THE BENEFITS OF REAL-TIME DATA
The continuous circular data flow changes how we design things, how we manufacture them, how we service them, and even how we market them: all because we have a continuous data loop for the first time.
Consider these benefits:
“G.E. is adopting practices like releasing stripped-down products quickly, monitoring usage, and rapidly changing designs depending on how things are used by customers. These approaches follow the ‘lean startup’ style at many software-intensive Internet companies. ‘We’re getting these offerings done in three, six, nine months,’ [William Ruh, the company VP of Global Software] said. ‘It used to take three years.’” Caterpillar’s design process is refined because, for the first time, it knows how its heavy equipment is actually being used in the field.
A major reason Siemens achieves 99.9985 percent quality at its “Factory of the Future” is that the real factory is paralleled by a “smart factory digital twin: representing a production system . . . which is completely connected to the main PLM [Siemens’s proprietary software] data repository via sensors, SCADA systems, PLCs and other automation devices. In such a smart factory, all the events happening on the shop floor during production are recorded and the relevant ones are pushed back to the PLM system either directly or through the cloud.”
Instead of doing scheduled maintenance as in the past, in which maintenance intervals were as much guesstimate as science, with the IoT, maintenance is dictated by the product’s actual status. The repair is scheduled at the first sign of an issue, before it becomes acute. Because of the real-time data from actual operations, the mechanic knows in advance what the problem is (imagine how much time and testing is required to diagnose a problem if the machine is turned off to protect the mechanic) and the replacement parts are already delivered by the time it enters the repair facility.
Selling services instead of products
Because of the incredible amount of data that jet engines send to the ground, the turbine manufacturers have been emboldened to switch to a totally new marketing strategy. GE, with its “OnPoint” program, doesn’t sell the engines but leases them, with the airline’s cost determined by how much thrust they generate. That means if they’re sitting in the repair facility they aren’t generating revenue, so the manufacturers have a powerful incentive to make the repairs as quickly and cheaply as possible.
Additional income sources
Even better, as mentioned previously, the turbine manufacturers have created new revenue streams: airlines can pay an additional fee to get access to the flight data, which they can mash up with variables such as weather data and fuel prices to maximize their planes’ flying efficiency.
We will discuss all of these advantages at length later in the book [The Future Is Smart]. It’s not hard to imagine a day in the near future when companies realize that maximizing precision requires sharing that real-time data with their supply chains, distribution networks, and customers, and that such a continuous data loop will mean just-in-time resupplying and distribution. Customers (if they opt in) may get real-time suggestions on how to fine-tune their equipment’s operations for maximum efficiency and minimum operating costs.
Adapted with permission from The Future is Smart: How Your Company Can Capitalize on the Internet of Things--and Win in a Connected Economy by W. David Stephenson, copyright W. David Stephenson.