1. Paying for Results Instead of Products
Throughout the economy, there is a growing emphasis on efficiency. The healthcare system in the United States is gradually more focused on outcomes. In law, some pundits are speculating that the billable hour is dying. And in manufacturing, several companies are experimenting with outcome-based models. Siemens, for instance, developed train-monitoring technology focused on outcomes. The Spanish rail company Renfe has entered into a performance-based contract with Siemens for the technology. Siemens boasts that the trains are on time 99.9% of the time. Passengers are reimbursed for delays exceeding 15 minutes.
2. Manufacturers Expanding Their Roles
John Deere is morphing from a tractor manufacturer to a farming partner and is using IIoT to do so. Examples of that transition include crop assurance and farm-state-sensing technology.
3. The Just-in-Time Supply Chain
The retailer Zara is using radio-frequency identification (RFID) to track their inventory and is aiming to completely shift to a wireless-based inventory. Such a supply chain could enable goods to be produced "just in time" to be sold, avoiding waste.
4. Understanding a Product's Life Cycle with Greater Clarify
Another way the Internet of Things could spur efficiency is its ability to increase the uptime of production machinery, curb time to market, and provide greater insights from buyer behavior.
5. Use-Based Insurance
IoT technology could also save money through dynamically sharing data with finance organization, enabling them to provide floating rate loans or incentives for capital use.
6. Differential Pricing
Some amount of variability in quality is common during manufacturing. But traditionally, the choice between quality has been binary. Either the product is good enough to ship, or it needs to be rejected. The IoT could enable more shades of gray by leveraging factory data to gauge product quality. This data, along with real-time pricing simulations, could be used to enable differential product pricing.
7. Reducing Injuries
IoT and other technologies can be used to automate tasks in hazardous areas. A prime example is underground mining. The mining conglomerate Rio Tinto is already working on automating mining operations as part of its Mine of the Future program.
8. Environmental Control as a Service
Companies offering HVAC services for industrial environments can leverage IoT technologies to study the physical atmosphere of the workplace and how it relates to risk events. They can then use their technology to optimize the environment for specific industries such as underground mining, drug research and development, and oil refineries. A small change in the ratio of, say, coal dust and gasses can be unsafe.
9. Proactive Quality Assurance
Traditionally in manufacturing, quality is reactive rather than proactive. New sensing and connectivity technology, however, opens up the possibility for proactive quality assurance, which can potentially curb rework, rejection rates, and other waste.