June 20, 2016

Internet of Things (IoT) - Very Big Business/Value Opportunity 2025


$11.1 Trillion Value Opportunity in IoT by 2025

2015 McKinsey Estimate



What is Internet of Things?


The Internet of Things refers to the networking of physical objects through the use of embedded sensors, actuators, and other devices that can collect or transmit information about the objects. The data amassed from these devices can then be analyzed to optimize products, services, and operations. Perhaps one of the earliest and best-known applications of such technology has been in the area of energy optimization: sensors deployed across the electricity grid can help utilities remotely monitor energy usage and adjust generation and distribution flows to account for peak times and downtimes. But applications are also being introduced in a number of other industries.

IDC defines IoT as a network of networks of uniquely identifiable end points (or things) that
communicate without human interaction using IP connectivity — be it locally or globally. It is not an
individual technology that can be implemented in isolation but it is an integral part of an "innovation
platform" tying together multiple IT systems and teams within and sometimes outside an organization.


The Internet of Things Is Part of the Third Wave of IT-Driven Competition


For hundreds of years, the types of products that were produced were mechanical, and
value-chain activities were performed manually. This has changed with successive waves of
information technology.

WAVE 1: VALUE CHAIN AUTOMATION. In the 1960s and 1970s, IT automated previously manual processes of information collection and processing in individual activities across the value chain, such as order processing and billing, which improved productivity.

WAVE 2: VALUE CHAIN DISPERSION AND INTEGRATION. In the 1980s and 1990s, the Internet enabled connectivity and integration across the value chain. Customer relationship management stitched together what had been separate processes; supply chains became more global, efficient, and optimized; and again, productivity improved. So value chains got extended nationally and globally but were connected through internet.

WAVE 3: SMART, CONNECTED PRODUCTS. In this wave, information technology is embedded in the products themselves.  A product becomes “smart” when technology, such as a sensor, is embedded in the product. A product becomes “connected” when one product is connected to another. With miniaturization and ubiquitous connectivity, it is possible to make all types of products smart
and connected.
http://info.tcs.com/rs/tcs/images/Report-HBR-ConnectedProducts.pdf



According to a report from McKinsey & Company's Global Institute released in 2015,  IoT has the potential to be worth between $3.9 and $11.1 trillion by 2025. The value includes productivity improvements, time savings, and improved asset utilization, as well as an approximate economic value for reduced disease, accidents, and deaths. So, it does not represent revenue of IoT equipment, software and services selling companies.


The report includes some estimated segment values:

Vehicles: Autonomous vehicles and condition-based maintenance, with an estimated value of $210 to $740 billion

Cities: Public health and transportation: $930 billion to $1.7 trillion

Outside Logistics and navigation: $560 billion to $850 billion

Health and fitness: $170 billion to $1.6 trillion

Construction operations optimization, as well as improve health and safety of operators: $160 billion to $930 billion

Retail environments: Automated checkout: $410 billion to $1.2 trillion

Factories: Operations and equipment optimization: $1.2 billion to $3.7 trillion

Offices: Security and energy: $70 billion to $150 billion

Home: Chore automation and security: $200 billion to $350 billion

The growth of IoT applicatgions  means  IT departments and CIOs  have to plan learn the skills related to IoT systems and applications and plan corporate strategies around the new technology that could be worth trillions in just 10 years' time.


Business Scope  2014 Estimate:
http://www.mckinsey.com/industries/high-tech/our-insights/the-internet-of-things-sizing-up-the-opportunity


2015 Estimate
http://www.mckinsey.com/business-functions/business-technology/our-insights/the-internet-of-things-the-value-of-digitizing-the-physical-world


http://www.informationweek.com/it-life/4-iot-skills-it-pros-need/a/d-id/1320912



Industrial Giants are making Massive Investments in Industrial IoT
Even predictions of $60 trillion by 2030 are being made.
https://arc.applause.com/2016/06/24/industrial-iot-investment-ge-digital-hitachi/


GE into IoT in a Big Way - Offering  Predix - IoT Platform

February 2016

GE committing $1 billion to dvelop IoT based business. IoT involves placing sensors on gas turbines, jet engines, and other machines; connect them to the cloud; and analyze the resulting flow of data to identify ways to improve machine productivity and reliability.



