It’s no secret that the Internet of Things (IoT) poises to have a big impact on how organizations design, produce and sell products and services. Companies are looking at how the IoT can be leveraged across their entire operation. It involves how they identify new business models and source materials, to how they streamline production and manage the customer experience. Here is a compilation of IoT s‘ impact on business.
IoT-enabled manufacturing as a high or very high priority for their enterprises and in the manufacturing sector. This seems logical given the impact the IoT can have on almost any product-oriented business. There will be a dramatic impact on overall quality once IoT-based solutions are introduced on the factory floor. They help manufacturers detect substandard materials and ensuring adherence to product specifications. For brands, the resulting higher level of quality generates cost savings throughout a product’s life cycle. Production optimization drives additional benefits.
For companies like Harley-Davidson, with complex manufacturing operations, investing in IoT-enabled production facilities is a relatively simple decision with tangible results. Every step in production is tracked and recorded into a real-time performance management system. As part of the implementation, Harley-Davidson installed software and sensors that measure, record and manage the performance of different equipment and processes. The results of Harley-Davidson’s efforts to optimize production have been profound. They have reduced costs by 7%, improved employee productivity by 2.4% and increased net margin by an impressive 19%.
Supply Chain Management
The overall management of the supply chain was a priority for their company. For companies with sprawling logistics operations, this seems obvious. Amazon, for example, has experienced rapid growth in the past few years. It currently manages over 500 million stock keeping units (SKUs). It operates more than 490 fulfillment centers, hubs and other locations around the globe. Some of them are over 1 million square feet in area.
Amazon employees used to walk through these massive fulfillment centers, scanning and picking products. But in 2012, Amazon acquired Kiva Systems, which manufactures IoT-enabled robots that are now used to automate that process. These robots help to cut operating expenses by 20%. They also help in saving an estimated $22 million every year in each and increase efficiency. If the Kiva robots were installed at all of Amazon’s estimated 255 distribution centers it can save the company more than $5 billion annually.
Assest Tracking and Management
The IoT can also improve asset tracking and management, another area that’s important to executives. Seventy-four percent of respondents in the Forbes Insights survey said asset tracking and management was a large priority for their companies.
For organizations with a large inventory of assets, the IoT can provide important information about the location, health, and efficiency of equipment. Consider Sullair, for instance. For more than 50 years, the company has manufactured air compressors that are used in a wide variety of industrial applications. The company’s redesigned remote monitoring IoT solution—AirLinx—is a standard feature across Sullair’s product line, enabling customers to monitor their compressors and receive maintenance alerts that help minimize downtime.
Financial Decision Making
One challenge for financial leaders in any business is gaining access to metrics that can help avoid risk while simultaneously taking advantage of the opportunities these new insights present. Finance is one of the functions they were prioritizing most. The IoT can play an important role in financial decision making. It is done providing real-time visibility that complements data from enterprise resource planning (ERP) and accounting systems. It allows for a more holistic view of the enterprise.
Atria Power is one of India’s largest independent power producers. Through a partnership, it recently created a forecasting model for its power generation and distribution network. Atria has multiple locations that use both wind and solar technology sourced from several different manufacturers.
Every 90 minutes, the IoT-enabled solution sends details on the equipment and environmental conditions. This helps Atria determine how much energy will be produced over the next 24 hours. With this information, Atria Power can more accurately forecast how much energy it can provide to utilities. And also plan for the storage of excess energy that can be sold later.
IoT is in its potential to help organizations, improve customer experience (CX). Potential improvements to CX was one of the most important opportunities for the IoT. While this seems obvious in the consumer space, the IoT can also dramatically impact how customers procure and consume industrial equipment.
Caterpillar’s IoT-enabled products increase the value it provides to its customers by reducing operating costs, increasing efficiency and improving productivity. In some cases, these tools have even led to full autonomy. Caterpillar’s autonomous mining vehicles, which can function for longer periods and along more precise routes than manually driven vehicles, have helped increase mine productivity by over 20%.
As these examples show, the IoT has the potential to help almost any company move its business forward. Whether it’s through production optimization, a streamlined supply chain, better asset tracking and management, improved financial decision making or a better customer experience, the IoT can, and will continue to, improve the bottom line for companies in nearly every vertical.