6. IoT and Servitization

Question 1

What is IoT (Internet of things)?

Answer 1

Internet-of-Things (IoT) are interconnected systems of objects
from everyday life that can communicate – send or receive
data

Examples: security cameras, toothbrushes, hearing aids, cars, speakers, Apple Watches etc.

All smart, connected products, from home appliances to industrial equipment, share three core elements: physical components (such as mechanical and electrical parts); smart components (sensors, microprocessors, data storage, controls, software, an embedded operating system, and a digital user interface); and connectivity components (ports, antennae, protocols, and networks that enable communication between the product and the product cloud, which runs on remote servers and contains the product’s external operating system).

Question 2

This infrastructure enables extraordinary new product capabilities - mention the four capabilities:

Answer 2

First: Products can monitor and report on their own condition and environment

Second, complex product operations can be controlled by the user, through numerous remote-access options - Making the user able to customize the function, performance, and interface of products

Third, the combination of monitoring data end remote-control capability creates new opportunities for optimization. Algorithms can substantially improve product performance and how products work with related products in broader systems, such as smart buildings and smart farms

Fourth, the combination of monitoring data, remote control, and optimization algorithms allows autonomy. Products can learn, adapt to environment and to user preferences, service themselves and operate on their own

Question 3

Unstructured data and the data lake

Answer 3

Lots of the data gathered are unstructured (sensor readings, locations, temperatures etc.). The solution is a “data lake”, a repository in which disparate data streams can be stored in their native formats.

To get the most out of the new data resources, many companies are creating dedicated data groups that consolidate data collection, aggregation, and analytics, and are responsible for making data and insights available across functions and business units.

Question 4

Change of culture through IoT

Answer 4

Manufacturing smart, connected products requires far more coordination across functions and disciplines than traditional manufacturing does. It also involves integrating staff with varied work styles and from more-diverse backgrounds and cultures—which can be challenging. For instance, the “clock speed” of software development is generally much faster than that of traditional manufacturing. HR organizations will have to rethink many aspects of organizational structure, policies, and norms.

The first is more and deeper collaboration and integration between IT and R&D. Over time those units—and others—may start to merge.

Question 5

The new industrial revolution. Smart factories

Answer 5

The new capabilities of smart, connected machines are reshaping the operations of manufacturing plants themselves, where machines increasingly can be linked together in systems.
Example is Intel - creating new services and operations

You get predictive maintenance, improved yields, higher quality, and remote manageability

Intel having an application-ready platform with streamlined system consolidation. They add intelligence to equipment and makes a secure data flow

Question 6

What is servitization?

Answer 6

Manufacturers switching from products and production to services

Many companies have started their servitization by offering additional spare parts, helpdesks, periodic maintenance, repair, and overhaul. This helps strengthening the relationship with the customer and ensuring increased revenue throughout the lifetime of the product

Advanced services: servitization refers to industries using their products to sell “outcome as a service” rather than a product. Netflix and Spotify are probably the most well-known example of this, delivering media as a service, rather than customers buying the CDs, DVDs. An office buys document management rather than a printer and photocopier

Customers get:
- Pay for use instead for one-time lump sum payment
- Assured product performance
- Commitment to innovation and reduce cost over time
In return, the customer agrees to long-term contracts, preventing competitors to get a foothold + creating a good relationship