To say that the global manufacturing industry has undergone an era of profound upheaval (or disruption) would be an understatement.
Today, there is another, more far-reaching form of disruption in the manufacturing sector, also known as the Internet of Things or IoT. The IoT is fast becoming one of most disruptive forces that Australia’s and indeed, the global manufacturing sector has ever faced. The modern manufacturing plant floor is a hub of technology, sensors, electronic controls and automated equipment.
These interconnected devices drive efficiency, quality as well as flexibility. This is where manufacturers will see the biggest impact of this disruption. Fast, efficient and flexible computerized machines are provided instructions for the exact requirements for each product at each moment of production.
This is a full-scale transformation of the old-style “economies of scale” approach that drove mass-produced consumer goods. Connected tools and machines are a key aspect of these changes. Take an IoT-enabled torque wrench in the assembly of a complex part, as a simple example.
When connected to the cloud, a torque wrench can capture the torque applied to a specific part, as well as information like the specific wrench that was used, when that wrench was last calibrated and the employee(s) who used it. Faults can be detected in real time, and even when they’re missed the cloud can trace every part affected back to the root cause. Quality and speed are the first things that will be improved in such a hyper-connected environment.
This same level and depth of visibility won’t stop when the product leaves the plant. Smart products will not only interact with the customer in new ways but will also be able to stay in contact with the producer for better long-term performance, maintenance and support. Quality issues not only get service attention, but can (and do) influence future product design.
Sensor-connected smart technology via the IoT brings processes and products together into a new ecosystem for added customer value. Put into a practical global context, IDC estimates there will be 30 billion sensor-connected “things” by 2020. This change defines a fundamental shift in how value is created for individual consumers, and across the entire global economy.
So how can disruption help the manufacturing industry? What is mainly transformative about the IoT is the changing nature of the products that companies will make and how they will be made. Smart, connected products are generating new value in ways we couldn’t imagine even five years ago – from reduced costs of production to improved efficiencies in areas like service and innovation, opening up new landscapes for invention and growth.
To compete, differentiate, and win in this new IoT world, companies must recognize the transformative (again, disruptive) power of the IoT – and be ready to collect, analyze and capitalize on the information (data) now being generated by customers, suppliers and the products themselves. In other words, companies must now be also ready to identify and assess potentially profitable new business opportunities that all this product-generated data uncovers.
Its time for manufacturers to think and act outside of the box A study from the Economist Intelligence Unit found 87 per cent of leading executives from across the globe have had operations affected by out-of-date infrastructure. New technologies that can identify issues with infrastructure before they occur will be needed by companies to put them on a firm footing for the future.
Such software will help companies improve efficiency, extend the life of assets, reduce the risk of failure and improve the ability of businesses to meet customer expectations and demand.
These same leading executives understand that their strategic competitive advantages might erode or be enhanced by emerging technical solutions. Disruptive technologies could potentially raise productivity, attract more customers, inspire new market strategies, and drive substantial growth.
From the perspective of today’s (and tomorrow’s) manufacturing, adopting these technologies is no longer simply optional or convenient. It’s a necessity to remain competitive. However, getting the right solution is half of the battle and experience suggests that success is down to procuring the right software from the right provider.
Sage Business Solutions