After years of nascent promise, the Internet of Things (IoT) is finally mature enough to go mainstream across industries that are reinventing themselves with intelligence for the new era of supply chain resilience.
While the pandemic has forced companies to reinvent just about everything, the digital transformation including IoT has been years in the making. The difference these days is how intelligence from sensors can be added to business processes, enabling organizations to create new services and transform business models that are essential.
“The time for Industry 4.0 is now, and it goes far beyond just smart manufacturing,” said Elvira Wallis, senior vice president and global head of Internet of Things at SAP. “Instead of looking at any line of business in isolation, companies need real-time intelligence to fully synchronize sales and service with operations and production – from design and sourcing through factory floor, supply chain, and the front office – so they can adapt to change more rapidly.”
Heightened Business Value from Visibility
Sensor data from machines – wherever they are located – carries heightened importance in a pandemic-driven business environment of unpredictable starts and stops. That is because it provides critical visibility into what is going on within plants and warehouses across the business. For example, Wallis reported a surge in customer inquiries about using IoT to accomplish maintenance tasks automatically, remotely, and safely.
“Interest is high in IoT-enabled automation from organizations that want to get the job done with minimal employee risk and fewer productivity losses,” Wallis said. “Remote asset diagnostics and monitoring gives companies 24/7 visibility about machine performance, eliminating unnecessary physical maintenance calls. The same applies to procurement transparency, where sensors on items reduce the need for physical inspections.”
IoT Builds Customer Loyalty
But the benefits of IoT do not stop there. IoT-based data from assets was game-changing for a power generation company based in Italy, turning it from essentially a commoditized business into a value-based premium maintenance service provider that increased customer loyalty. Using SAP Internet of Things, SAP Edge Services, and SAP Predictive Maintenance and Service, the company collected equipment sensor data at the edge on the performance of their assets and combined this with data from their SAP S/4HANA business system. By contextualizing sensor data with business data in the cloud, the company could calculate a “health score” based on readings that flagged anomalies, such as when a machine was too hot, vibrated beyond acceptable thresholds, or otherwise needed servicing.
“With these insights, customers could immediately see how assets connected to their organization were performing, while engineers and services employees could address potential performance issues faster,” Wallis explained. “The company improved performance, reducing manual processes concerning assets by 75 percent and experienced fewer downtimes and outages. They also reduced maintenance costs by five percent, conducting maintenance only when needed and heading off potential problems.”
IoT Powers Intelligent Networks for New Opportunities
Leading companies in many industries are creating new digital services from IoT-based data, creating new revenue models and keeping customers and employees safe.
One midsize industrial machine manufacturer has built an intelligent network of services that shares sensor data from its connected machines. The platform provides more than 11,000 customers with real-time performance metrics on their machines, becoming benchmarks for productivity improvements.
In Asia, an industrial-grade air purifier manufacturer used IoT-based sensors to monitor filter status, automatically notifying customers when to reorder. Customers appreciated the safety of remote monitoring as much as the pre-emptive alerts to avoid facility shutdowns.
The 95-year-old owner of a steel company that manufactured industrial bulk containers in Germany differentiated his business by placing sensors in the container lids to capture data on the contents. He spun off a new services division that tracked containers by location and measured the fill levels, temperature, vibration, and viscosity of the contents.
Customers now have an immediate view into container capacity across all locations and reduced product damage risk. In fact, the company has decreased insurance claim costs by 10 percent because the intelligent containers track exact temperature levels, providing proof of improper storage management. The manufacturer has also increased the turnover rate of bulk materials inside the containers by 20 percent using just-in-time replenishment.
Do Not Forget to Transform Human Mindsets
There is no perfect use case for IoT. Rather, every company needs to figure out the best starting point for their business challenges and objectives. Like any innovation launch, digital transformation is not just about technology, but also transforming the way people conduct business. Besides choosing easy-to-understand use cases that are likeliest to deliver quick results, Wallis recommended gaining buy-in from teams beyond the IT department, along with clear communication.
“Digital transformation cannot be an IT initiative alone,” she said. “Studies show that the most successful transformation strategies have support from all business stakeholders. People need to understand where the company is headed, what’s changing, why the change is happening now, and what’s in it for them.”
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This article originally appeared on SAP BrandVoice on Forbes.
