IDC Manufacturing Insights Report On Innovative Use Cases for IoT Implementation
28 May 2015
International Data Corporation (IDC) India recently released a research report, Innovative Use Cases for the Adoption of Internet of Things in India Manufacturing (IDC #IN250976). "Product Innovation" continues to be a high business priority among manufacturing enterprises. As innovators actively seek new product functionalities and business models in today's competitive world, the Internet of Things (IoT) is emerging as one of the key tools in this journey. IoT extends the sphere of innovation beyond designing better performing or cost effective products to connected assets that enable new value propositions throughout the useful life of a product from its manufacturing to shipment to the customer's location to its intended performance in the field.
The report is a result of detailed study and analysis on how IoT is being adopted as a tool for innovation starting from processes within the shop floor to supply chains and for products and services. IoT or machine to machine (M2M) is not totally new to manufacturing. But the integrated and modular fashion in which it is being implemented today makes it affordable with niche players in the ecosystem from telecom players for telemetry to specialized sensors, platforms and information exchange standards and system integrators who can do the implementation end-to-end. IoT has reached a level of maturity where the major challenge seen in its adoption is not the cost involved or the ROI but infrastructure constraints and scalability.
IoT is the most adopted among what IDC calls the "Innovation Accelerators" in India followed by Security. The other accelerator technologies include robotics, 3D printing, natural interfaces, and cognitive systems. IoT is also a technology expected to see significant growth in the next two years. According to IDC's forecast, revenue from IoT technology and services for discrete and process manufacturing in India will grow from $1.3 billion in 2014 to $3.9 billion in 2020 at a compound annual growth rate (CAGR) of 20.1%.
Identification of innovative use cases that make significant business impact become important in such a situation. These use cases should be sustainable from a cost and scalability perspective and for which customers see value and are willing to pay directly or indirectly. The three broad categories of IoT use cases identified by IDC are:
- Smart manufacturing - implementation within the factory to continuously monitor critical assets, equipments, process, and product parameters for better yield, utilization, and proactive identification of issues before they cause any disruption to production. This is not a totally new area of implementation, but there are open standards being developed. Traditional enterprise IT systems are gearing up to accommodate the IoT requirements easily making the implementation a more repeatable process and not a unique project.
- Connected products - IoT for products giving continuous feedback about their location and performance after they are put into service in the field, using telemetry for remote monitoring. This opens up new business models such as product-as-a-service for costly assets such as construction and agriculture equipment. End users do not buy the equipment but use its services only for a specific period of time and pay only for that based on hours of usage.
- Connected supply chain - IoT for keeping track of inbound and outbound shipments for location-related information, timely order fulfillment, and critical in-transit parameters such as temperature.
IoT is becoming a vital technology in this spectrum of innovation and has seen a fast pace of adoption from multiple manufacturing organizations and service providers in India compared to other 3rd Platform technologies. "Companies that make IoT collaborative in nature cutting across departments and embedded as part of the product strategy and not just an individual technology implemented on its own will realize the value it offers better and faster," said S Ramachandran, Principal Research Manager, IDC Manufacturing Insights.
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