The Industrial Internet of Things (IIoT) is changing the game for the manufacturing sector, providing unparalleled insights and new revenue opportunities. With IIoT, data can be accessed directly from machines, even at the component level, to identify production bottlenecks, breakdowns, and process gaps. But it doesn't stop there.
Hyperconnectivity and the widespread use of sensors create opportunities for new business models1 that leverage this data to drive revenue growth. Don't miss out on the latest trends and innovations - discover the 5 new IIoT-enabled models that can transform your manufacturing business today.
1) Pay-per-use model
With the increase in digitalisation, there has been a shift from product- to service-based business models. IIoT enables manufacturers to operationalise their services strategy by using sensors to monitor different parameters that they can use to create subscription models.
An example is Rolls-Royce's Machine-as-a-Service programme which charges airlines a fixed per-hour rate for using the company's engines on their planes. Rolls-Royce retains ownership of the engines and maintains them through IIoT sensors that send machine data to their monitoring sensors in real time.
With subscriptions based on usage, customers can reduce their up-front investments in equipment and account for their spending in operational expenditure.
2) Outcome-based model
The outcome-based approach takes the pay-per-use model one step further. It is based on the premise that customers are more willing to pay to achieve the desired outcomes rather than for the equipment's use. This helps generate new value for the entire manufacturer and customer chain.
For the customer constantly looking to improve the bottom line, service level agreements (SLAs) help them avoid losses due to equipment failure, waste, and re-work.
For the manufacturer, any service offering that can guarantee the reduction of such losses can command a premium. It also helps to secure the revenue stream from maintenance services as part of the business model, cutting out after-market pirates.
3) Asset-sharing model
Equipment is a major expenditure for many industries, and companies will want to ensure that they can optimise its use to justify the spending.
An asset-sharing business model leveraging IIoT helps them sell excess capacity back to the market. IIoT sensors track equipment usage to estimate share percentages while monitoring machine data in real time to minimise breakdowns. Several businesses can access the data and reserve time on the machines as needed.
The company can use this model on its assets, so it ends up paying a reduced price for the equipment, or it can set up a business renting out large assets for sharing.
4) Asset-tracking model
IIoT also offers opportunities in Asset Tracking-as-a-Service, where connected devices in the supply chain help businesses identify, monitor and track assets in real-time throughout the product lifecycle. This enables them to protect assets from loss or theft and monitor them for quality assurance and maintenance. With the data generated by connected devices, companies can check on their assets regularly and know when to repair, fix or replace them before they fail.
The asset-tracking model can also monitor the supply chain to identify inefficiencies, optimise workflows and increase visibility.
An example is the tracking of temperature-sensitive cargo, such as food products or pharmaceuticals which require precise temperature controls throughout the cold chain. IIoT sensors and online tracking platforms help companies ensure complete cargo visibility, maintain adequate temperatures and take action quickly if any issues arise.
5) IIoT-as-a-Service (IIoTaas)
An IIoT solution can be offered as a service with connected devices managed over a cloud-based infrastructure instead of being sold as a hardware and software product.
An example is a sensor-based service to detect machine wear and tear and proactively alert the company of the need for maintenance before critical parts deteriorate. Subscription fees for the service could be charged monthly or periodically over a fixed time frame.
IIoTaaS allows companies to deploy connected systems quickly. They provide plug-and-play capabilities for various connected devices and services, such as device management, security and advanced analytics.
