To say the Internet of Things (IoT) is a hot topic within the manufacturing industry would be an understatement. As we’ve discussed in depth right here on our blog, IoT is disrupting past ways of working, digitalizing processes to drive efficiencies and increase business intelligence.
While much of the discussion has centered on the benefits that IoT can bring for manufacturers, little has been said about the additional business opportunities the growth of IoT capabilities can bring.
Manufacturers across the globe are implementing IoT capabilities into their production processes. This isn’t as simple as flicking a switch on a machine; it usually involves specialist parts and components, from sensors to chips and receivers. The rise of IoT’s popularity has led to increasing demands for parts, which has ultimately created an emerging market for manufacturers.
In this blog post, I will discuss how the rising popularity of the Internet of Things in manufacturing is increasing opportunities for manufacturers in more ways than one.
As I’ve already mentioned, the hardware itself is crucial to implementing the IoT within any business. For example, without the sensors to fit to machines, they remain just that — machines, and not digitally connected devices.
It would be easy to assume that manufacturers of IoT hardware are rejoicing at the rising popularity of the IoT—and you’d be largely right. 55% of IoT professionals saw 55% of their profit from hardware sales (Canonical, 2017).
Despite this clearly lucrative market, manufacturers are facing something of a conundrum. Like anything, an increase in popularity has triggered a race to produce in-demand hardware that is smaller, more efficient and ultimately cheaper. Think back to when the first ever tablet computer launched; prices were sky high, yet now you can pick up a high performance device for around £30.
In theory, this is what should have happened to the production of IoT parts — but has it? Under the pressure of commoditization, some manufacturers are reducing the costs of their end products without significantly reducing their bills of materials. They therefore face a choice; to position themselves within a particular niche and use premium materials or differentiate commoditized components to suit applications across sectors.
Software & Services
Although the increased demand for IoT parts and hardware may be one of the most obvious advantages of its growing inclusion within manufacturing, it has also lead to software and services opportunities.
With each new development, it is rapidly becoming clear that the IoT is starting to root itself into the fundamentals of manufacturing. This creates a wealth of opportunities in itself, for companies like Datawright who can offer advice and implement IoT systems and software, to those who work on maintaining the equipment for manufacturers.
As we mentioned in our previous blog post around servitization in manufacturing, manufacturers are getting wiser to these possibilities. In the past, some manufacturers have simply manufactured a product, leaving it to third parties to deliver maintenance and servicing. Now, manufacturers are branching out, a move that is largely driven by the IoT.
As any new technology does, the IoT has led to the creation of a number of job opportunities. According to some estimates, by 2020, there will be approximately 4.5 million people working in an IoT-related role.
The digitalization of manufacturing and the associated opportunities brought about by the IoT signals good news for manufacturers who are actively recruiting. As the younger generated is rooted in technology having grown up with the internet, laptops, smartphones and other gadgets, a manufacturer’s diversification through IoT could help them attract the industry’s brightest talent.
Considering that just 38% of manufacturers believe they already have the skills their supply chain needs within their workforce, this is one IoT-related opportunity that manufacturers can’t afford to miss out on.
Clearly then, as well as the efficiencies the IoT can drive within the manufacturing process itself, it has opened numerous doors for the industry more widely. It’s becoming ever more apparent that the IoT is not simply a fad trend so, with this in mind, will you seize its potential or let it slip you by?