Smart And Connected Products03/04/2016
Smart, Connected products: Transforming Company Competition and Customer Relationships
Experts have already stated their prediction about the possibility of massive increase of ‘things’ connected to Internet. According to them, through the end of the decade, there will be a massive trend of IoT (internet of things). While others predicted that “internet of things” will produce trillion of dollars on its over-all economic value for the next 10 years which is around 10x as much as the economic value that might be created by the 3 dimensional printing, another innovative trend.
Although the things connected to the internet are gradually increasing, it is still the products nature or the “things” in IoT which is driving the innovation. The internet only acts as a mere tool to boost the worth of smart, connected products. Such products, from industrial equipment to home appliances shares 3 core components: Physical components, Smart components and connectivity components.
Physical Components- This includes the product’s electrical and mechanical parts. For example, a vehicle’s physical components include tires, block and batteries.
Smart Components- This may include microprocessors, controls, software, sensors, improved user interface and embedded OS. For a vehicle, these components refer to the anti-lock braking system, engine control, rain-sensing windshield and many more. Oftentimes, product’s hardware components are replaced with software to enable a physical device to do numerous tasks at variety of degree.
Connectivity- This includes antennae, protocols and ports which enable wireless or wired connection. Generally, connectivity comes in three different forms. It can be a one-to-one connection wherein the product connects to another product, manufacturer or user through an interface such as port or one-to-many wherein the central system is constantly connected to numerous products. Lastly is its many-to-many connectivity wherein multiple products tend to connect to numerous kinds of products.
Primarily, product’s smart components boost the capabilities and value of its physical components. Subsequently, connectivity boosts the capabilities and value of those smart components. When combined, smart and connectivity creates products which enable upright succession of innovation.
The development of products into smart, connected devices- that are gradually embedded in a wider system- is drastically reshaping competition as well as companies. This provides exponentially escalating opportunities for greater reliability, new functionality, higher product usage as well as capabilities which exceed and cut across traditional product margins. The ever-changing nature of market products also disrupts value chains, thus forcing companies to retool and rethink almost everything in the internal process.
Smart, connected products primarily change the industry structure as well as the competition and even customers relationships, bringing companies into higher degree of competition and threats. But with right strategies, it can also open a greater and bigger industry opportunities. This creates a whole new industry while reshaping industry boundaries.
Because of this, companies now need to integrate a new technology infrastructure that can accommodate such big changes. It may consist of “technology stack” which includes innovative hardware, OS embedded on the product, software applications, network communications, product cloud to store product date, platform for creating new software applications, analytics platform and rules engines. It may also consist of smart applications separated from the product.
Technology stack does not just allow fast development of product applications, swift operation but also speed up the gathering, analysis as well as sharing of potentially massive amounts of data generated in and out the products, most of which may not be available before. Developing and integrating technology stack to accommodate smart, connected products needs a whole new range of specialized skills as well as substantial investment. All of which are currently rarely found in the manufacturing industry.
Capabilities of Smart, Connected Products
Intelligence as well as connectivity is leading into a whole new set of capabilities and functions of such innovative products, all of which can be summarized and divided into four core areas namely: autonomy, optimization, control and monitoring. Each is valuable on its own and bring everything one step higher.
Monitoring- Smart, connected products has the power to monitor a product’s external environment, operation and conditions through external data and sensors. Through using data, products can alert concerned individuals regarding the changes of its performance and in circumstances. Monitoring also enables customers and companies to track their product’s history and operating characteristics, allowing them to better understand the way the product is used. This information has significant implications for market segmentation, design and the after-sale service. Monitoring data can also expose issues regarding warranty compliance as well as sale opportunities.
Control- Intelligent and connected products are usually controlled by the device’s built-in algorithms or remote commands. Algorithms refer to rules which direct a product to answer back to particular changes in its environment or condition. Smart, connected products can also be controlled through the use of software embedded on the cloud or the product. This enables customization of the product’s performance to a certain degree which was previously not cost-effective or even possible. Similar technology allows users to personalize and control interaction with products in numerous different new ways.
Optimization- The massive amount of precise data from smart, connected product’s monitoring capability combined with its control capability enables manufacturers to augment product’s performance in several ways. The real-time monitoring capabilities as well as the control capabilities allows companies to optimize their services through executing immediate preventive maintenance at times of failure while completing repairs remotely.
Autonomy- When all the mentioned capabilities are combined, it will enable smart, connected products to accomplish a certain degree of autonomy which may have been previously impossible. Autonomy can now eradicate the need for product operators while improving product’s safety in hazardous environments as well as manage operations even on remote locations. Smart, connected products can also act in synergy with other system and products. And considering the dramatic growth of products getting connected, the value of autonomy capabilities may still grow exponentially.
Generally, smart, connected products open a new era in the manufacturing industry- an era that embodies greater not only business opportunities but also greater threats and fiercer business competition. Despite of this, smart connected products are transforming manufacturing industry as well as customer relationships in a positive and innovative manner.