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IoT changes manufacturing

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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.

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Showmax launches in Nigeria

Basketmouth and Bovi are the hosts of an exclusive Big Brother Naija recap show, Big Brother Naija Hot Room, as Showmax launches in Nigeria.

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Showmax has launched its video-on-demand service in Nigeria. The video streaming service features a dedicated slate of Nigerian TV shows and movies, international hit series, Hollywood blockbusters, and a Big Brother Naija partnership with live streaming and exclusive new BBNaija shows.

The launch brings two important firsts: the first time a wide range of popular Nigerian series can be binged from the beginning, and a partnership with Big Brother Naija featuring live streaming of the Sunday night evictions as well as two new BBNaija shows that are exclusive to Showmax. One of the new shows will be hosted by comedians Basketmouth and Bovi, who will provide commentary on happenings in the Big Brother Naija house.

“We’re aiming for the sweet spot that other services may have missed,” says Niclas Ekdahl, CEO of MultiChoice Group’s Connected Video division. “Taking a generic service and tacking on a few Nollywood movies won’t cut it, so we’re coming in with a strong mix of bang up-to-date Nigerian shows, international hits and favourites from across Africa, and now, as something completely new: on-demand and live Big Brother Naija content.”

Showmax will live-stream all Sunday eviction episodes of Big Brother Naija as well as the finale, and recordings of the nomination shows will be posted on Tuesdays. In addition to this, two brand-new shows, exclusive to Showmax, have been produced. Big Brother Naija Extra View is a 25-minute compilation of unseen footage and will be added to the site daily from Tuesday to Saturday. Big Brother Naija Hot Room is a 25-minute satirical commentary on the week’s main drama and action, hosted by legendary comedians Basketmouth and Bovi, with new episodes coming every Sunday evening ahead of the evictions.

The following shows will be added daily, as they air on Africa Magic channels, with all past episodes available to binge from the beginning:

– Tinsel, one of Nigeria’s longest running TV series and Africa Magic Viewers Choice Best Drama 2017

– The Johnsons, featuring City People Award winners Olumide Oworu and Charles Inojie

– My Flatmates, starring 2018 Savanna Pan-African Comic of the Year Basketmouth

The new Showmax service will feature hundreds of Nollywood movies and thousands of TV show episodes and Bollywood shows. Telenovelas will also be part of the lineup, as will hits from the rest of Africa like Kenya’s Supa Modo, winner of 50 international awards, and South Africa’s big Africa Movie Academy Awards winner Five Fingers For Marseilles

The lineup of international shows on the new service includes ChernobylVikingsPowerGame of ThronesTrue Detective (starring Mahershala Ali), InsecureBillions, Ballers, and Luther (starring Nigerian BAFTA winner Wunmi Mosaku opposite Idris Elba). The latest episodes of Big Little Lies are added weekly.

There’s also a major focus on kids, with shows like Paw PatrolPJ Masks, and Doc McStuffins.

To get Showmax, visit www.showmax.com. Showmax has a risk-free trial: once signed up, cancel within the first 14 days and pay nothing. Once the 14-day free trial is over, the cost is N2,900 per month.

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Want a competitive edge? Unlock your business data

By Dr YUDHVIR SEETHARAM, head of analytics, insights and research for FNB Business

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The businesses which will be able to count themselves amongst the most successful in the coming years will be those that have succeeded in fully harnessing the power of data. But while you’d be hard pressed to find many businesses that are not currently building or acquiring systems and technical resources aimed at unlocking the value of data, the same priority does not appear to have been given to embedding data-driven organisational cultures.

This failure to focus on culture in parallel with technology not only reveals a lack of understanding of the symbiotic nature of the relationship between the two, but also presents a real risk that the massive investments being made into data might not deliver the returns that companies are hoping for.

The problem lies in the fact that while data analytics and processing are relatively exact sciences, a data-driven culture is significantly more difficult to define. So while company owners, managers and executives may not be able to tell you exactly how data analysis works, they can tell you what they want to get out of it. The same isn’t true of their understanding of a data-driven culture, and so the creation of such a culture is either assigned a lower strategic priority, or simply handed off to the organisation’s Chief Technology Officer, Chief Data Officer or HR executive.

This approach is very unlikely to unlock the full value of being data driven. To do that, every person in the organisation has to recognise the importance of being fully data-driven as a competitive differentiator and embrace the need to build a data-driven culture within that organisation.

