IoT being built into the product design, manufacturers adopting a more service-centric business model and 3D-printing reaching the tipping point of realising business benefits are three game-changing trends that ANTONY BOURNE at IFS outlines for 2018.
By the end of 2018 over 50 percent of manufacturers will be building IoT technology into the design phase of their products
When you think “IoT”, is your first thought newly affordable, available sensors being added to products after they’ve been manufactured? If it is, well I believe 2018 will change that perception as IoT takes a decisive step forward in its evolution. If we think of IoT as like a product’s nervous system, 2018 will see it grow from picking up signals at the periphery to being the brain of the product, constantly sending, receiving, growing and gathering information, from the centre of the product throughout its lifetime, in the process enabling new services and revenue streams. Manufacturing is one of the markets most heavily impacted by IoT today. According to Global Market Insights, IoT in the manufacturing market was valued at over US$ 20 billion in 2016 and will grow at more than 20 percent (CAGR estimate) from 2017 to 2024. Current IoT investments that are unique to the manufacturing environment are taking place in three major initiatives:
· Smart manufacturing to increase production output, product quality, or operations and workforce safety as well as lower resource consumption
· Connected products to impact product performance, including collecting detailed information on products in the field, remote diagnostics and remote maintenance
· Connected supply chains to increase visibility and coordination in the supply chain, tracking assets or inventory for more efficient supply chain execution
We will see IoT being included as a part of the design process in all three of these IoT initiatives. Manufacturers are realising that by engineering IoT technology into products and equipment already in the design process, they will be able monitor not only the equipment’s performance to predict when it needs repair, but also how and when it is being used—which provides game-changing competitive advantages!
By the end of 2018 more than 50 percent of manufacturers will be building IoT technology into their products from day one—already thinking forward in the design phase and asking themselves what services and revenue this product can generate throughout its lifetime.
In fact, where will our revenue be coming from in the next five years?’ It’s a good question. And it leads us to my next key prediction.
Servitisation speeds ahead: by 2020 most manufacturers will earn over half of their revenue from services
With the manufacturing industry becoming more and more commoditised, the need for companies to differentiate themselves is key to survival and profitability. We now see that a large number of manufacturers are shifting to a more service-centric business model—the buzz word is “servitisation”.
Servitisation is a way for a manufacturer to add capabilities to enhance its overall offering in addition to the product itself. One famous example is Apple, which did this a few years ago when it had gained the majority of market share with the iPod and introduced iTunes to increase loyalty, differentiate itself, and generate more revenue. You may think that it will never apply to your business, but companies are now reaping the benefits of servitisation across many different sub-segments. For example, Philips provides Schiphol airport outside Amsterdam with “lighting as a service”, which means that Schiphol pays for the light it uses, while Philips remains the owner of all fixtures and installations. Philips and its partner Cofely will be jointly responsible for the performance and durability of the system, and ultimately its re-use and recycling at end of life. This has resulted in a 50 percent reduction in electricity consumption without having to buy a lamp!
I see this development among IFS’s customers as well. For global furniture manufacturer Nowy Styl Group, servitisation has been crucial to its growth. In 2007, it announced “for us, chairs are not enough”, starting a transformation from pure manufacturer to world-class office interior consulting company. Another example is a customer that manufactures cleaning products and started to offer delivery and service dosing systems. The company understood that choosing the right cleaning products was just part of its customers’ main objective, i.e. keeping its premises hygienic. Applying the products in the most effective way, choosing the right accessories, establishing the right routines— all these too were crucial to keeping premises clean.
Both these customers realised that with technology accelerating as fast as it is, no matter how beautifully designed a chair, or how effective a cleaning product, today’s luxury products turn into tomorrow’s commodities faster than ever, pulling prices down with them. With servitisation, manufacturers escape the corrosion of commodification. Expert services built on years of experience provide a kind of value customers will always pay for, regardless of technology trends.
