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September 14, 2017

For industrial manufacturers, the Internet of Things (IoT) is an incredibly exciting technology as it makes it possible to follow customers, out of the shop floor, and onto their workspace. Their new-age products, embedded with smart sensors that capture an incredible amount of data about usage and performance, transmit information wirelessly, often in real-time. This is new data, something they couldnt possibly get access to, in a world without IoT.

Lets take a quick look at an example to put things in perspective. In 2014, the National Highway Traffic Safety Administration issued two recall notices one to Tesla, and the other to GM. Tesla, who had about 22,000 vehicles on the street then, provided an over the air update to fix the problem as its vehicles were embedded with IoT-enabled sensors. GM, on the other hand, had to recall 8.4 million vehicles in order to provide the update. This stark contrast highlights quite a few advantages of IoT reduced costs and increased customer satisfaction, for example.

Why IoT Matters to Manufacturers

IoT tracks products in real-time, which means that manufacturers can gain insights into how their products are used, how they perform, and track when they fail. This information is very valuable because it provides the company with a unique competitive advantage the insights are available only to them.

IoT also allows companies, depending on the financial feasibility, to adopt a servitization model and offer their products on a pay-per-use type agreement. For example, adopted in the aircraft engine industry by companies such as Rolls Royce and Pratt & Whitney, servitization is becoming more and more popular with customers across the globe. Xerox of USA, Alstom Transport of France, and Man Truck & Bus of Germany are some of the early-adopters of the servitization business model.

Preparing for an IoT-led Future

The number of connected devices is growing every year according to Gartners predictions, 8.4 billion connected things will be in use worldwide in 2017, up 31 percent from 2016, and will reach 20.4 billion by 2020*. Consumers are looking forward to IoT-driven businesses and leaders are responding to it, as illustrated through examples earlier. Businesses need to prepare now.

IoT can help manufacturers move beyond the supply of commoditized products. It enables them to change their proposition, and deliver critical maintenance services. Doing so makes a lasting impact on the lives of their customers. That impact can be magnified if, by learning how their products are used and the limitations customers face, and they develop products that are better suited to customers needs. Loyal customers will be converted into fans as they see their businesses running more smoothly.

To gain a better understanding of IoT and explore opportunities to help turbocharge your manufacturing business, read my article The Magic That Happens When Manufacturers Digitally Attach Themselves to Their Products in the latest edition of Perspectives, our management journal.

* Gartner Press Release “Gartner Says 8.4 Billion Connected “Things” Will Be in Use in 2017, Up 31 Percent From 2016″ February 7, 2017

Subhash heads TCSs Customer Experience Management Value Engine at TCS Manufacturing that specializes in the areas of eCommerce, Sales, Marketing, Service and Parts Management. He has advised many leading global manufacturers in turn-around strategies, digitalization, cost reduction, business transformation, and IT strategy in the areas of CEM. Subhash brings over 24+ years of executive experience and advisory services in customer experience management spanning across functional areas of marketing, Sales, After Sales, warranty, service parts, and dealer management. He has worked with a diverse range of manufacturing companies including TATA Motors, JV companies of Hitachi, John Deere; Case New Holland and has published a number of papers on Digital Customer Experience, Service and Parts management in various international forums.


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