2016 was a year of political turmoil; the effects of which will see the UK entering a New Year that holds unknowns. One thing that is certain, however, is that the technology industry has been, and will continue to be a thriving hotbed of innovation, driving the digital revolution we are calling Industry 4.0.
So how will the manufacturing, utilities and services (MUS) sector be affected by this revolution in the coming year? With the UK’s manufacturing sector being the ninth largest in the world, making up ten per cent of the UK’s GDP and employing 2.7 million people, it is a vital pillar in the nation’s economic prosperity.
It is essential, therefore, that UK manufacturers are looking at what lies ahead in 2017 that will disrupt the sector, or provide them with new opportunities. Here are my top four trends that businesses in the MUS sector need to be aware of in 2017.
Shifting the business model of the MUS sector with IoT
For a number of years, we have heard that the number of connected devices will continue to increase; with the market size for IoT devices is expected to reach 20.8 billion by 2020. As a result, this year I expect companies to adopt IoT to aid preventive, or condition-based maintenance, which can drive efficiencies and remove unnecessary costs.
UK manufacturers sit in a severely competitive global market. Their product margins are being constantly pinched, and with so many products becoming commoditised, manufacturers are looking for opportunities to distinguish themselves. The result of this will be a rise in ‘servitisation’ as IoT becomes more prolific.
This is where manufacturers digitally transform their business model to provide services that can enhance and add value to their product offerings. For example, Rolls Royce now sells ‘power by the hour’, rather than the engine itself. Not only does this pose the opportunity to increase revenue, but also ensures the entire service a customer needs (such as maintenance, spares, expertise) is delivered in a new business model and payment profile, this trend will become more commonplace over the coming year.
The rise of IoT devices will also lead to a challenge of how to power these devices on a large scale. Consequently 2017 will see a battle between networks, such as SigFox, LowRaWAN and IoT NB to become the predominant supplier to enable the deployment of these devices.
The rise of the robots
In recent years, we have seen clear progress made in artificial intelligence (A.I.) across multiple sectors; MUS is no exception to this rule. Over the course of 2017, and indeed years to come, we will see A.I. and process robotics become even more mainstream as organisations look to augment staff and raise productivity.
The economic impact of this is expected to double annual economic growth rates and boost productivity One of the biggest impacts A.I. will have in 2017 is on administrative tasks, call centres, and corporate functions like HR. With the use of AI, organisations will be able to harvest knowledge and skills, transferring that information onto a platform that is readily available to advise engineers’ onsite. They will be able to talk to a chatbot in real-time helping to fix any issues on site without the need to call out another engineer.
IoT and security go hand in hand:
With more machines being built with their own IP addresses, the need for tougher and more robust security measures is essential. While IoT presents a range of new possibilities for businesses, it also exposes more chances for hackers to attack, which could have severe repercussions. For instance, for manufacturers of driverless cars, immense damage could be caused – such as overriding the safety controls due to insufficient security measures.
Due to the increasing need for more security, the industry will move away from ‘home made’ solutions where organisations have built their own systems for managing the remote working of IoT devices as this will not be appropriate going forward. Instead, businesses will start to adopt commercial platforms rather than building their own. These platforms will embed all of the best practices, meeting the scalability and security requirements which they will inevitably need to keep them secure.
3D printing, the IoT enabler
A limitation which has been delaying the mass deployment of IoT devices in the MUS sector has been due to the cost of parts. In 2017, however, 3D printing will have a substantial effect on this. I expect for manufacturers to be using 3D printing to print electronic devices, changing the cost of producing IoT custom and low-volume sensors.
As a result, this will increase the variety of solutions available. An area where printed electronics and smart and functional ink will have an ever more significant impact will be in tracking and tracing products. This will be especially true across international borders, which mostly appeals to manufacturers of products with high tax levels.
For instance, drinks manufacturers will be able to track at a bottle level which bottle was made where, for what market and what percentage of tax was paid on that specific packet by being able to print and embed a sensor into the packet itself.
On a larger scale, I believe 3D printing will help enable businesses to print custom made products on mass and at a lower cost. These manufacturers will be able to adapt to the specifications of each order by printing the unique components that are required for each job and do that at mass scale, making the business more viable.
Tom Roche, managing director of the manufacturing, utilities & services sector at Fujitsu UK & Ireland
Image Credit: PHOTOCREO Michal Bednarek / Shutterstock