This is by no means a small ask. Apart from the significant challenges – both technical and human – that a business is bound to face en route to becoming truly data-driven, it’s likely that every person in a company has little to no idea of what the concept of ‘culture’ actually means in a company, let alone what a data-driven culture looks or feels like.

And that’s why the process of transforming a culture to be data driven must begin with the end in mind. That, of course, begs the question: What is a data-driven culture? Unfortunately, there is no simple answer as every business is different and will have different culture parameters. However, it is relatively safe to say that, irrespective of how businesses look or work, their data-driven cultures will have a few things in common.

For one, a data-driven culture will be built on the broad recognition of data as a vital, strategically essential business asset; one that allows the business to make well-considered decisions based on facts and figures rather than on intuition or past experience. Having a data-driven culture will also mean that the business fully recognises and embraces the ability of data and its application to empower all employees to perform their functions much more effectively. And lastly, a business will know that it has completed its transformation to a data-driven culture when it is able to identify and align its technical and business challenges and leverage data to solve both together.

When you consider these factors as characteristics of a data-driven culture, it becomes obvious that being data-driven is not solely a technical strategy. So, while it is important to recruit skilled and talented data scientists and technology professionals to give physical effect to the data-driven vision, trying to become data-driven in isolation from the business and all its other employees is almost certainly a recipe for failure. Which brings me to the second obvious question that will, or at least should, be asked by every business that wants to be able to unlock the full potential of data as a transformative, business building asset. And that is: How do we do it?

This, too, is a simple question without a simple answer. Most of the global organisations that are considered to have succeeded in becoming data driven still admit to being in the learning phase when it comes to embedding a data-driven culture. FNB is no exception. But we remain committed to the process and, I believe, have gained some valuable insights into the steps that businesses, and especially financial services organisations, need to take to move closer towards achieving a data-driven culture.

The first of these is to start by transforming thinking. You need to get the entire leadership body to commit to supporting and promoting a data-driven culture. Even if very few of them understand what that means, a good first step is to simply get board and executive management agreement to being willing to embrace a culture of openness and collaboration.

Then, with that leadership support, start to communicate with the entire organisation to create an understanding of the meaning and value of being data driven, both for the company and its employees and customers. Ultimately, any shift in culture is only possible when culture is mainstreamed. It cannot be the domain or responsibility of HR. So, an organised and strategic education campaign is essential to explain the benefits that embracing a data-driven culture will provide.

The next step is to commit to democratising data. When employees have access to data, its impact becomes obvious. Break down silos and protectionism. Make data, and its analyses, readily available, understandable, and transparent across the organization.

Obviously, it’s dangerous to just give everyone in the organisation unfettered access to all its data, since they probably don’t have the skills or tools to make use of that data. And that’s where the real culture shift happens, or must happen. Businesses need to focus on building collaborative, multi-functional teams. While tech experts may understand the technology and systems, data is first and foremost a business asset. So a data-driven culture has to be driven by the business. And since it’s unlikely that you’re going to find too many employees with a balanced combination of business and data skills, you need to build your data-driven culture on collaborative teams in which every team member is willing to acknowledge what he or she doesn’t know, and work closely with teammates that do. This approach should also inform all future recruitment decisions. In a data-driven culture, you don’t recruit just for a vacancy, you recruit to make teams stronger.

Finally, be patient. Changing a company’s culture takes time, effort and commitment. Even when the leadership sets the example, the shift only happens through organic growth and evolution.

Realise that there are legacies that have to be changed. The technology legacy systems are actually the easy part because you can throw money at those. But human legacies around how things have always been done in the past are much more difficult to shift. But it must be done, because it is impossible to change to a data-driven culture if all your people are not willing to recognise and embrace data as a key success facilitator.

While the need to build these types of data-driven cultures is becoming increasingly obvious, the unexpected, and valuable, side effect of achieving such a culture is that it has the potential to massively enhance employee morale and productivity. That’s not just because data-based decisions are infinitely more effective than those based on hunches. It’s also because employees grow as people when the work they do has meaning.

Data has the ability to quantify the impact that each employee is having on the customers and the business. And when staff see the tangible value of the contributions they are making, they become far more connected to the company values and their own professional goals, and the result is incremental improvements in personal performance and, of course, bottom-line results.

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