The Age of the Internet of Things is in full swing—and manufacturing will never be the same.
Indeed, West used the automotive industry as an example. With the IoT, companies can collect real-time data during the testing of a new model. That nifty trick is accomplished by networking black boxes installed on test fleets and containing the devices engineers use to analyze performance data. The information can indicate problems before the cars even get off the test track. “There is a new demographics and consumer space out there that has been brought up with very rapid innovation cycles,” said West. “For the automotive industry, it is absolutely critical to bring new products to market quickly.”
For corporate executives, it is crucial to move swiftly in adopting the technology. That means they will have to readjust their ways of thinking. But for managers at companies already generating substantial profits, altering a winning formula can be extremely threatening. Ignoring a breakthrough in the making of things, however, could prove to be disastrous. “The model of innovation that underpins our system today is really changing,” said Jackson of Celestica. “We now see a more collaborative, externally oriented sourcing of innovation.”
Managers at both large and small companies must embrace this new ecosystem of open, crowd-sourced innovation. And CFOs and treasurers can help push top-level buy-in by using traditional yardsticks. “The number-one thing firms need to understand is the efficiency ROI [return on investment] of an IoT investment to help build a case for that investment,” said West. “The introduction of IoT technology doesn’t come for free.”
Most times, it won’t be hard to make the case. Biller noted that General Electric recently set up a competition for the redesign of a nonstrategic component of a jet engine. The challenge was issued globally. No one was excluded. “We thought we would get 30, maybe 40 entries but we received close to 700,” he recalled. “And the winning design, from Indonesia, managed to reduce the part’s weight by 75%.”
Beyond ROI, backers of this new technology will have to convince management that the IoT is secure. Certainly, embedding networking software in individual components moving along the supply-chain offers cybercriminals more avenues for entry. “There are only two kinds of companies,” Huijbregts noted. “Those that have been hacked and those that don’t know they have been hacked.”
Although investments in security are not sexy, the expert panel agreed that they are more vital than ever. “The solution lies in raising awareness at the executive level and getting to a good understanding of industrial control system security,” said Negm of Accenture. “Firms must prioritize innovative ways of getting ahead of the threat.”
And ahead of rivals. In the world of fast-evolving technology, competition could come from unexpected quarters. As Huijbregts warned, enterprises must “realize that if they don’t change, some start-up led by a bunch of teenagers will come up with something we didn’t even see coming.”