Big data. Big Benefits.
As the number of sensors, controllers and other devices connected to the Internet grows, so does the amount of data being collected and transmitted back and forth across the cloud. For manufacturers, harnessing all this new data and then knowing what to do with it poses significant challenges. Nonetheless, these are challenges that need to be overcome, as harnessing ‘big data’ sets and incorporating the resultant analysis into a strategy towards improving business practices and processes, could be transformative.
Big data and the Internet of Things is already happening, and according to Accenture, “Manufacturers soon will be building intelligence into every machine they produce and the innovative applications that accompany these smart machines will be vehicles for driving new revenue streams out of product-service hybrids.”
But the opportunity is not just in connecting a device to the Internet; it’s in exploiting the resultant data. The reason big data is so critical is because it has the power to fundamentally change the decision making process for those that embrace it, and is essential for developing corporate operational efficiency strategies.
As smart products drive smart procedures and processes, what results is smarter industry. Intelligent analysis then leads to knowledge, insight and transparency; virtues that will permeate throughout manufacturing, and ultimately business models will be refined as new information informs the strategic decision making process.
Given a smarter infrastructure and a platform to capture and analyse their data, manufacturers have the opportunity to integrate various elements of their value chain, linking sales and marketing with production and logistics through the transparency of information, and this can help manufacturers implement changes in a more tactical way. Decisions about pricing, for example, can happen with a much higher degree of frequency, in fact almost in real-time in some instances where automation can take place.
This kind of application of big data analysis is already evident in use cases for smart meters, whereby Utility companies, with access to large scale, real-time data on energy consumption can both manage demand more efficiently and in turn then set real-time prices. With price signals being sent to the home directly from the energy supplier, there is no reason why, given the right technology, appliance manufacturers couldn’t incorporate this information into their products to make them smart (or smarter), perhaps using this information in automation for energy saving. Big data and smarter industry not only enables companies to improve their own products, procedures and processes, but it creates opportunities for other sectors to exploit the general advancement.
A report by Tata Consultancy Services showed that the sales and marketing functions were getting the most big data investment. This is not surprising as these functions are most closely linked to generating revenue. Again, it’s the decision making process that sees the improvements; sharpening the response times of marketing and sales activities as well as improving the effectiveness of the functions as more data, improved accuracy of data, and more relevant data facilitate a much deeper understanding of the customer’s relationship with the brand.
Whilst sales and marketing see the greatest investment, it’s logistics that is expected to achieve the highest big data ROI, with fault tracking and supply planning at the top of the chart for most important expected benefits. To take a boiler manufacturer as an example, fault reporting can play a huge part in any cost saving practices made possible by an internet connected appliance. With most faults taking on average two callouts to resolve – one to diagnose the problem, the next to fix it – if the fault can be diagnosed remotely then callouts can be halved.
In a report from Accenture titled “Driving unconventional growth through the Industrial Internet of Things”, the use of data analysis to inform predictive maintenance of assets can “save companies up to 12 percent over scheduled repairs, can reduce overall maintenance costs by up to 30 percent and can eliminate breakdowns by 70 percent.” The cost savings realised here are compelling enough, but there is a secondary benefit to the manufacturer, in that they are indirectly improving the customer experience by reducing the amount of visits needed to people’s homes and providing a slicker aftercare service.
The benefits of the Internet of Things and big data can impact manufacturing at every level, but this makes the transition from “offline” to “online” even more of a daunting prospect, with the pressure to get it right first time considerable. And, contrary to some proponents of the advancement of the IoT – in particular Integrators, IoT platform companies etc. – developing smart, Internet connected ecosystems is not an easy process. This is all the more reason for manufacturers to do it right. And do it once.