The adoption of the Industrial IoT (IIoT) by manufacturers continues to accelerate, with Accenture forecasting that the IIoT could add $14.2 trillion to the global economy by 2030. This adoption is being driven by the fact that original equipment manufacturers (OEMs) increasingly realize that connected equipment generates more value than non-networked equipment for both their customers and themselves. This value is generated from OEMs using Industrial IoT connectivity not just to streamline operations and improve productivity, but also to launch new predictive maintenance services to improve customer experience and “equipment-as-a-service” business models to generate additional revenue streams.
However, using IIoT connectivity to improve business outcomes comes with several challenges, including understanding how to develop profitable new service business models that meet customer needs, forecasting the ROI of IIoT investments and scaling IIoT applications globally. Using wireless cellular connectivity and other solutions for IIoT applications can help OEMs address these challenges.
OEMs can use IIoT applications that connect to industrial equipment to launch a variety of new services that enhance the value they provide to their customers, generate insights and create new revenue streams. Examples of such services include:
• Predictive Maintenance – OEMs can use IIoT connectivity to collect and analyze operating data from their equipment in the field to understand when it will fail. This capability reduces equipment downtime and the need for on-site service calls.
• Pay-Per-Use Services – By using Industrial IoT connectivity to measure how much their equipment is used by their customers, OEMs can shift from selling products under CapEx business models to selling services under OpEx business models. For example, instead of selling aerospace engines as hardware, a manufacturer can offer “power by the hour” arrangements to their customers. Usage-based business models eliminate high up-front equipment costs for customers, while creating predictable, long-term, service-based revenues for OEMs.
• Data-Driven Decision Making – IIoT applications can analyze data from industrial equipment, generating insights that enable OEMs to configure their equipment to make it more productive, increasing throughput, reducing operating costs and delivering more value to their customers.
• Increasing ROI Through Better KPIs – OEMs can use IIoT applications to collect data from sensors embedded in their equipment to measure first time fix rates, uptime, mean time to repair and other KPIs. With these KPIs, OEMs can improve customer experiences while also better measuring the ROI of their predictive maintenance and other IIoT applications.
While OEMs can reap significant benefits from IIoT applications like the ones above, they have faced significant challenges in implementing the technology and process changes that will enable them to deploy, optimize and scale these applications. These challenges include:
• Transforming their business models to use IIoT applications to become more service-driven.
• Coping with the complexity involved in launching new IIoT applications, including developing or acquiring the many skills – network architecture, embedded design and development, telecommunications, cloud orchestration, cybersecurity, integration, end-to-end testing and system validation – needed to build and deploy these applications.
• Fully understanding how they can use equipment data to generate value for their customers and themselves.
• Securing IIoT application data, so it is protected from malicious internal or external cyberthreats.
• Correctly assessing IIoT application development, deployment and maintenance costs to make IIoT application ROI predictions accurate.
• Sourcing ubiquitous worldwide wireless coverage to ensure their IIoT applications can be scaled globally using the same end-to-end solution and architecture.
Given these challenges, it is no surprise that only 14 percent of the 1,600 C-level executives interviewed by Deloitte for the recent Industry 4.0 Readiness Report were highly confident that their organizations were ready to make the required technology and process changes.
Connectivity presents one of the most complex challenges of the IIoT. In many IIoT use cases, wired networking is not an option because industrial equipment is mobile or located in difficult-to-reach or space-constrained areas. Meanwhile, Wi-Fi, Bluetooth Low Energy and other wireless connectivity options can be expensive to maintain, have weak coverage or have security vulnerabilities. By contrast, wireless cellular is:
• Scalable – Cellular connections are designed to connect to the large numbers of devices used in complex industrial environments.
• Simple – Cellular modules can be directly connected to mobile network operator (MNO) networks, eliminating the need for companies to build or maintain their own local networks.
• Secure – All cellular networks include high-quality encryption.
• Stable – Cellular networks have been tested and used for decades. If configured correctly, they ensure equipment data will reach its destination.
• Future-proof – Cellular solutions based around standard 3GPP platforms offer a long-term growth path as companies move to 5G deployments.
• Flexible – Cellular can easily be combined with other common industrial connectivity technologies, including Wi-Fi and Bluetooth Low Energy, as needed.
• Ubiquitous – Used around the world, cellular connectivity is a global technology.
Sierra Wireless offers a range of IIoT connectivity solutions and services that help OEMs maximize the benefits of cellular connectivity and address the unique challenges of developing and deploying IIoT applications in demanding environments, including:
• Smart Connectivity – Sierra Wireless’ Smart Connectivity makes it easy to maintain a secure and reliable connection to both fixed and mobile machines and assets anywhere in the world, and is available through a Sierra Wireless SIM or an embedded SIM inside our Ready-to-Connect modules and gateways. It enables superior IoT performance by providing the best coverage, connecting to over 600 networks across 190+ countries. The result is resilient coverage anywhere in the world, less downtime, superior data connections and simple management all at a lower cost. With Smart Connectivity from Sierra Wireless, IoT devices do what they need to do, with the broadest possible coverage and the greatest degree of freedom.
• Enhanced Carrier Connectivity – Sierra Wireless’ Enhanced Carrier Connectivity for North America simplifies and optimizes your deployments in the US, Canada and Mexico with carrier SIMs and plans available on AT&T, T-Mobile, Verizon and Rogers networks. With our Enhanced Carrier Connectivity, on top of just the SIM and connectivity, you get optimized nationwide coverage, minimal service disruption and reduced operational costs.
The IIoT holds tremendous promise for OEMs. However, to realize this promise, OEMs must overcome several challenges, including IIoT application security, reliability and performance. However, using cellular connectivity and solutions from Sierra Wireless, OEMs can address these challenges, allowing them to launch IIoT applications that transform the way they do business and create more value for both customers and themselves. In future blog posts, we will look at how cellular connectivity and Sierra Wireless solutions can address the unique IIoT needs of OEMs building specific types of equipment, including industrial washing machines, air compressors and air and water treatment and filtration systems. We will also examine how leading OEMs, like MANN + HUMMEL, Atlas Copco and Girbau, have partnered with Sierra Wireless to launch IIoT applications to realize their digital transformation goals.
To learn more about IIoT connectivity, read the white paper, How to Get Industrial IoT Connectivity Right. Start with Sierra to help you reimagine how you can transform your business with the IIoT.
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