are all different, production line managers do all share the same concerns: competition is rising, costs are being closely monitored, compliance and legislation are imposing heavy burdens, the prices of raw materials are skyrocketing, and so on. Meanwhile the market, driven by consumer behaviour, demands ever greater efficiency and responsiveness.
Increasing Customer Demand For Customisation
Today’s consumers want products and services to be tailored to their specific tastes and needs (for example, the rise of factory-customisable and modular smartphones), which makes large-scale production ineffective and inefficient, and changes manufacturing business models from ‘we sell what we make’ to ‘we make what we sell’.
However, allowing hundreds of thousands of different production configurations and characteristics to be combined to make bespoke products introduces a high degree of complexity which demands powerful and reliable systems to correctly and efficiently handle these enormous flows of data.
Changing The Business Model
Businesses across the world are moving away from business models based on actually holding products, in favor of more ‘pay-per-use’ contracts. Manufacturing businesses are increasingly going to sell outcomes and services rather than products: for example, not selling cars, but selling mobility instead. Customers will only pay for a service for as long as they need it, which means the costs of warehousing and maintenance are passed to manufacturers.
The IoT links manufacturers to their suppliers, customers and employees, but also to their machinery and materials, all the way down the production chain, which allows businesses to oversee their operations in real-time. The IoT helps manufacturers to improve and broaden the variety of services they can provide, by allowing them to respond rapidly to demand or difficulties as they arise, safeguarding lasting customer satisfaction.
Enabling True Business Visibility
Businesses adopting the IoT will be in a position to benefit from the prevalent trends in the transformation of services and consumer needs. Furthermore, powerful IoT platforms offer the infrastructure needed to handle and incorporate vast flows of data, and to reduce the complexity of operational processes, leading to product customisation etc.
Cloud computing is another indispensable component for yielding massive amount of information and increasing operational visibility. It is not only about building data centres and computing resources on demand, but also about aggregating data captured by the sensors, managing real-time analytics, and converting them into immediately actionable business insights.
Real-time processing has dramatically changed the way enterprises operate and significantly reduced the time it takes for decision-makers to get access to operational data, analyse them, and make more informed and astute decisions in real-time. In this manner, manufacturers can predict both market and operational needs and respond appropriately. This real-time visibility allows enterprises to know where their inventory, people, and equipment are at any time, allowing them to make faster deliveries to customers and ensure that the right amount of inventory is maintained where it is needed most.
In short, the business model of manufacturing businesses will be improved and more resilient thanks to enhanced productivity coupled with simultaneous cost reduction. For example, costs will be reduced by predictive maintenance and shorter shutdown periods affecting production.
Asian manufacturers should see the IoT as an essential tool that will allow them to benefit from data-driven decision-making and enhanced productivity which they will require to survive in an ultra-competitive environment and to conquer the much longer-term challenges that Industry 4.0 presents for their business models.