Manufacturing companies in the areas of machine construction, automotive, robotics and others have long started to transform their business models towards a more software-centric approach that will enable them to capitalize on the Industrial Internet of Things and to provide appealing and innovative offers to their customers. There is a lot to be gained - lean production processes, less waste, individualized products and new insights from data collected from devices.
We have talked to Manfred Bauer, a Flexera Software Major Account Manager, who is working with manufacturers all over Europe, to find out what challenges and opportunities they are facing in connection with the Industrial Internet of Things.
Manfred, you have worked with manufacturers for many years now. What developments are you seeing in the market, driven by Industry 4.0 and the Industrial Internet of Things?
It is amazing how much change we are seeing in the market. As with every industrial revolution, some companies are moving faster than others and the key areas they are working on are different across industries, but there are a few main observations:
First of all, digitization is impacting all big manufacturing companies. This means that the value creation chain is transforming from a hardware-centric to a software-centric process. By now, many manufacturers are seeing value on various levels – automation on the production floor, embedded software on devices, SaaS and Cloud applications that add new value for both end users and producers.
Secondly, the robotics industry is continuously expanding and is growing tremendously every year. But it is not only the degree to which robotics can be used; rather than coexisting and executing simple steps, they are now using highly intelligent algorithms that enable them to co-work with humans and fulfill complex tasks. This was one of the main topics at recent industry conferences like Hannover Messe (Hanover Trade Fair).
Thirdly, data plays a totally different role in the production process and during the whole lifecycle of a device. Manufacturers profit from lean and streamlined production processes as a result of continuous data analysis. Once a product has been sold and shipped, vast amounts of data accompany its lifecycle and build the foundation for usage analytics, prognoses, predictive and preventive maintenance and all other kinds of services.
The Industrial Internet of Things and Industry 4.0 in Germany drive integration and automation on the production floor and new IoT applications enable new business models and change the relationship between producer and end user completely.
Can you share examples you have seen within the device lifecycle?
It starts with planning and product development. Prototyping is merely a digital process, thanks to advanced 3D-prototyping and CAD/CAM software. Simulation in prototyping and production processes means less defective goods, less damage to expensive machines or components and a high level of predictability when a new product hits the production line.
The biggest change is certainly happening on the production floor. Probably the most significant effect of the Industrial IoT is that we don’t see a standardized and unchangeable line production anymore. Production is highly individual to the component that can be configured based on the customer’s request and will basically find its own way through the production floor based on the configuration and component parts needed. This requires everything to be connected and is a huge step from M2M where machines exchange information through point-to-point communication, to real IIoT use cases where the process integrates multiple points – other machines, the component itself, ERP software, analytics systems and many more. This is a trend that started many years ago with contract manufacturing but can now, thanks to the IIoT, be highly automated and individualized.
Let’s look at a car: We are past the days where a customer went to the shop and just picked one of the available options. Today, Daimler, BMW, Audi and others offer online stores where customers can configure their car individually – not only the digital features of a car, like Infotainment, are customizable but the hardware features as well. This is a much more direct and interactive relationship between customers and producers, based on software and data, that will probably change the supply chain completely. Auto manufacturers now have their flagship stores and the concept of actual shops and resellers might become less important in the near future. The relationship between auto manufacturer and end customer does not end with the purchase. There is a continuous exchange of data, connected to maintenance processes, updates and services.
Let me share one more example related to maintenance processes in machine construction: Let’s look at a CNC milling machine. By analyzing usage data and using telemetry, both the user and the manufacturer of the machine will now know in advance if this machine needs maintenance. Practically, this means that waste based on machine damage can be reduced, as well as machine downtime for exchange and repair.
In the second part of this interview we will have a closer look at Software Monetization processes and how they help create value.