The IoT Impact on Business Models: What Should Manufacturers Do First?

The Industrial Internet of things is going to change business models, and manufacturers that don’t change with the times will see their competitiveness dwindle.That’s what everyone says, particularly automation suppliers. While it may be true, making major investments in these new technologies, without rethinking your entire manufacturing processes, could lead to rash, costly purchasing decisions that negatively impact your business.

IoT concepts have already impacting services in other industries: Uber, Zipcar, and Airbnb challenge the traditional business models.  The fundamental concept behind all three of these businesses is the effortless connection of the user, directly with suppliers, at a lower transaction cost.

In manufacturing, the application of IoT is primarily used to achieve efficient, make-to-order manufacturing, linking the buyer directly with the manufacturing process and all related stakeholders.   These new technologies are providing the building blocks for dramatic changes in the manufacturing industry:

  • 3D Printing/ Additive Manufacturing
  • Product Lifecycle Management (PLM) Software
  • Collaborative Robots
  • Pervasive Communications

Before making major investments in any of these new technologies, manufacturers may do well to rethink their entire manufacturing processes to see how these new possibilities could help. These technologies will continue to evolve current manufacturing processes, directly linking the producer with customers and suppliers, driving responsiveness and efficiency.

Industry 4.0, Industrial Internet of Things, and Smart Manufacturing are still in the early stages of development, and the effectiveness of new approaches is not yet clear. Small, incremental investments in pilot programs might be the best way to help learn in a constructive, productive environment, and could save a lot of time and agony, when major investments are made down the road.

>> Read more by Bill Lydon, Automation.com, March 20, 2017