Part 3 in the 4-part series “Opportunities for Digital Manufacturing“
Not long ago, I spoke to the head of a large life-safety organization about the prospect of building a proactive service-delivery model. Many applications, from Internet browsers to iPhone apps, request users’ permission to send data remotely—giving developers first-hand insights into the user experience as well as the ability to troubleshoot issues quickly. But such proactive service models have also become incorporated into some physical goods. For example, a computer hardware vendor may reach out to the consumer to replace parts when it remotely detected a potential failure.
The executive I was speaking with, however, believed that, unlike in electronics or computer software, competitors in her industry were a long way from producing digitally connected life-safety products. As a result, she did not consider innovation on this front a pressing action item.
Companies that enjoy significant market power are sometimes tempted to take the stance of not fixing what isn’t broken. But, as Blockbuster demonstrated when it sealed its fate by ignoring the opportunity of online movie rental, such a position is ultimately untenable.
In the past, the concept of sensors to stay connected and collect data in real time was limited to heavy engineering products including computers, automobiles, and power generators. But in recent years, embedded sensor technology has become affordable, reliable, and secure—making it fit for use across a wide range of products. There is an obvious opportunity for companies that install and service their products at customer sites.
Consider producers of building sprinklers and fire safety systems. Fire safety codes in every state require inspection and certification that these systems will work as expected in the event of a fire. As you probably can verify in your workplace, most sprinkler and fire detection devices are not remotely connected, so companies employ armies of inspectors to test them on site. Not only is this a huge operational cost, but in many cases, companies deal with overdue preventive maintenance, causing customer attrition and revenue leakage.
Producing smart fire-safety devices would cut through these costs. And given the state of the industry and the benefits such technologies bring in terms of customer satisfaction, becoming one of the first companies to make the switch could be essential for establishing market power. As it stands, around 40% to 50% of the installed base is handled by local service providers, so seeking out such opportunities for differentiation should be a priority for larger producers. Building remote servicing capabilities essentially raises an invisible fence that prevents outsiders from servicing the producing firm’s product. Given the availability of sensor technology at an affordable cost, the case for making the switch is overwhelmingly strong.
The final blog in this series will look at how to leverage emerging technologies, and the role of leaders in digital transformation.
For more on digital transformation in manufacturing, see Digitalization, Industry 4.0, And The Future Of Industrial Production.