Why is Iot Revolutionizing Traditional manufacturing?

If you are not listening to James heppelmann, CEO of PTC, to give a speech on how Iot will transform traditional manufacturing, I may not feel deeply about the disruptive impact of a revolutionary age.

Boston was sunny and had a pleasant climate in June. This is not only the birthplace of American culture, but also the innovation center second only to Silicon Valley in the east. He pman's speech opened at the PTC live global 2014 in 2014. More than 2,000 user representatives and media from around the world attended the conference. As a representative of Forbes Chinese edition, I was invited to participate.

Since the birth of communication technology, 1/3 of the world's population has been connected by telephone, mobile phone, and Internet. In 2010, it was a milestone in Iot development: the number of objects connected exceeds the number of people connected. More importantly, the trend of linking things with things is accelerating, and the Internet of everything seems unstoppable.

IDC predicts that in 2016, the market value of Iot products and solutions will reach $1.9 trillion. McKinsey regards Iot as one of the 12 disruptive technologies that change life, commerce, and the global economy, the market scale in 2025 is expected to reach $6.2 trillion, 10 times that of the 3D printing market.

"The Iot is different from the traditional Internet," he said. The Internet emphasizes human connection, while the IOT emphasizes things, "the change in the world of Internet of everything is the driving force of innovation."

In his opinion, the arrival of the IOT era is inseparable from three major factors: 1) the development of chips-Moore's law makes the computing speed of chips develop rapidly over the past few decades; 2) communication Development-communication technologies make connections an indispensable part of people's lives; 3) the development of smart products (that is, "things" in "Iot.

About a year ago, he and Michael E. Porter, a world-renowned Harvard business school professor, jointly launched a study on manufacturing and smart connectivity products in the IOT era. "Our research finds that the explosive growth of smart connectivity products will redefine the entire industrial chain and influence the industrial structure and change the competitor's competitive strategy, "He pman said," This will be a major event that has a huge impact on everyone, and even the speed and disruption of this change are terrible."

"The world is changing, the products we make are changing, and the sources of value produced by products are also changing, and they are being transferred ." He said. So what will the IOT completely change the traditional manufacturing industry? He pmann made an analysis from three aspects.

First, the value created by the original hardware is shared by the value created by the software, and the value created by the software associated with the hardware will surpass any time in the past. He pman used smart phones as an example to illustrate the increasing role of software and hardware in product sales. "Many of our manufacturing customers tell me that their products have millions or even tens of millions of lines of code, and they can be considered software companies ." He said.

In China's manufacturing industry, this trend is also evolving. For example, a fan manufacturer's vision energy has upgraded itself from a traditional fan manufacturer to a "smart fan manufacturer" a few years ago by adding sensors to the fan and writing software code, to achieve intelligent control and operation.

Secondly, connection allows us to provide new options for smart Hardware Innovation in software, thus creating "new intelligence ". Cloud computing is disruptive. When making smart connection products, people can choose to integrate most of the software directly with the hardware, so as to get faster response speed, lower network dependence and higher security; you can also place all applications on the cloud. As a result, the hardware becomes a terminal interface, and the manufacturing complexity will be greatly reduced. All valuable applications can be flexibly configured through the network, wider selection and faster updates will reduce the value of hardware. Of course, you can also combine the two to make some core functions embedded software, and put some applications on the cloud.

Third, smart connection products will bring about changes in business models-from selling products to selling services. Philips Lighting Model Innovation is a typical case where they have changed the model of previously sold lamps, signed a 10-year lighting service contract with the parking garage in the Washington region, and installed LED lights for these garages. "LED lights are expensive lighting devices with a large one-time investment, but their advantages are obvious in terms of energy efficiency and efficiency ." He pman explained. Undoubtedly, it is a great challenge for customers to invest in the installation of expensive LED lights at a time. But Phillips has adopted a new service model that allows them to make sufficient profits from the $2 million saved in energy spending each year. During the service period, Philips not only needs to provide high-quality products, but also to continue to provide services-intelligence of lighting through sensors and chips, so as to monitor, operate and serve through the system platform. In terms of the model, this is a win-win situation-users get the "comfort" they need, while manufacturing and service providers make steady and steady profits.

Regarding changes in service-oriented business models, my previous article titled Future Enterprises: not selling products and selling comfort? There are also analyses.

So what new capabilities should manufacturing enterprises allow traditional products to possess in order to provide them with the features of smart connection products? He pman described the monitoring, control, optimization, and automation capabilities in four aspects. The specific analysis of these capabilities will be described in detail in the topic of the Forbes Chinese edition magazine on manufacturing revolution.

He pman, an enthusiastic engineer and entrepreneur, has taken the lead of PTC in the fields of product design software, collaborative design, product lifecycle management, and IOT platform, in recent years, the company has maintained a continuous growth trend and improved its entire lifecycle software tools and platforms in the manufacturing industry through collection and mergers and acquisitions. He pman himself is also a super fan of Iot experience. In his speech, he demonstrated how to remotely control various smart products and devices in his house through the network, allowing the audience to see the energy management, entertainment systems, and security systems at home in one click.