Implementing Industrie 4.0 Business Models for Revenue Growth

This article will discuss:

• How the digital transformation that comes with Industrie 4.0 leads to revenue growth
• The opportunities for revenue growth Industrie 4.0 offers through value-based services
• How OEMs and factory owners can leverage Industrie 4.0 to improve revenue-generation processes

The benefits of Industrie 4.0 have been extensively covered since the term was coined in 2011. These benefits have always revolved around predictive maintenance, machine monitoring, and optimizing industrial processes. At the root of the much-evangelized benefits of Industrie 4.0 is cost reduction, but Industrie 4.0 promises much more.

Digital transformation technologies, Industrie 4.0, and revenue growth

The aim of Industrie 4.0 is to build interconnected cyber-physical systems to automate and provide solutions to industrial challenges. Digital transformation technologies provide the pathway to utilizing technology to build these cyber-physical systems and to collect factory data. If the saying “data is the new oil” remains true, then captured data can be used to both optimize factory operations and as a source of revenue.

One opportunity data capture provides for growing revenue for OEMs is through the Machine as a Service (MaaS) initiative. MaaS, which is an Industrie 4.0 business model, is generally applied in two ways. The first is offering machine subscription plans to small or mid-sized businesses without the capital resources needed to purchase heavy-duty or expensive equipment. For large equipment that is not easily commoditized, the first application of MaaS subscription plans can provide an additional source of revenue to large equipment manufacturers.

The second application of MaaS involves offering expensive equipment to manufacturers for use and taking a percentage of the produce or profit made from its use. The profit collected from this Machine as a Service application serves as another source of revenue, but if data is the new oil, the data captured from MaaS should offer even more opportunities for profit.

How? You may ask. The short answer is through value-based services.

OEMs can earn as much or even more money from the services they offer compared to the machines they sell. Examples of the additional value-based services OEMs can offer their customers include:

• Benchmark data - Benchmark data refers to industry-specific statistics concerning machine utilization and throughput. These benchmark statistics contain exact details of how a machine should perform under specific scenarios. The statistics such as OEE, throughput, production speed, etc. are obtained or calculated using the law of averages from the hundreds of machines an OEM sells to factory owners.
  With MaaS, OEMs get that data free and can then create benchmark packages that can be sold alongside machines to earn more revenue. Factory owners, which are the end-users, will then use the benchmark data to develop production schedules to optimize factory operations.
  
  
• Remote maintenance services - The average factory comes with a technician or two to handle repairs and maintenance tasks on the shop floor. The use of an in-house technician ensures unplanned downtime caused by defective machines is drastically reduced even if a more-experienced technician may need to be called in. OEMs can provide remote support to shop-floor technicians as a value-added service for every piece of equipment sold regardless of its geographical location.
  To accurately do this, another Industrie 4.0 concept must be integrated into maintenance processes; the use of augmented reality as a means of validating shop-floor issues. Virtual representations of shop-floor equipment can serve as a storyboard for pinpointing component failure and providing step-by-step instructions through visuals to anyone on the shop floor. Thus, technicians can easily explain the unique defects they noticed to the OEM, which then recommends a solution for the repairs.

How factory owners can leverage Industrie 4.0 for revenue growth

The products of the future are expected to function optimally in digital environments and ecosystems. Thus, to increase revenue factory owners are expected to develop industrial products with digital features. The medtech industry provides various examples of the digitized products of the future.

Wearables or wearable devices track health parameters and can be equipped with the capacity to diagnose issues that may have been previously overlooked. The diagnostic capacity of these devices is realized by analyzing a wearer’s biometrics and applying artificial intelligence to discover patterns that may highlight health issues.

The possibility of developing industrial products with digital features creates a new source of revenue for industries and the opportunity for new stakeholders to explore. Alphabet’s health initiatives are an example of this. The company's partnership with eye clinics has led to the application of artificial intelligence and data analytics to discover signs of eye disease doctors may overlook.

Conclusion

The important role Industrie 4.0 is expected to play in optimizing productivity also extends to revenue growth. The Machine as a Service, Data as a Service, remote services, and the design of innovative products with digital features will provide the foundation that enterprises will explore to grow revenues.