IoT

There are many reasons for digitalizing your products, services, machines, and business models. What are YOUR reasons? Let’s put it this way: Your reasons are our reasons, because we’re your customer!

And as your customer, this is what we want:

• To buy products that continue to develop
• To buy products that fit in seamlessly in our house, our factory, our environment
• To rent machines, since our aim is not to own an ax but to fell a tree
• To use, network, and control machines without having to be on-site all the time
• To be informed about the progress of purchased services
• To have the impression that the digital world corresponds to our real world

Do you feel the same as a customer? If so, then the reasons for digitalizing your company are clear! If not, then we’ll help you to see things from your customers’ point of view. Here, the same applies to us all: We can only be successful if we offer our customers what they want and need.

Customer in the focus of digitalization. Source: Own representation

Digitalization means placing customers at the center of the business model. Value creation takes place when their needs are taken seriously. And this means not only when they make orders via your Website but also when they use your services, products, and machines after they’ve been sold. The IoT is the next step in the digitalization process, and it allows precisely this.

Join us on a journey of discovery and knowledge acquisition: What is the IoT? Where is the IoT? How can I digitalize my company with the IoT?

What is the Internet of Things?

The term “IoT” encompasses everything to do with the communication of “things” with each other. Because in the digital world, we have completely new opportunities:

• We can access information without being on-site.
• We can make custom transactions without being on-site.
• Machines can be optimized by the monitoring of processes.
• The production quality rises due to the improved exchange of information.
• Components with faults are noticed before they can cause damage. Predictive maintenance is a key term here, and you’ve surely been aware of it for years.
• Software updates allow your customers to participate in the latest developments, even for products that have already been delivered.

And why is this?

In the digital world, many things that are really difficult, inefficient, or simply not possible in the physical world are much easier:

• Fast and efficient communication between sensors & actuators
• Computing, networks, and data stores that are becoming more cost-effective and more energy-efficient
• Increasing degree of networking in society and industry

If, with this knowledge, we’re asked for a definition of the IoT, we might answer similarly to the German Federal Ministry for Economic Affairs and Energy:

“With the Internet of Things, objects […] become intelligent due to programmability, storage capacities, sensors, and communication functions. For example, […] machine tools are controlled and […] networked […] using software.”

A bit vague? Not at all! Because each company must find out for itself what the IoT means. And that’s some job! But: The IoT is an enabler. How you use it is what distinguishes you from your competitors. Before we take a look at specific IoT application examples, let’s address the question of why now is precisely the right time for the IoT.

Why the IoT is constantly growing

Regardless of which curve you look at: The costs for the infrastructure of digitalization – processors, storage devices, bandwidth – are halved on a regular basis and/or you get more and more in exchange for your investment. This also applies to:

• Prices of sensors and actuators
• Sensor dimensions
• Energy consumption of sensors and other digital components
• The cost of energy storage systems

Decreasing average costs of IoT sensors. Source: The Atlas

This change is giving rise to diverse developments:

• Applications that were previously too bulky can now be realized elegantly. The most common example of this is the smartphone.
• Increasingly efficient sensors (and batteries with a higher capacity) are more and more cost-effective and can be used in ways that were not previously possible.

Small conveniences gradually make life, production, work, and placing orders easier:

• Changing the route for collecting dumpsters on the basis of how full they are? In some cases, this is already reality.
• Quality checks using smart cameras are becoming standard.
• Digital price displays in supermarkets are now feasible – once they were too expensive and not economically viable. Today, they enable completely new pricing strategies. Read for yourself how it will soon be possible to save up to 50% on food waste thanks to dynamic price labels.

This exponential development means that we have to constantly rethink – but why now, exactly? Because we need to make up some ground, and because together we can integrate our customers into production, the supply chain, and the value creation process in an even better way.

The definition of Industry 4.0 has been advanced by government-supported projects and work groups. Accordingly, descriptions and examples can be found on the Web pages of the German Federal Ministry for Economic Affairs and Energy.

The 2030 vision for Industry 4.0. Source: © Plattform Industrie 4.0

Particularly in Germany, the term Industry 4.0 (see Plattform Industrie 4.0) has attained a great significance.

In these parts, small and medium-sized businesses are especially relevant: Tailored production departments that are optimized down to a detailed level, sophisticated logistics, and seamless communication. We’re perfectly honed – and our products are perfect, too. We’re both innovative and cost-effective.

Actually, we could spend much longer talking about why Germany’s small and medium-sized businesses have made the country so successful. We must never forget why this is the case. But: We should also orient ourselves towards development in the new world. If we take a look at the US companies Amazon, Facebook, Google, Microsoft, Uber, Lyft, Airbnb and more, one thing’s clear: Business models are used there that we do not yet benefit from. Why not? How about having a kind of Amazon for our products and services? What if end-users could inspect and configure our machines via Facebook? Can I display location-specific information on my tablet in a production hall? Can I take this information into account when searching for spare parts? And can the necessary security aspects be given due consideration?

There are many successful examples of Industry 4.0 applications. What’s important is that instead of allowing ourselves to be swamped by the digital world, we learn to swim as quickly as possible:

• Learning what Industry 4.0 means for us, today and tomorrow.
• Learning what our business partners expect from us, today and tomorrow.
• Implementing, adjusting, driving things forward.

The difference between IoT and Industry 4.0

Are you designing use cases or thinking about new possibilities already? Often, what’s already commonplace overseas can take a little while to reach Germany. You might think that’s for the best – things reach us when they’re already mature solutions. But did you know that Hasso Plattner (the founder of SAP) is a big fan and exponent of design thinking – and has been teaching the concept at an institute founded in the US for almost 15 years? The learning process never comes to an end! But let’s start at the beginning…

The added value of use cases

Do you know the IoT use cases used in your sector? They’re easy enough to find out. There’s plenty of reading material available. However, “easy to find out” is not something that’s going to set you apart from the competition. The fact is that you have the information and understand the contexts that make you unique. And that’s why you’re successful.

But how can you use your knowledge for Industry 4.0 technologies and the IoT? That’s success factor no. 1: Combining your knowledge and experience with new technologies and concepts.

The design thinking method

We use tried-and-tested and new methods here. Design thinking is a method that’s grown particularly close to our hearts. However, it always comes down to the challenge, to you and the problem you face. In workshops, we’ll find out together which customer benefits you can extract from the IoT. We’ll find out how you can pick up modern, digitalized customers – in their physical and digital worlds. You’ll be amazed at the opportunities waiting for you.

Even if you cannot set yourself apart from your competitors with use cases, there’s no reason not to be aware of them. On the contrary: It’s your duty to get to know the usual use cases (application scenarios) and to understand how these new technologies can be used and what this requires. Below, we list some of the best known, most frequently used usage cases in German small and medium-sized companies at present:

IoT use cases

• Provision of sensor data for customers. The customer can track their package, check the state of their machine, or re-order resources that are running low, for example.
• Condition monitoring. Machines are monitored with sensors and processes can be modeled and optimized. Devices that have been delivered to customers can be checked to make sure that they’re being used as intended.
• Predictive maintenance. Sensors on wearing parts can be used to monitor their condition and, via machine learning, for example, to predict when a machine is going to fail. Spare parts can be ordered ahead of time before a failure occurs.

These and many other application scenarios with a detailed description from a technological point of view can be found in our full portfolio.

But what’s awaiting you when you implement a project driven by the IoT and/or Industry 4.0? The next paragraph answers this question.

Imagine that your company has, until now, been really successful at manufacturing machines. You’re the only manufacturer in the market. Despite this, you encounter a stroke of bad luck: Your competitor appears to be doing well with the “Rent instead of selling” business model. You do rent out your machines, but this business area only makes up a small part of your turnover, and an even smaller part of your profit. Why is this?

Digital Twin.
Source: Own representation

Naturally, you’ve been keeping an eye on the IoT and Industry 4.0 for a while, since these technologies enable new business models. Perhaps “Rent instead of selling” is part of that. The insight that a digital twin (see figure) provides can play an important role on the path to success. Even if the hype about digital twins sometimes seems over-the-top, the simplicity of the “twin” analogy is irresistible. Because even without spending too much time grappling with the topic, you can quickly start to see parallels and to enhance your business model with new digital services.

