For manufacturers, the promise of the internet of things (IoT) is tremendous. Connecting factory machines and other equipment with the digital realm can empower them to collect more data, analyse information faster and make better, data-driven business decisions.

But only if they get it right.

For help, many manufacturers are turning to Industry 4.0 as the conceptual basis for creating the smart factory and supply chain of the future. Industry 4.0 focuses on the use of what has become known as industrial IoT (IIoT), data analytics and cloud computing. Industrial IoT is looking at the use of IoT by organizations, while consumer IoT is looking at the use of IoT by consumers, e.g., your Apple Watch.

But how can manufacturers successfully implement IIoT and Industry 4.0 and create real business value? One critical success factor is a focus on business benefits.

Business benefit focus

This way of thinking represents a 180-degree shift from earlier discussions about IIoT that were focused on what the technology could do. Now’s the time for the conversation to shift to how IIoT can drive the business. Here are six areas where business benefits can be created:

  • Business-model innovation: Smart data collected by factory machines equipped with IIoT sensors can both support decision making and automatically trigger actions — and this can be monetized. For example, an organisation that services assets could offer predictive maintenance as an additional paid service.
  • Customer/user experience: IIoT can help to make products and services more attractive to both customers and internal users. For example, it can be easier for warehouse staff to find sensor-instrumented parts using indoor navigation. Similarly, smart products can determine when their service due dates are coming up or when they need maintenance checks, potentially preventing breakdowns. And data generated by smart products after the sale can be used to improve service.
  • Operational excellence: Sensors and actuators can monitor manufacturing processes and products, enabling real-time control of the production system. In supply chain operations, sensors and IIoT devices can track and trace products on their way from the factory to customers worldwide.
  • Environmental stewardship: Manufacturers are now being measured for corporate social responsibility, making the environmental impact of production processes and products a new area for value creation. IIoT can also help monitor the environment, trigger alerts and even shut down a hazardous operation.
  • Worker health and safety: Factories can be dangerous places. To help manage the risk, sensors can be used to monitor workplace environments and measure workers’ vitals, including heart rate, fatigue and stress. Also, by identifying an employee’s location, these sensors can help detect risks and identify issues in the work environment.
  • Compliance: Many manual inspections can be automated with IIoT technology. For fixed assets in a factory, this might involve sending out autonomous vehicles equipped with sensors, cameras and microphones. In larger facilities, outside areas can be inspected by drones.

To be sure, that’s not everything manufacturers looking for business benefits from Industry 4.0 will need to do. What else? We’ve identified five other critical success factors: strategic alignment, focus on business processes, change operating models, end-to-end security and uplifting digital capabilities.

To learn more about this, read my DXC white paper, 6 factors crucial to the success of industrial IoT in manufacturing.