Every thing to play for

Posted on 17 Mar 2014 by The Manufacturer

Thomas Svensson, senior vice president, ThingWorx EMEA discusses David Cameron’s recent commitment to fund research into the Internet of Things and the implications of this movement for manufacturers.

Government backing

On March 10 British Prime Minster David Cameron opened the CeBIT technology fair in Hannover with a speech which committed £45m to the development of the Internet of Things.

Mr Cameron described how he intended experts from the UK to work with counterparts in Germany to investigate commercial and social applications for the Internet of Things which he said has “enormous potential to change our lives“.

Key messages in this speech included a commitment to collaboration between key universities in Britain and Germany to advance understanding, capability and potential in the two nations‘ communications technologies so that they can support parallel advances in the Internet of Things.

Cameron also took the opportunity to raise the profile of the recently published Specturm Strategies document which describes how the UK will strive to improve the way mobile network spectrums are managed so that the the huge number of internet-connected devices that are expected to come online over the next decade can be better supported.

Read David Cameron’s CeBIT speech in full here bit.ly/CameronCeBITopening.

Thomas Svensson, senior vice president Thingworx EMEA
Thomas Svensson, senior vice president, ThingWorx EMEA

Is government investment in the Internet of Things focussing on the right areas? Where is the Internet of Things likely to make the biggest impact in industry and society?

We believe the biggest impact will first be felt within manufacturing.

As the Internet of Things [IoT] era begins to take shape, the manufacturing industry is being faced with yet another set of challenges to remain competitive in a smart, connected world.

Because experts tell us that the IoT is gauged to potentially create $6.2trillion (USD) in new economic value by 2015, it is clear that those not prepared and supported to engage will ultimately be put out of business.

To compete, manufacturers will not only need to be able to deliver and service smart, connected devices, but just as importantly, will need to adopt entirely new business models built around them.

Mr. Cameron’s vision for the UK is spot on.

But now we have to see what concrete steps he and his ministers take to begin forming reality from the vision.

Combining efforts with Germany to boost both countries’ fast-expanding IT industries certainly makes sense.

We believe that the emergence of innovative new applications to collect and analyze the vast volumes of data smart connected products will be generating is critical to Europe’s long-term competitiveness.

How much awareness/interest do you think there really is in the Internet of Things among SME manufacturers?

In only a few years’ time, the Internet of Things has taken on a life of its own.

There are various definitions for the IoT. McKinsey defines it synonymously with the “Industrial Internet,” and describes it as networks for low‐cost sensors and actuators for data collection, monitoring, decision making and process optimisation.

Gartner expands the definition to include things, people, places and systems. Whatever the definition, everyone agrees that the IoT will be one of the biggest stories with potentially one of the largest economic impacts as we move further into the 21st century.

So yes, I think most companies already realize the potential and are preparing themselves to take advantage of all potential business value at hand. Beyond being able to offer more proactive monitoring and services, entirely new business models are beginning to take shape.

Responsibility for maintaining products is shifting from the customer back to the manufacturer. Manufacturers are developing business models where the customer no longer buys or even leases the asset from the manufacturer. The customer pays for the uptime and use of the product while the manufacturer still holds and maintains the asset.

Many are sceptical about the IoT as another ‘next big thing’ in machine to machine technology which has been promised as a ‘revolution’ in manufacturing tech for years now. What’s different today?

Item-level RFID tags and smart ocean containers to revolutionise supply chain management were part of the Internet of Things one decade ago – and you are right, these never really happened, or at least not to the scale envisioned. It is also well known that the first generation of IoT failed, as companies didn’t know what to do with the vast amounts of data they were collecting.

One decade on, things are different. The technologies behind IoT are smaller, cheaper and more powerful than ever before – and getting more so every day. Unlike a decade ago, we’re all walking around with wireless computing devices in our pockets, making us another smart ‘thing’ on the network.

What is the biggest remaining technology obstacle to be overcome before we see Internet of Things achieve its full potential from an industrial point of view?

Standardization and compatibility, and security will be the biggest challenges to be worked through.

Which sectors are likely to take the biggest steps with Internet of Things first?

Health care, as well as public-sector services and city infrastructures will be among the first. Health care will see remote monitoring, for example, making a huge difference in the lives of people with chronic diseases while simultaneously attacking a significant source of rising health-care costs.

As our population continues to age, the advantages of home monitoring and remote doctoring will be enormous. Older adults being allowed to remain in their own homes, as opposed to being required to live in nursing facilities, will go a long way to increase personal happiness and satisfaction as well as play a significant role in reducing insurance costs, hospitalization costs, and rehabilitation costs.

Regarding infrastructures, the ability to monitor and control power grids and water systems could have major impacts on energy conservation, greenhouse gas emissions, and water loss. By using sensors to gather information to streamline operations, public-sector functions such as garbage collection can become much more productive. Sensor data could also be used to improve policing.

Will the internet of things change supply chain relationships and performance metrics?

The IoT will cause business model changes throughout the value chain. As programs begin to take shape, suppliers will be brought on board. New processes and business models will be required for suppliers to remain competitive.

ThingWorx was recently acquired by technology vendor PTC to add Internet of Things capability to its tech portfolio, in particular its Service Lifecycle Management solution. How exactly will ThingWorx help to differentiate that SLM offering and help manufacturers deliver advanced service solutions?

The idea is to transform service from being reactive to proactive by monitoring and predicting events via connected devices and sensors.

In addition to smart asset management, there is also an opportunity in avoiding one necessary step in a traditional service workflow, whereby a field technician wastes a trip by having to diagnose the problem first and then having to make a second trip with the necessary parts for the fix.

The ability to diagnose and fix the problem in one visit will be far more economical for both the vendor and the customer. Also, if a product is not connected and software enabled, it is more difficult to detect the problem and repair it.

There is also an opportunity here for sales and product managers to learn about the actual usage of products, so that they can effectively determine the best time for product upgrades and up‐sales.

For example, offering training services if remotely captured usage data indicates a decrease in usage that correlates with new or untrained operators.

How about customers or consumers never having to contact a call centre?

What if the manufacturer knows about or can predict product problems even before the customer?

Imagine being informed by the manufacturer about likely problems beforehand, rather than being frustrated by product downtime or failure.

With smart, connected products, supported by IoT applications, the kind that ThingWorx helps companies build, manufacturers and others can predict a service incident and pre-emptively correct it. The ‘Mayday’ button on Amazon Kindle, where a live service person is available on demand to talk to you, is a step in this direction.

Who needs to own the development of Internet of Things capability in manufacturing firms? IT departments? Engineering?

IT departments will need to own the capability, designing and building or buying applications that fit their company’s specific needs.

Once the applications are in place to accurately collect and analyse product and usage data, it will be fed to engineering to effectively improve designs before manufacture.

The PTC visions for how Internet of Things is transforming manufacturing is the topic of the opening keynote at the technology vendor’s global user conference in Boston in June. Look out for more news following the event.