iJUNCO tells you: Are there any successful cases of the Industrial Internet of Things?

Industrial companies are increasingly looking for value through interconnected systems. However, few success stories of the Industrial Internet of Things contain enough detail to point the way for others. In addition, statistics like "27% more efficient" or "19% more productive" are rarely meaningful or can be replicated to other business and vertical applications. Fortunately, a company recently shared details of their method and experience of successful digital transformation.

A leading device maker changed direction with IoT

With customers all over the world, this industrial equipment supplier is now leading the development trend of intelligent manufacturing. But this is not always the case. For most of its 50-year history, the organization thrived as an equipment company with a small service department and aftermarket parts business. Then, the world began to change. First, international competition and technological progress meant that more “good enough” choices needed to be offered to customers at lower prices; in addition, many independent operators and general-purpose component manufacturers were eating service contracts and Aftermarket opportunities; Secondly, the retired electromechanical employees may disrupt the key knowledge and experience chain needed to develop and maintain new and used equipment.

Are there any successful cases of the Industrial Internet of Things?

The company responded. To maintain their industry leadership over the next 50 years, they transformed from a product sales company to a solution sales company. And this is the best result of the Industrial Internet of Things. Today, they provide networked equipment systems for production facilities in various industries. Four years ago, service and after-sales accounted for only 40% of their business revenue. Now, this number is 60%, and the future goal is to account for 75% of total revenue. The Industrial Internet of Things they adopted has fundamentally changed the type of revenue that will drive their future growth. In addition, it is essential that the Internet of Things is strengthening its relationship with every customer and increasing the sustainability of overall revenue.

Their story proves that the Internet of Things is not about data at all, but about making your employees and customers more efficient and creating more value, connecting people and processes, and combining digital and physical systems to Get better business results. It blurs the lines between supplier and customer roles, and between the database and silos of different systems.

Practical Digital Transformation Approach

In the face of uncertainty and hype, the company's leaders chose a “practical” approach to digital transformation measurement. First, they adopted the Internet of Things through an iterative process of value-added measurements. It is worth noting that the goal they chose was to increase internal efficiency rather than focus on new customer products.

As a result, usage data from internal equipment at customer facilities can now support more cost-effective service teams and reduce on-site visits. In addition, understanding how their equipment operates in the field allows product teams to proactively identify problem areas and continually improve equipment performance. Both use cases are internal and not directly to the customer. However, their customers will ultimately benefit from the higher operational efficiencies brought by these intelligent systems.

Going forward, equipment utilization numbers will better prepare sales teams to guide customers in choosing the system that best meets their true needs and to inform warranty management issues. The networked system creates value that exceeds customer expectations in every link.

In recent years, many companies have viewed a lack of customer interest in the Internet of Things as a barrier to funding initial connected product initiatives. It's not surprising that facility operators may not know what "Internet of Things" means, but they are all looking for ways to reduce unplanned downtime and increase productivity. As revealed, using IoT to improve your internal processes can bring additional benefits to your customers, regardless of whether they understand the operating mechanism behind the results.

Real value creation through networked product solutions

In the eyes of the company's leadership and its investors, true value creation is achieved by transforming from a historically capital-intensive enterprise to a solution sales enterprise—and by connecting equipment more directly to customers.

Increasing the availability of data to increase efficiency and capital utilization is driving rapid integration of plant operations. However, paradoxically, this has also led to a reduction in equipment density in customer operations. However, while smarter machines may reduce the number of machines required in each facility, they are generating a reverse demand for additional services and support from networked system providers, altering revenue streams and enhancing customer relationships.

The benefits are huge. In many industries, the after-sales service, replacement parts, and consumables business is more profitable for hardware vendors than initial equipment sales. In addition, these services often impact the customer's business outcomes more than the mechanical and electrical performance of the machine itself. This is a win-win situation. Through business transformation, equipment suppliers are transformed into service providers, and profits increase, while manufacturers achieve similar benefits through higher operational efficiency and productivity of their facilities.

Radical change

To further advance, the company is revolutionizing its entire organization, from their engineering department and field service team to sales organization and marketing strategy. They are well aware that the transition from the electromechanical business to the solutions business is not only a fundamental change in the required skills, but also a fundamental change in organizational culture. It's not just about hiring a large number of software engineers, it's about how to interact with customers at all levels.

Finally, they provide a final piece of advice for equipment providers starting their own IoT journey: Make sure you have an adequate financial budget and invest every year to create value. Investing in the hope that explosive growth will occur within a year is not a wise strategy. This is not how you use the Industrial Internet of Things to win the market, and of course it is not the actual practice of digital transformation.