How IoT can build additional revenue streams for discrete manufacturers

If you speak to any discrete manufacturer, they will tell you that it’s getting even tougher to stand out to prospects and even their own customers with traditional product/service offerings.

While there are many ways to differentiate – with innovation sitting firmly at the heart – it’s a challenge with the pace that many manufacturers are working at just to keep up with their orders.

As one innovation leads to another, we find ourselves in a time of the Internet of Things, machine learning and advanced analytics where opportunities for continued innovation and development are better than ever.

IoT for discrete manufacturing

The advancement in sensors, devices, connectivity, machines and data insights have created a powerful combination that can unlock business value, drive innovation and take discrete manufacturing business to greater heights than ever before.

With the Internet of Things, discrete manufacturers have the ability to innovate in all areas of business, from the factory floor, through the supply and demand chain to product development and after sale service.

Manufacturers capitalizing on IoT benefits

Kuka Systems Group is a great example of a manufacturer who took advantage of the Internet of Things, creating a highly automated plant that connects as many as 60,000 devices and robots to a central data-management system.

With a streamlined management environment, the system is able to adapt quickly to changes in production requirements, and powerful new access to data allows KUKA to drive actionable insights into factory operations.

“We ship our customer a complete car body every 77 seconds,” explained Jake Ladouceur, managing director, KUKA Systems Group Toledo facility. “We don’t have time to adjust source code, and we can’t introduce something that isn’t trusted and proven. Our intelligent system built with Microsoft technology enables us to react very quickly.”

Opportunities for revenue growth

In addition to the key areas mentioned above where IoT can unlock value, it also has the ability to transform business models, providing new opportunities for revenue growth.

Today, selling a product to a customer is just the beginning of an ongoing, mutually beneficial relationship when a robust after-sale subscription based service program – using the Internet of Things – is established.

By harnessing the capabilities of IoT, you are differentiating, and delivering greater value to your customers by using data that helps you to understand maintenance requirements, new product opportunities and product improvement needs.

Becoming a consulting manufacturer

As a discrete manufacturer, you’re not typically seen as a consultant, but when you understand your customers patterns and needs, and you have access to data, you can help them to improve their processes and operations.

Using a software-licensing model, you can easily offer product enhancements through software updates and charge for the enhanced functionality based on a software maintenance and updates.

There are opportunities to charge for new levels of software support while simultaneously delivering a better customer experience too. As software allows for flexible product configurations, you can quickly, easily, and inexpensively package and price their devices to uniquely address new, emerging, or niche markets that would previously have been impractical or prohibitive due to costs.

The benefits of IoT

The benefits of using the Internet of Things in discrete manufacturing doesn’t just stop at building additional or alternative revenue streams. Further benefits of IoT include:

  • Reducing manufacturing and distribution costs
  • Product life extension
  • Maximizing the use of manufacturing assets
  • Increased customer loyalty and satisfaction
  • Improving time-to-market

The discrete manufacturing series

Our series focuses on five common problems discrete manufacturers are currently facing, and how to solve them, including case study examples of where discrete manufacturers have implemented our solutions and seen success. The full series includes tip sheets – available for download – on: