The next industrial revolution is upon us, as Industry 4.0 brings in a new wave of connected manufacturers and smart factories. Industry 4.0 is a current trend in manufacturing that involves a combination of cyber-physical systems, automation and the Internet of Things (IoT), which together create a smart factory. It is the fourth Industrial Revolution, following in the footsteps of computers and the internet (Industry 3.0), mass production and electricity (Industry 2.0) and mechanization and water/steam power (Industry 1.0). Industry 4.0 manufacturers worldwide are connecting their machines to the cloud and developing their very own industrial Internet of Things (IIoT). In doing so, they are scratching the surface of untapped potential, which promises exponential growth and enormous scalability for their business.
As a provider of cloud-based field service and workforce management software, I experience firsthand the effect that Industry 4.0 has on our customers in the manufacturing industry. In order to perform maintenance and repairs on connected machines, technicians must offer a level of technical expertise, in addition to their foundational mechanical knowledge, in order to keep up with the accelerated service demand that comes with IoT connectivity. Because of this, manufacturing customers turn to our crowd service model to alleviate the pressure that comes with servicing IoT devices.
Digitizing manufacturing processes is not as simple as connecting devices to Wi-Fi. For one, the manufacturing industry is historically known for a mechanical marriage of oil and steel to make moving metal parts -- not so much cloud computing nor cyber-physical systems. With that, a manufacturing organization’s upgrade to Industry 4.0 can require a full-fledged paradigm shift -- from factory floor workers to C-suite decision-makers -- to instill organizational change and company-wide rethinking of existing processes. While machine-to-machine and human-to-machine connectivity are the paramount focuses of Industry 4.0, the true underlying benefit of Industry 4.0 resides in the machine-to-business connectivity, which we call “machine-as-a-service.”
While there is a wealth of “-as-a-service” buzzwords already in the technology realm today, machine-as-a-service encompasses a manufacturing machine’s contributions to business goals through Industry 4.0 connectivity. Today’s enterprises look past the speeds and feeds of machine equipment and rather focus on how said equipment drives business revenue. For example, companies no longer purchase manufacturing equipment in a one-and-done payment for the nuts and bolts. Instead, they negotiate the key performance indicators (KPIs) of the equipment in advance and then partially finance the payment based on the machine’s output. In essence, they do not just purchase the machine, but they also purchase a “subscription” to ensure that machine continues to drive and enhance the business, hence machine-as-a-service.
Service life cycle management is a key component of this model, as connected equipment requires maintenance on a more regular basis. However, service is no longer limited to equipment maintenance and repair -- service also entails software updates with enhanced features that enable your connected machine to support larger business goals, such as sales efforts.
Historically, customer touch points have revolved around the product themselves. For example, touch points would start from the purchase of the product, continue through setup with account setup and other related processes and then trickle off with the occasional service request under the warranty. With the onset of the IoT, the “trickle” of the third stage is extended through continued software updates until the true end-of-life of the product. In order to make the most of that extension, businesses can incorporate upsell and expansion opportunities within the regular software updates, which in turn results in a more scalable product with a longer shelf life that continues to drive revenue.
Given the historical pedigree of the manufacturing industry, Industry 4.0 adoption will not be an overnight transformation. However, manufacturers today are partnering with service platforms and providers as a catalyst to achieve digital transformation. There will be a shift from the journeyman engineers who are good with their hands to the service technicians who use digitally available information to bridge the skills gap and open new business channels -- in not only maintenance and repair but also new business and sales.
Ultimately, the customer always comes first, and Industry 4.0 is one step closer to achieving the pinnacle of customer satisfaction through this machine-as-a-service philosophy. Digital transformation is not just limited to machine connectivity -- it involves a comprehensive approach, from product to service to sales, to achieve greater stability and adaptability business-wide. Indeed, an integrated approach is key to implementing widespread adoption of Industry 4.0, setting the foundation for the next industrial revolution.