To find out more, you commission a service provider such as Novatec so that you can deepen your knowledge at a design thinking workshop. During this four-day workshop, all relevant topics are addressed and we scrutinize what’s been achieved so far. Lots of different scenarios are discussed and outlined. And one thing becomes clear: Your future market is the renting out of low-maintenance machines. The hypothesis: Your customers don’t want to own your machines; they just want to be able to use them optimally. Because if your machine’s at a standstill, so is your customer’s production department.

Alternatively, you can dive right in and take up our offer of a digital twin in order to throw some light on focused usage opportunities. The concept: High machine availability should be achieved through a diverse range of sensors (vibration sensors, temperature sensors, pressure sensors, distance sensors, and humidity sensors) that capture data that can subsequently be used to calculate the condition of the machine. Your consultants are convinced that this data – processed using neural networks (machine learning) – can provide the information you require. Maintenance runs can be scheduled at the right times and defective wearing parts can be exchanged in advance, before the machine actually fails.

In the next step, a prototype (MVP – minimum viable product) is created. This might be a decommissioned machine that’s fitted with sensors that forward data to a powerful computer via a Kunbus RevPi. With WiFi, this is no problem at all. Experts in data science (to be precise: machine learning) have already created models that can be used to calculate the condition of the machine. However, these models work only once they’ve been trained with real data. This means that you have to run through and record a large number of scenarios – both scenarios with an optimum machine condition and scenarios where the machine shows signs of failure or where a failure is imminent. In the latter case, the sensors transmit significantly different signals. This might result from a component starting to vibrate, the temperature of a joint increasing, or the distances between machine parts changing.

Afterwards, the machine learning model is able to tell whether a machine is behaving normally or whether a failure is imminent. In time, you’ll even be able to predict what type of maintenance will need to be carried out. Soon, you’ll have enough data to actually improve the machine itself, which will mean fewer servicing runs. But first, you need to test your machine, gain some confidence, and confirm your hypothesis.

Once you’ve proven that you can protect machines that are equipped with sensors from downtimes by means of predictive maintenance, it’s time to get designing:

• The right business models for your customers. Perhaps they want 100% availability through minimizing the risk of machine downtime. In addition, customer surveys provide you with the certainty that you’re thinking in the right direction.
• The industry-grade use of sensors embedded in neural networks: The interpretation of the data can now take place on the machine itself or in a controlled environment. Which of these is easiest to implement depends on the sensitivity of the data. In all cases, the machine must be able to communicate with you.
• Your reference architecture. In an initial step, this can be really simple, but it should already contain the most important components. Depending on which platforms, providers, and products you’re using, you may be able to build upon existing reference architectures.

Note: As well as using the data generated by the machine to order service technician deployments, use it to make the machine itself even better. You’ll now get daily feedback and be able to draw conclusions from it. You might also like to rethink your business model. The IoT and Industry 4.0 will give you a massive advantage when it comes to possibilities for marketing and improving your product.

You can approach the topics of the IoT or Industry 4.0 from different perspectives:

• Take a look at use cases and think about which parts of them you might implement in your company.
• Use your specific knowledge and transform it into valuable new products, services, and business models with design thinking.
• Reference architectures offer a natural introduction to the topic. Start by testing out a reference architecture that fits in with your state of knowledge and your company.
• Remember: Networks will get faster and faster, sensors will get smaller, computing power will increase, batteries will have extra capacity, and actuators will become ever more powerful! In addition, these things will get cheaper and cheaper year after year.

Don’t simply react – play an active part! The Internet of Things forms the basis upon which further achievements will build. Become a visionary:

• Let your appliances order goods themselves. Distributed ledger technology (DLT, e.g. Blockchain) safeguards the transactions.
• Machine learning, data science – there are many names. And behind them are the tools that can help you to become a gold miner. There are numerous possibilities to benefit from data generated by machines – for customers, and for you.
• Cloud technology allows you to be flexible without having to make a large investment. Take small steps forward, make daily tests, and adjust your direction each day, too. This is important, since it’s the only way that you can add further precision to the decisions that need to be made each day.

Naturally, as an IoT service provider and consultant, we’ll be there to help you:

• Method and software-independent
• An agile, target-oriented way of working
• Professional activity with daily investment in new technologies

Have faith in yourself. The journey into the age of distributed intelligence and networked devices has just begun!