According to the IFS Digital Change Survey conducted by the research and publishing company Raconteur, 68 percent of manufacturing companies claim that servitisation is either “well-established and is already paying dividends” or “in progress and is receiving appropriate executive attention and support”. However, almost one in three manufacturing companies is still to derive value from servitisation. These are missing out on revenue streams and new ways to develop their offerings. To be successful in their response to customer needs and increasing demands, manufacturers must look to new business models to compress time to market, taking an idea through from design to a saleable item as quickly as possible.
New technology like IoT adds an additional layer to servitisation. With sensors detecting when your product or equipment needs service, this data can trigger an automated service action that will realise significant benefits to make your service organisation more effective. This type of automated predictive maintenance will become more and more common as it is a natural next step after implementing IoT to optimise service efforts.
By 2019 the hype around 3D printing will be over, and real benefits blooming
My third prediction is that 3D printing, just like IoT, will enter a new, more mature phase. No matter how big the ‘wow’ factor is when we first see it, apart from smaller-scale manufacturing production like hearing aids and jewelry, 3D printing has so far failed to live up to its full potential. All this could change in 2018.
We are seeing a couple of developments that point in that direction. The first one is the improved scalability of 3D printing solutions. A new generation of 3D printing companies is moving into manufacturing traditionally dominated by injection-molding manufacturers, with new, faster, better connected automated systems that reduce some of the time-consuming pre- and post-processing that has been such an obstacle to wide-scale uptake. One company, Stratasys, for example, has collaborated on a new printer, the Demonstrator, that combines three printers into a stack system—each printer able to communicate to its neighbors in real time. The new printer is highly scalable, meaning it can significantly increase production capacity, printing from 1,500–2,000 components a day. This means that you can achieve an economy of scale to bring costs down, which will be an important catalyst for the success of the 3D printing technology.
The aviation industry is pioneering 3D printing technology today, and the manufacturing industry can learn from that. One successful example is the new GE turboprop ATP Engine, which was 35 percent 3D printed, taking it down from 855 components to 12 and contributing toward the engine being lighter, more compact, and delivering a 15 percent lower fuel burn and 10 percent higher cruise power compared with competitors’ offerings.
The expanded capacity and reduction in pre- and post-processing that new, highly innovative mid-size 3D printing companies are bringing to the field, means that in 2018, we will see manufacturing companies joining in with A&D, and flying high with new 3D printing capabilities.
* Antony Bourne, Global Industry Director of Industrial and High-tech Manufacturing at IFS, outlines for 2018.
Small SA town goes smartphone-only
Vodacom partners with farming business to upgrade all residents of Wakkerstroom from 2G devices to smartphones
All residents of the small town of Wakkerstroom, which straddles Mpumalanga and kwaZulu-Natal provinces, have had their 2G feature phones upgraded to 3G devices.
The initiative is a result of Vodacom partnering with BPG Langfontein, a farming business that employs the majority of the people living in Wakkerstroom. It is now the first smartphone-only town in South Africa. This is a model the network provider says it hopes to replicate across the country as part of its mission to connect people who live in deep rural areas and are still dependent on 2G networks.
Wakkerstroom, is the second oldest town in Mpumalanga province, on the KwaZulu-Natal border, 27 km east of Volksrust and 56 km south-east of Amersfoort.
“There are growing expectations for big corporates the size of Vodacom to serve a social purpose, and for us to use our resources and core capabilities to make a significant contribution in transforming the lives of ordinary people,” says Zakhele Jiyane, Managing Executive for Vodacom Mpumalanga. “We are helping to remove communication barriers, so that citizens in the area can be part of the digital revolution and reap the associated benefits. By moving the more than 1400 farm workers from 2G to 3G devices, this will also free much needed spectrum and this spectrum can be re-farmed to provide for faster networks such as 3G and 4G.
“Crucially, the move opens a new world of connectivity for farm workers in Wakkerstroom. As a result, most people in the area will now be able to use the Vodacom network to connect on the net and access online government services, eHealth services such as Mum&Baby and eCommerce. Learners can now surf the internet for the first time and access Vodacom’s eSchool free of charge and those who are actively looking for jobs can start using their smartphones and tablets to apply for jobs over the internet on Vodacom’s zero-rated career sites. This will be key for driving growth to the benefit of people living in this area.”
