Resetting Expectations in the Industrial IoT World

1998 saw the publication of the curiously-named business book “Who Moved My Cheese?” The work went on to become one of the bestselling business books, selling 26 million copies globally. The proverbial cheese in the book is a metaphor for whatever you want it to be. It could be a pallet in a warehouse, a tool on a workbench, a goal like uptime or something completely unrelated to technology.

Coincidentally, a year after the publication of that book, Kevin Ashton, then a brand manager at Procter & Gamble, would coin the term “Internet of Things” after pondering why a specific shade of brown lipstick went mysteriously missing from store shelves. His solution was to use a radio-enabled microchip embedded into the lipstick to help the company and its customers track goods. “When we talk about the Internet of Things, what we mean is computers gathering information by themselves,” Ashton said in a 2017 interview. In other words, IoT devices could automate data-gathering tasks people had manually entered into computers in the past. In the 21st century, it is possible for machines to become, in a sense, situationally aware.

Now, some twenty years after the coining of the term Internet of Things, the concept using networked electronics for assessment doesn’t seem particularly novel. “It’s pretty easy to know where something is,” said Scott Nelson, chief product officer at Digi International. “I just put a GPS on it, and I know where it is at all times.”

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But situational awareness is “not enough,” Nelson said. The technology now broadly referred to as IoT has the potential to change user experience from focusing on situational awareness to behavioral performance or helping to support a defined user intent. Rather than the system just telling you where the proverbial cheese is, “now it’s going to advise you when to eat the cheese,” Nelson said, referring to the aforementioned business book. Put differently, the focus of the Internet of Things is no longer on the things themselves — it’s on the overall business or activity those things are designed to support.

Several years ago, the hype surrounding IoT drew skepticism from some professionals in fields like manufacturing, said Guneet Bedi, general manager of the Americas for Relayr. “There were a lot of naysayers. People weren’t sure if IoT and digital were actually going to work, especially in the industrial world,” Bedi said. The fundamental sales pitch that many billions of devices would be connected, and automatically generate trillions in revenue led to a healthy amount of skepticism. Currently, however, the majority of professionals in the industrial sector, according to survey data, are convinced of industrial IoT’s potential. “Now, the challenges I see a lot are definitely, one, the business, but, more specifically, what is the business outcome and in what time frame?” Bedi asked.

In many industries, the question of what is ultimately bought and sold is changing. “Up in the boardroom, they’re talking about how we’re going to change our business,” said Mike Lackey, global vice president of solution management, line of business manufacturing at SAP. And yes, in some cases, that might involve ultimately retooling a product as a service. “I’ve had a conversation with car manufacturers. In the future, you’re not going to buy a car,” Lackey said. “You’re going to buy kilometers or miles. You’ll sign a contract for, say, 100,000 miles and you’ll get a sedan for 60,000, a convertible for 20,000 and an SUV for 20,000 miles.” On a beautiful day on the weekend, you might opt to swap your sedan for a convertible.

Manufacturers working to enable such experiences must revise their internal processes. This realization is leading manufacturers to shift their thinking about IoT, said Werner Reuss, head of industrial IoT at Orange Business Services. In the past, some industrial professionals thought of IoT largely in terms of connectivity. “The discussion is now more focused on the smart factory. How do you optimize the production line?” Reuss said. “This notion of a smart factory is gaining more traction, and will be the driver for underlying technologies and not the other way around.”

“It’s not about technology,” agreed Çağlayan Arkan, global lead, manufacturing and resources industry at Microsoft. “It’s about business value and outcomes.”

Lackey points to the case of blinds and shades manufacturer Hunter Douglas, which has evolved its business to support new functionality for end users (for instance, controlling shades with Alexa voice commands, remote control or timer) while also responding to an uptick in demand from consumers for custom blinds. In the past, all of their shades were stock. “But they saw their business change,” Lackey said. “Today, they make 35,000 custom blinds per day.” That shift required upgrading their manufacturing capabilities while changing how they interact with customers.

Another use case, a Bosch track-and-trace testbed organized in conjunction with the Industrial Internet Consortium, also illustrates an evolution from situational awareness to align more closely with an overall objective. Initially envisioned as factory technology capable of detecting the location of a tool within a meter, the track-and-trace initiative has evolved into a system to ensure precise assembly operations. It can detect when an operator puts the wrong screw in a hole or when the operator applies an incorrect amount of torque to insert that screw.

The Bosch project broadly aligns with Nelson’s vision of IoT projects supporting workflow compliance. In general, an organization pursuing this objective will have “a workflow defined that has a production efficiency expected,” Nelson said. “And the more compliant you are with the workflow, and the better designed the workflow is, the more productive it is. It’s an efficiency and economic outcome.”

Beyond workflow compliance in Nelson’s view is behavioral performance, which, in the professional world, is employee engagement. “Employee engagement is is fairly consistently and maybe unanimously understood to improve the outcomes and the output of the company,” he said. “I quote Simon Sinek who says: ‘Customers will never love a company until the employees love it first.’ It’s all about passion and engagement in the output.”  

Industrial firms should be open to rethinking their business, Bedi said, but have a realistic sense of how they can evolve. Industrial companies must understand how they can “crawl, walk and finally run and in what horizon,” he said. “For example, a lot of big market companies understand it could take 12 months just to retrain their sales team.” Organizations should do their homework to understand how quickly to move and what is involved in redefining their operations. While IIoT promises such as predictive maintenance might sound straightforward, “it takes time to build algorithms and models for that,” Bedi said. “It could end up being easy, but it is not quick.”