The Internet of Services in Industry 4.0

By Mikes James, Chairman, MESA International Board of Directors

Internet A Series Of Tubes by Jeremy Brooks (CC BY-NC 2.0)

In the fourth blog post of this series, we explore how the internet of services fits with smart manufacturing. There is much talk about the Internet of Things (IoT). However, ‘things’ are just part of the plumbing. We connect devices, giving them, no more than, nominal intelligence. The real innovation is the internet of services. Manufacturers need to think through their business model: how can a product become a service with a long-term revenue stream?

Many manufacturers are recognizing and exploiting the opportunity. For example, Tesla is delivering vehicles with hardware and software which can be upgraded, their cars are sensor ready and software upgrades will provide extra intelligence, delivered via the internet. The customer could pay for the upgrades which then generates extra revenue for Tesla.

Otis is supplying elevators/lifts with sensors which send data into their cloud. The data is analyzed and Otis sells a predictive maintenance services package, again adding a long-term revenue stream.

Additionally, a new catering company in The Netherlands is supplying custom meals to hospitals. Each meal is prepared for the patient based upon data received from the hospital about the patient’s needs. The meals are prepared in an automated plant.

The individualization of mass production and the internet of services add additional revenue. The smart manufacturing plant needs to be flexible and deliver intelligent products. A major misunderstanding is that this is not a cost saving exercise; it’s a new business model to increase revenue and profitability.

It’s important to map out opportunities and match them against the realities of today’s technology. A manufacturer who was heavily investing in a factory of the future did not build this type of strategy. Enthusiastic engineers ordered additive manufacturing machines (3D printing) only to find out they could not connect them to their network using international standards. They paid a heavy price for this error and damaged the initiative’s reputation. It’s worth taking independent advice before completing your new manufacturing strategy.

The best way to avoid these mistakes and build a successful strategy is to learn from other manufacturers in a safe space. MESA is a safe harbor to share best practices and lessons learned so that the industry can collectively rise to Industry 4.0.

Join MESA’s working groups to share with and learn from industry peers and attend MESA’s Fix Event at the North American Conference this May in Cleveland, Ohio. This event is unlike any other in that you can bring questions about what you are trying to fix or what you think might need to be fixed in the future and get answers from MESA experts.  We hope to see you there!