The era of the Internet of Things (IoT) is opening new business opportunities for industrial equipment (IE) companies. As profit margins are declining at the same time machine efficiency is increasing, manufacturers are seeking alternatives ways to reduce waste and costs. IoT is offering one path to this, by networking objects, adding sensors and capturing data that can be analyzed to improve machine productivity and reliability and reduce downtime. It is allowing IE companies to create ‘pay as you go’ services, opening new paths for competition and profitability.
Click to Tweet: “IE companies that don’t rethink business models risk jeopardizing business.” – Dominik Wee @mckinsey 3ds.one/IE-EqOutAn article in the new issue of Compass magazine examines this trend of IE companies investing in IoT to develop new revenue streams through new business models. Examples from 3 companies – GE, FANUC and SKF – are explored. GE, for example, has invested nearly $1 billion in IoT, essentially changing the company’s business from selling machinery to selling outcomes, including efficiency and uptime. FANUC can monitor over 6000 robots in 26 GM factories to see if there’s any abnormal wear that could lead to a failure. If a potential failure is identified, parts can be proactively sent to address the issue before any downtime occurs. Given that each minute of factory downtime costs GM upwards of $20,000, this can lead to a tremendous savings.
To learn more about what these 3 companies and others are doing with IoT as a means to get closer to their customers and improve uptime and efficiency, read the article “From Equipment to Outcomes” now.