Vodacom has already deployed 4G base stations in Wakkestroom as part of this initiative.
For the next phase of this project, says Vodacom, it is going to educate the farm workers about data and the benefits of the Internet. Vodacom will also look at various ways in which it can help empower members of this community in areas of education, gender-based violence and health.
Facebook fact-checking goes to 10 more African countries
Facebook today announced the expansion of its Third-Party Fact-Checking programme to 10 additional African countries, which now join Kenya, Nigeria, South Africa, Cameroon and Senegal in the project,
In partnership with Agence France-Presse (AFP), the France 24 Observers, Pesa Check and Dubawa, this programme forms part of its work in helping assess the accuracy and quality of news people find on Facebook, whilst reducing the spread of misinformation on its platform.
Working with a network of fact-checking organizations, certified by the non-partisan International Fact-Checking Network, third-party fact-checking will now be available in Ethiopia, Zambia, Somalia and Burkina Faso through AFP, Uganda and Tanzania through both Pesa Check and AFP, Democratic Republic of Congo and Cote d’Ivoire through the France 24 Observers and AFP, Guinea Conakry through the France 24 Observers, and Ghana through Dubawa.
Feedback from the Facebook community is one of many signals Facebook uses to raise potentially false stories to fact-checkers for review. Local articles will be fact-checked alongside the verification of photos and videos. If one of our fact-checking partners identifies a story as false, Facebook will show it lower in News Feed, significantly reducing its distribution.
Kojo Boakye, Facebook Head of Public Policy, Africa, said: “The expansion of third-party fact-checking to now cover 15 countries in a little over a year shows firsthand our commitment and dedication to the continent, alongside our recent local language expansion as part of this programme. Taking steps to help tackle false news on Facebook is a responsibility we take seriously, we know misinformation is a problem, and these are important steps in continuing to address this issue. We know that third-party fact-checking alone is not the solution, it is one of many initiatives and programmes we are investing in to help to improve the quality of information people see on Facebook. While we’ve made great progress, we will keep investing to ensure Facebook remains a place for all ideas, but not for the spread of false news.”
When third-party fact-checkers fact-check a news story, Facebook will show these in Related Articles immediately below the story in News Feed. Page Admins and people on Facebook will also receive notifications if they try to share a story or have shared one in the past that’s been determined to be false, empowering people to decide for themselves what to read, trust, and share.
Providing fact-checking in English and French across eight countries, Phil Chetwynd, AFP Global News Director said: “AFP is delighted to be expanding its fact-checking project with Facebook. We are known for the high quality of our journalism from across Africa and we will be leveraging our unparalleled network of bureaus and journalists on the continent to combat misinformation.”
Eric Mugendi, Managing Editor from Pesa Check who will provide fact-checking services in Swahili and English added: “Social networks like Facebook haven’t just changed how Africans consume the news. Social media is often the primary access to digital content or the ‘Internet’ for many Africans. They shape our perceptions of the world, our public discourse, and how we interact with public figures. This project helps us dramatically expand our fact-checking to debunk claims that could otherwise cause real-world harm. The project helps us respond more quickly and directly. We’re seeing real positive results in our interactions with both publishers and the public itself. The project also helps our fact-checks reach a far larger audience than we would otherwise. This has helped us better understand the information vacuum and other viral dynamics that drive the spread of false information in Africa. Our growing impact is a small but tangible contribution to better informed societies in Africa.”
Caroline Anipah, Programme Officer, Dubawa (Ghana) said: “Dubawa is excited to be in Ghana where the misinformation and disinformation have become widespread as a result of technological advancement and increasing internet penetration. Dubawa intends to raise the quality of information available to the public with the ultimate aim of curbing the spread of misinformation and disinformation and promoting good governance and accountability.”
Derek Thomson, editor-in-chief of the France 24 Observers, said: “Our African users are constantly sending us questionable images and messages they’ve received via social media, asking us ‘Is this true? Can you check it?’ It’s our responsibility as fact-checking journalists to verify the information that’s circulating, and get the truth back out there. Participating in the Facebook programme helps ensure that our fact-checks are reaching the people who shared the false news in the first place.”