The Internet of Things (IoT) is on track to dramatically transform manufacturers' products, services, and operations in 2015, according to a new IDC Manufacturing Insights report.
While the hype persists around IoT, the analyst firm notes there are many signs that show confidence in IoT is with good reason.
According to IDC Manufacturing Insights, although there are many use cases for manufacturers, IoT applications essentially boil down to two — for processes and products:
Support the process:
By 2020 at least half of all corporate stand processes will have automated data acquisition; a quarter will have self-correction capabilities.
Support the products:
By 2020, onboard service revenue will double its share of total industry revenue. Technology becomes a core product competency.
According to IDC's 2014 Global Technology and Industry Research Organisation IT Survey, manufacturers especially have high expectations for the IoT's impact on lowering operational costs.
In addition, they expect IoT investments to yield advantages in retaining customers, attracting new customers, improving service and support, and differentiating from their competition.
“As IoT provides the basis for an increasing amount of automated data acquisition, manufacturers will be able to adapt their processes and their products not just for incremental improvements but also for more transformative purposes,” says Kimberly Knickle, practice director, IDC Manufacturing Insights and author of the report.
“This includes self-healing or autonomous processes and capabilities that evolve into new business models.”
According to Knickle, current investments in IoT that are unique to the manufacturing environment are taking place in three major initiatives:
Applying IoT to the overall production process as well as individual assets, with outcomes that could increase production output, product quality, or operations and workforce safety and lower resource consumption
Applying IoT to vehicles and industrial machinery, to impact product performance, including collecting detailed information on products in the field, remote diagnostics, remote maintenance when possible, and even remote operations, with product as a service as a new delivery model.
Connected supply chains:
Applying IoT to increase visibility and coordination in the supply chain, tracking assets (trucks, cases, containers, etc.) or inventory — inbound or outbound — for more efficient supply chain execution and integrated business planning.