How can a logistics system become a smart factory? Integrating Internet of Things (IoT) data into business processes can help companies innovate with purpose by taking on full responsibility for their products.
Water scarcity has been identified as one of the top global challenges by the World Economic Forum, both in terms of risk and potential impact. In fact, water and resource scarcity overall is a major challenge for many businesses, as production processes are halted without access to relevant materials or sufficient energy requirements. The associated production and logistics activities of these businesses are responsible for significant social and environmental impacts, with global manufacturing consuming about 54 percent of the world’s global energy.
One solution is for businesses to take full responsibility for their products beyond point-of-sale. By obtaining insights into the usage and status of their product, businesses can provide services tailored to maximizing operational efficiency and extending product lifetime. For instance, a company selling power drills can use data about drill usage to optimize product and service proposals.
Until now, it’s been difficult to understand exactly how customers use a product, determine which failures occur, or evaluate which supporting equipment or services might be useful. The Internet of Things, through its ability to facilitate physical objects and sense their environment, can provide insights like these, which we could never have dreamed of in the past.
When integrated with existing business processes, such as field service management or predictive maintenance, these new insights can create real customer value by enabling companies to monitor a product’s entire lifecycle.
GEBHARDT, a company selling complex shop floor installations, applied IoT to understand when gears need to be replaced by monitoring the temperature of each motor. It analyzes temperature data with the help of machine learning algorithms that trigger the maintenance process whenever a critical status is detected. A service technician will then investigate the situation and repair or replace the gear as needed. “Predictive maintenance and augmented reality glasses hugely simplify machine inspection,” Karl Denz, head of Manufacturing Tools at the GEBHARDT Group, said. “We have now virtually eliminated unplanned downtime.”
GEBHARDT even went one step further in utilizing its IoT data and transformed the business by becoming a comprehensive service provider of smart logistics. This new business model means the company now sells logistic services and retains responsibility for its product even when in use at the customer site.
IoT-based insights, which can immediately be turned into actionable tasks, helped the company to avoid product failures, plan maintenance activities better, and save costs. Most importantly, the company transformed its customer experience.
Businesses that take full and lasting responsibility for their products have a vested interest in providing top-notch, long-term, high quality as opposed to building on short-term consumption associated with a throwaway society. Such businesses help ensure long-term economic success while addressing resource scarcity to help solve one of the greatest challenges facing our world today.