IoT can also be used to improve yields from operations. The average recovery rate of an oil well is 35%. The rest of crude is left in the earth because available technology makes it too expensive, If improvement in technology raises yield by 1%, the world’s output will increase by 80 billion barrels the equivalent of three years of global supply. The economic benefits are  huge and IoT offers a way to find protable solutions.



In September 2015, GE projected its revenue from software products would reach $15 billion by 2020, three times its 2015 bookings. GE expects that IoT platform and software  Predix, a cloud-based platform for creating Industrial Internet applications will contribute a big portion of that increased revenue.


GE  began developing the IoT solution in 2012.  Initially, it was developed for GE. Now it is offered on the market.


The driving force behind taking Predix to market was the scope of the opportunity: GE determined that the market for a platform and applications in the industrial segment could reach $225 billion by 2020.2  The company developed  the commercial version, Predix 2.0, and in October 2015 made the platform directly available to channel and technology partners as well as customers who could use the platform to build their own set of analytics. .


Platform Benefits

Predix was designed to be a software platform. The platform has open standards and protocols that allow customers to more easily and quickly connect their machines to the Industrial Internet. The platform can accommodate the size and scale of industrial data for every customer at current levels of use, but it also has been designed to scale up as demand grows. Apart from what GE offers, customers may develop their own custom applications for use on the Predix platform, GE executives are working to build a developer community and create a new market for apps that can be hosted on the Predix platform. Finally, data security, a concern for many companies considering IoT applications, is embedded at all platform application layers: services enablement, data orchestration, and infrastructure layers.

IoT Pilots

A pilot is often an essential step of the adoption process. In early 2015, GE executed a four-week engagement with one of the largest global energy companies, which wanted to reinvent how it manages corrosion related maintenance its “static” equipment — specifically, its storage tanks used during oil and gas processing.   During the four-week exercise, after discussions with various experts related to the design and maintenance,  GE team developed a software solution that helped engineers to “walk through” the equipment digitally. This provided reliability engineers new insights they could  to better manage those assets. The project was a success and offered GE a way to discuss future engagements.

GE hopes to have three more customers booked by early 2016 to run pilots of Predix offerings. GE executives see the pilots as a way to bring customers onto the selling team. Global spending on the Industrial Internet was $20 billion in 2012. Analysts were forecasting that number would reach $514 billion by 2020, creating nearly $1.3 trillion in value.

http://sloanreview.mit.edu/case-study/ge-big-bet-on-data-and-analytics/

Sam Ransbotham the author of the article in MIT Review is an associate professor of information systems at the Carroll School of Management at Boston College and the MIT Sloan Management Review guest editor for the Data and Analytics Big Idea Initiative. He can be reached at sam.ransbotham  at the rate bc.edu and on Twitter at @ransbotham.



Digital Reimagination


Five key technologies (Digital Five Forces)  are  maturing and  precipitating
the shift to the Digital Consumer Economy. These are Mobility and Pervasive Computing, Big Data,
Social Media, Cloud, and AI-Robotics. These forces are  being used in various permutations
and combinations to drive new applications. As a result, new Digital Composite Forces are emerging.

Foremost among them is the Internet of Things, which combines mobility and pervasive computing,
big data, cloud, and—increasingly—artificial intelligence.

Large number of  devices can be connected to the IoT  driving new economic opportunities. “Digital Reimagination.” involves leveraging a combination of the Digital Five Forces and Digital Composite Forces to reimagine the enterprise along one or more of six dimensions: business models, products and services, customer segments, channels, business processes, and workplaces.

