How traditional companies master digital transformation
The Internet of Things (IoT) is not new, but we are just beginning to see how radically it can change businesses and disrupt industries. Having designed, implemented, and operated more than 250 IoT projects, we know that the IoT is about much more than technology. Instead, the IoT is also a catalyst for the digital transformation that creates new business models focused on the needs of users.
Change is something every enterprise is used to. What makes the connected world different is that the pace of change – and the level of disruption it brings – is accelerating all the time. Although many changes happen only in small steps, they will happen quickly and have a huge and lasting effect. There are no role models for digital transformation. Companies have to reinvent themselves around their DNA – their collective experience – to prepare for their connected future.
I’d like to introduce you to four digital transformation thought leaders. These are companies that can look back on decades of history and manufacturing tradition. They have been quite successful in their fields. For many years, they have added physical value by designing, building, manufacturing, using or selling “things”. Now, these companies are reinventing themselves through digital, IoT-inspired transformation.
Listed below in no particular order
FivePoint: The future of smart living
Heritage: Building homes since 1954 Future: Developing connected communities
On a former shipyard site in San Francisco, the community developer FivePoint is conjuring up a new residential and business district. Twelve thousand homes plus restaurants, shops, offices, parks, and an entire boulevard for innovative companies. The project is worth eight billion dollars.
There, the IoT will make smart living a reality. “Smart living” describes what happens when technology becomes so interwoven with everyday life that they eventually become inseparable.
“Modern communities define themselves via technology,” says Kofi Bonner, regional president of community developer FivePoint. “Connected technology is everywhere. It’s what drives us. And the way people use it is going to change. We’re paving the way for this.”
FivePoint is a spin-off of Lennar Corporation, one of the biggest real-estate builders in the United States. FivePoint’s urban development project has picked up speed, and the solutions and innovations in San Francisco are intended to serve as a benchmark for smart living in the United States.
“If you want to build a smart city, you have to be flexible in your thinking. If you can conceive of it, it has to be possible.” Kofi Bonner, Regional President, FivePoint
MANN+HUMMEL: IoT lab as part of a global digitalization strategy
Heritage: Filtration champion since 1941 Future: Developing data-based services for systems in the field
With more than 20,000 employees and sales of approx. 3.5 billion euros in 2016, MANN+HUMMEL is a global player. In 2016, the company opened a global industrial IoT lab in Singapore. The decision to invest in the digitalization of advanced cleantech technologies, especially those on an industrial scale, comes at an apt time – the region is grappling with the consequences of air and water pollution.
IoT software and cloud technology bring new user-centric, service-based business models to life based on data insights. This allows the company to actively address new business areas such as condition monitoring for engine and wastewater filtration systems in the field. MANN+HUMMEL’s IoT developers are building connected solutions around the company’s consumer, commercial, and industrial filter systems.
“By harnessing our understanding of the filtration industry and the needs of our vast customer base, we aim to build optimized smart solutions with advanced sensors and predictive capabilities.” Thomas Fischer, Chairman of the Supervisory Board, MANN+HUMMEL
Zumtobel: Lighting infrastructure as a foundation for IoT-based services
Heritage: Manufacturing luminaries, lighting solutions, and components since 1928 Future: Becoming a software-oriented full-service provider in the lighting industry
Zumtobel Group headquarters in Austria and maintains a global production network comprising 13 plants. The company employs more than 6,500 associates and posted revenues of EUR 1,303.9 million in 2016/17.
As luminaires and lighting controls are found almost everywhere, building and street lighting will play an important role in the development of the Internet of Things as an infrastructure carrier. Current predictions that the majority of building-based IoT device installations by 2020 will be installed on the back of lighting installations therefore make perfect sense. So in future, smart lighting will basically have more than just a visual purpose. By using the collected data in luminaires and sensors not only for lighting management, new business models which go far beyond the lighting world come up.
Being aware of this rapidly changing environment of the market Zumtobel Group established the new business unit Zumtobel Group Services (ZGS). It’s the group’s answer on the digital transformation that impacts the whole lighting industry. Together with their ecosystem partners ZGS provides the full added value of connected lighting by offering data-based Services like space management in addition to intelligent lighting controls systems. Complementary ZGS provides all relevant services needed for a customer’s project from one hand, what means exploiting the full potential of connected lighting with minimal hassle and risks.
First successful projects are successfully running: Together with UK’s largest real estate investment trust Land Securities ZGS turns meeting rooms into living laboratories. Another project in cooperation with Bosch Software Innovations, Dassault Systèmes, Modcam and Rhomberg Group is connecting the Life Cycle Tower. The goal is to better use office space and improve the user experience in the commercial building.
“Thanks to new technological possibilities we’re seeing that light can have many new functions and that we are able to create added value for our customers.” Ulrich Schumacher, CEO Zumtobel Group
OSRAM: Making manufacturing more productive
Heritage: Lighting manufacturer with more than 100 years of history Future: Focusing on people and putting digital manufacturing into practice
OSRAM can look back on over 100 years of innovation in the field of lighting technology. The company employs more than 25,000 people and has operations in over 120 countries. For this example of digital transformation thought leadership, I don’t want to look at the portfolio, which the company already provides for many areas of the connected world. Instead, I’m looking at their long manufacturing tradition, which they are now striving to enhance through Industry 4.0. In particular, I’m interested in what’s happening at the company’s plant for xenon headlight lamps in Berlin, Germany.
There, OSRAM has connected more than 80 machines of various ages and production technologies. It then integrated them into a new, specially developed Industry 4.0 system, which also provides an app for its workforce.
At the heart of this concept is software that coordinates various streams of machine data in real time. Workers can now simply consult the app for a status report on their machinery. This presents a clear overview of any upcoming tasks, such as maintenance work or resupplying materials, allowing them to be organized and executed efficiently. In short, the app provides access to all the information necessary for the key tasks. OSRAM plans to roll the solution out to other plants.
Regarding Industry 4.0, OSRAM looks to partnerships with connectivity and software companies such as Bosch Software Innovations. As Dr. Frank Sroka, Project Manager for Industry 4.0 at OSRAM, points out: “Industry 4.0 projects require a new kind of cooperation . We dissolved the traditional customer/supplier relationship, which freed us up to partner on developing a tailored solution. In this way, we could address the specific needs of our employees and our workflows.”
“Connectivity and digitalization give us a chance to do things differently – and better.” Dr. Frank Sroka, Industry 4.0 Project Manager, OSRAM
More from digital transformation thought leaders
The OSRAM Ticket Manager: An Industry 4.0 app for employees. Check out the full case study.
Digitalization in manufacturing: Read the interview with Frank Sroka, OSRAM’s I40 project leader
Leadership in digital transformation: Interview with the CEO of Bosch Software Innovations