New OEM business models

New OEM business models

Planning and developing new machines are major investments for OEMs. There are many drivers from competitor activity, customer demand, new techlologies and new comcepts like Industry 4.0 . The Fourth Industrial Revolution (4IR) is about the value of data, but what is this data, where is it from, who is collecting it and how is it used? Importantly, does it require new OEM business models, and if so what are they?

With the expected adoption of IOT/IIOT, complacency by OEMs is not an option. But how important is it for machine builders to be ahead of the adoption curve and what are the implications? A Schneider Electric white paper considers how new OEM business models will deliver smarter machines and greater revenue generation.

OEMs can achieve competitive advantage by increasing operational efficiency. But a better way is through strategic uniqueness. Companies focused on operational efficiency facing growing competitive pressure from very different sides. Markedly, it puts existing business models into question says a recent Schneider Electric white paper.

New OEM business models

The traditional machine automation approach produces selected data, concentrated on the machine performance. This contrasts with the high availability of historical usage and contextual data of Smart Machines. It offers new opportunities for innovation and developing innovative products, services and corresponding business models.

Combining this with data from operations, processes, environmental, diagnostic, historian or current usage data opens the door towards many new opportunities. Data analysis brings high value information about efficiency and reliability of machines and processes. Moreover, it opens opportunities new thinking on how to use the data and for value-adding collaborations.

In addition to the sale of automation devices, software licenses and supportive services, the business of data management is growing as a niche. This niche can become the focus of non-automation players, innovative start-ups or even big IT players. Many of them establish technical foundations such as cloud technologies to find access to industrial market. New competitors may not sell hardware but provide innovative usage of IT services.

Markedly, more data will give forward thinking OEMS greater opportunities to differentiate themselves and their products from their competitors. Another opportunity to create loyalty will come from creating a new offering for customers of legacy products. This could be by offering IIoT connectivity to machines/automation with IT services over Ethernet without reworking the complete machinery.

Solutions exist from many vendors in this market, from fully wired to 3G modem integrated solutions. By offering physical to virtual solutions out-of-the-box offers users huge value.

Go here for the Schneider Electric white paper

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