Recently,  a major global engine manufacturer created a new services stream by using sensor-collected big data to predict failures on their engines. When such a failure is predicted, the vehicle operators are automatically sent notifications along with directions to the nearest service center. There is value creation in this initiative. It gave new maintenance revenue to the manufacturer, but, this has also helped the customer  by reducing inconvenient breakdowns.
http://info.tcs.com/rs/tcs/images/Report-HBR-ConnectedProducts.pdf

$14.4 trillion of value - IOE (Internet of Every Thing) by Cisco - 2013 Estimate for 2022


In other words, between 2013 and 2022, $14.4 trillion of value (net profit) will be
“up for grabs” for enterprises globally — driven by IoE.

Where is the value?


The five main areas:
1) asset utilization (reduced costs) of $2.5 trillion;
2) employee productivity (greater labor efficiencies) of $2.5 trillion;
3) supply chain and logistics (eliminating waste) of $2.7 trillion;
4) customer experience (addition of more customers) of $3.7 trillion; and
5) innovation (reducing time to market) of $3.0 trillion.
http://www.cisco.com/c/dam/en_us/about/ac79/docs/innov/IoE_Economy.pdf  - Cisco 2013 report.

Cisco report has value estimate for countries and regions.


Various reports on Market Size
http://postscapes.com/internet-of-things-market-size


Updated  24 June 2016,  24 Mar 2016, 23 Mar 2016

June 17, 2016

Understanding Your Products Through IoT and Data Analytics





Using IoT Data to Understand How Your Products Perform

HBR June 2016

General Electric has announced that it will spend $1 billion dollars onn IoT.

Survey of 795 large companies (average revenue of $22 billion) in North America, Europe, Asia-Pacific, and Latin America by TCS found that  average per-company spending on IoT initiatives — was $86 million in 2015.  It is projected to grow to $103 million by 2018.

 Use of IoT is increasing. Producers are installing sensors in their products.

But, only 6% of companies selling products with less than $100 price tags had embedded wireless sensors in their offerings. In contrast, 54% of companies whose products’ average sales price was between $1 million and $10 million did have digital sensors that communicated product performance back to them.

Four key elements to use  IoT to get the ultimate truth on product performance:


1. Getting customers to agree to have their products monitored, which in turn means giving them something of value in return.  Customer must have some benefit.

2. Product performance data must be processed and acted upon quickly. Real time data analysis capability has to be developed.

3. A culture that accepts the truth, however bad. Companies have to accept bad performance of their products and communicate to the customer the anticipated problems. Do rectification of them.

4. “Reimagining the business” must become the mantra.  It is like reengineering. Now branded as reimagining. Understand the services of IoT offers and redesign your business around the power and potential of IoT. Creative effort to use IoT in innovative way is required to see new things before others or understand what others have done through newspaper or digital media news.

A to Z of Marketing Management - Principles, Methods, Techniques, Strategies, Tactics and Tools



Collection of  Marketing Articles from Blogosphere


2016 Articles

What do you think will be single biggest trend in digital media and technology in 2016?
The Metrics That Marketers Muddle - MIT Sloan Management Review
CRM: More Than Just A Marketing Management Tool

A


Accessible segments, Action campaigns, Adaptation, Adoption, Ad placement policies and services, Advertising,Advertising elasticity, Advertising effectiveness

Advertising
Analysis of Consumer Markets



B


Brand Positioning


C

Competitive Strategies for Followers and Nichers
Consumer Behavior
CRM: More Than Just A Marketing Management Tool


D


Determinants of Customer Satisfaction and Loyalty

Developing Enterprisewide or Company Wide Marketing Orientation

Direct Marketing



E


F


G


H

I

Integrated Marketing Communication - Kotler and Keller Chapter Summary
International and Global Marketing

J

K

L

M


Marketing Concept - Kotler



Management of Marketing Department and Function
Managing Product Lines and Brands
Managing Wholesaling and Retailing Network

Marketing and New Product Development
Marketing Channel Management – Important Issues
Marketing Communication: Channels and Promotion Tools
Marketing Logistics

Marketing Management for Service Firms
Marketing Management Research - Propositions
Marketing Public Relations
Marketing Research and Market Demand Forecasting

