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Revenue-generating IoT Opportunities for System Integrators

Kevin Niemiller
Kevin Niemiller 4 minute read

Manufacturing system integrators are facing a huge opportunity to develop recurring revenue stream models with IoT. These companies can benefit from re-thinking one-off projects and introducing more efficient methods with IoT products and services.

The purpose of this article is to review the benefits of IoT for manufacturing system integrators, introduce recurring revenue stream models, and provide tips on how to get started with developing an IoT product or service.

The term, manufacturing system integrator, in this article, refers to both a company who builds and programs equipment or machines for their customers and also one who sells their services to program new and existing equipment or machines.

Benefits of IoT for System Integrators

The first and most obvious benefit of introducing IoT is for the creation of subscription services which can result in recurring revenue streams for the system integrator. However, there are many other reasons why IoT is beneficial for both the manufacturing system integrator and its customers.

IoT is projected to be a $1 trillion industry by 2025 with over 20+ billion devices. Customers who use system integrators’ services are hearing more and more about IoT and looking for knowledge in this field. These organizations are also curious about how to implement IoT and how to gain value from it. As a system integrator, it is good to not only have knowledge in this field but also to have experience with it. By building IoT products, system integrators can be proactive with their customers and also have a product ready when new or existing customers request an IoT solution.

Global IoT Devices

Customers who use system integrators are always coming up with new robust projects, enhancements to their current equipment/lines, and ideas for new equipment/lines. It is important for system integrators to stay in communication with and connected to these customers to be top of mind when bids go out. If a manufacturing system integrator can provide a product that promotes daily interaction, it will be a great way to keep a good working relationship open with these customers.

Valuable insights are gained by capturing data from the equipment you program or build. This data can show how your customers are using your equipment, how long until specific assets on the equipment fail, expose patterns that lead to equipment failure, and improve the ability to provide accurate warranty information. This results in continuous improvement of the equipment you build and better methods for how you program equipment.

Provide value to your customers with IoT Products

There are many ideas for IoT products that can be used to create a recurring revenue model. In manufacturing with IoT, remote monitoring is becoming the biggest use case.

Remote monitoring allows companies to better utilize their engineers and maintenance departments by moving from preventative maintenance to condition-based maintenance. Instead of performing maintenance based on an interval schedule, you can now perform maintenance based on key attributes of your equipment (i.e. RPM, temperature, hours running, vibration, etc.). This allows customers to monitor and troubleshoot their equipment remotely and dispatch the correct personnel to the equipment when required.

With remote monitoring, a notification can be sent to critical team members (i.e. production manager, engineering, maintenance, etc.) when a specific event or alarm occurs on the equipment or manufacturing line. This leads to faster response time when the equipment or line goes down and alerts the correct team members to get the issue quickly resolved.

Departments monitoring equipment IoT

All manufacturing lines have a reject rate. With remote monitoring, you can now easily calculate the reject rate and then compare that reject rate to the same line historically or other like-manufacturing machines in the same factory or across the globe. This can also be done with OEE or other KPIs.

Once problem machines or lines are identified, you can dig deeper to the specific asset that is causing the most problems or rejects. Capturing the alarm data will reveal what alarms to target first to reduce downtime.

If a specific sensor (i.e. vision sensor) has a low reject rate over the last four hours and then all of a sudden the reject rate increases, an alert can be sent to the critical team members to investigate. The alert can enable team members to fix the issue immediately, reducing the amount of good products mistakenly rejected because of a dirty/bumped sensor or an operator error.

How to Get Started with IoT

Achieving the benefits of IoT and creating new revenue streams requires a new set of tools. You may have already used or be familiar with IoT platforms like MindSphere and ThingWorx. Although these platforms can help you to manage plant floor operations, if you are interested in delivering experiences to your customers, it is important to select an IoT platform which enables the creation of multi-tenant applications. Losant makes a great platform for companies to build their IoT vertical solution to provide experiences to end users. Losant can be white-labeled so manufacturing system integrators can sell uniquely branded solutions to their customers in addition to their existing products and services. Within Losant's End-User Experiences functionality, Losant also provides Experience Groups which allow system integrators to build multi-tenant applications to serve all of their customers. We’ve created an open-source project with Losant Experience Groups to simulate the view from inside a multi-tenant application.

The Losant Edge Agent can be installed alongside equipment to provide a non-intrusive way to collect and stream data to the cloud. The Losant Edge Agent provides connectors to connect to your equipment with EtherNet/IP, OPC UA, Modbus, SQL, and many more.

You can get started building in Losant for free. Losant provides a full-featured and no-cost Developer Sandbox where you can begin exploring the features. If you'd like to learn more about Losant and how manufacturing system integrators can begin to incorporate IoT, speak to one of our experts today.

Kevin Niemiller

Kevin is a Senior Integration Engineer at Losant. Kevin uses his factory floor background in automation and systems integration to develop the Losant platform by connecting new software, hardware, and cloud products. When he’s not working, Kevin enjoys time with his wife and kids; making his own home more intelligent with IoT; and maintaining his blog: bloggingwithdad.com