Marketing Strategies for Challenger Firms
Marketing Strategy - Differentiating and Positioning the Market Offering
Marketing Strategy for New Industry Products
Marketing Strategy - Marketing Process - Kotler's Description

Market Segmentation and Selection of Target Segments


N

O


Online Marketing

P

Planning in the Marketing Process
Pricing Strategy and Tactics


Q

R

S


Sales Force Management
Sales Process and Sales Training
Sales Promotion
Scanning the Marketing Macroenvironment - Philip Kotler's Book Chapter Summary



T


The Metrics That Marketers Muddle - MIT Sloan Management Review

U

V

W


What do you think will be single biggest trend in digital media and technology in 2016?

X

Y

Z

June 3, 2016

Interesting Books on EBSCO Host



30 Days to Social Media Success

Gail Z Martin

Marketing with Social Media : A LITA Guide

Thomsett-Scott, Beth C.

June 1, 2016

Component Areas of IE: Human Effort engineering and System Efficiency Engineering






"Industrial Engineering is human effort engineering and system efficiency engineering."
This statement appeared in IIE magazine "Industrial Engineer" in March 2010 issue.


In the year 2015-16, Institute of Industrial Engineers changed its name to Institute of Industrial and Systems Engineers. It was explained by some of the proponents of the name change is required to focus the attention of industrial engineers on the big picture of the enterprise. Otherwise industrial engineers are more focused on the time study of single operator and improvement of single work stations. But in my thinking, system was always present. All the pioneers of industrial engineering Taylor, Gilbreth and Emerson mentioned systems and carried out enterprise level changes. All of them worked with men and other resources. Hence, a major classification of industrial engineering areas can be made as system efficiency engineering and human effort engineering.


The following subjects or techniques form part of industrial engineering tool kit and can be categorized under human effort engineering and system efficiency engineering. More detailed articles are written for each topic

Human Effort Engineering

1. Principles of Motion Economy and Motion Study.
Therbligs, SIMO chart, Chronocycle graph
2. Work Measurement
Stop watch time study, worksampling, PMTS - MTM, MOST
3. Ergonomics

4. Safe Work Practice Design
Personal protective devices

5. Wage Incentives and Job Evaluation

System Efficiency Engineering

1. Method Study and Methods Efficiency Design
Process analysis, operation analysis, work station design
2. Value Engineering

3. Statistics Based Techniques: Statistical Quality Control (SQC), Statistical Process Control (SPC), and Six Sigma Projects etc.

4. Mathematical Optimization, Operations Research and Quantitative Techniques
Linear programming models, Integer programming, Non-linear programming
5. Plant Layout Studies for reduction of material movement, operator movement and movement of salesmen etc.

6. Engineering Economics
Engineering Economic Appraisals of projects submitted by Engineering Departments

7. Specialised Functional IE Solutions: SMED. Lean Manufacturing, BPR


______________________________________________________________________




Related Papers and Articles


IE Tool Kit in Hospitable Food Service Sites.
IE magazine article, 2010
http://www.iienet.org/uploadedFiles/IIE/Applied_Ergonomics/martinez.pdf
Operation Research Methodologies in Industrial Engineering: A Survey
Authors: Robert E. Shannona; S. Scott Longb; Billy P. Bucklesa
IIE Transactions, Volume 12, Issue 4 December 1980 , pages 364 - 367

Industrial Engineering Job Description - Boeing
http://www.iienet2.org/uploadedFiles/IIE/About_IIE/IE%20Functions%20SS%20version.pdf


Source:
http://knol.google.com/k/narayana-rao/industrial-engineering-tool-kit/2utb2lsm2k7a/2352



June First Week - IE Knowledge Revision

http://nraoiekc.blogspot.com/2016/05/june-first-week-ie-knowledge-revision.html

Industrial Engineering Knowledge Revision Plan - One Year Plan


January - February - March - April - May - June



July - August - September - October - November - December


Updated 1 June 2016, 16 Dec 2011