Smart products to drive value
After years of hype and unfulfilled reality, early trial and pilot projects of smart projects are at last proving the IOT’s potential. The impact of insights gained from ambient data acquired from smart, connected and instrumented objects and infrastructure is highlighting the ways that businesses can enhance employee productivity, increase operational efficiency and create new business ecosystems across nearly every product and production process (assuming, of course, that they’re IPv6-addressable)
Here’s an example from the Consumer Goods industry that shows how “smart products” can drive real business value.
Remote monitoring and management of beverage vending machines
Some machines literally went missing (as much as 20%), while many mom-and-pop retail partners used their coolers for competitors’ soft drinks. Still others did not keep their machines full, which caused out-of-stock situations.
At the same time, the soda vending experience was changing, as consumers were developing a taste for custom-flavored drinks that they could create themselves at the kiosk.
The smart products project
The company partnered with Cognizant to create a connected vending network that provided a track-and-trace capability, along with an integrated view of machine inventory. That meant both the company and their retailers could see what customers were consuming. We combined our expertise in logistics and warehousing with our knowledge of IOT technologies, and using Microsoft Azure, we delivered a pilot of a scalable platform that could support new geographies.
Testing showed that the approach decreased truck rolls and out-of-stock situations, improved warehousing operations and cut costs. Better yet, consumers could get what they wanted: warehouse managers received alerts before customers needed new supplies, and customers were automatically notified before running out of syrup.
ROI: The details
At one site, out-of-stocks were reduced by a whopping 88%. Delivery drivers were able to be more efficient, stopping only at locations on their routes that needed replenishment. All of this used the very economical public Internet, unlike the closed-loop proprietary logistics networks that have existed for decades.
What began as a small pilot of fewer than 400 machines is now rolling out as a solution at scale, targeting up to 20,000 machines by the end of this year.
4 steps for smart products innovation
The market is highly competitive. To ensure ongoing product innovation and closer consumer relationships, consumer goods manufacturers must re-imagine their business and take advantage of new technologies in order to stay in the game.
Here are four steps to simplify the adoption of IOT and bring your company’s real ideas to the real world:
- Identify areas of biggest impact – cast a wide internal and external net
- Define a few key areas where experience or process transformation could have major impact
- Rapidly pilot and test new ideas and accept failures as ‘OK’
- Orchestrate technologies, governance, and managed change to rapidly scale the ‘winners’.
The Economist Intelligence Unit recently surveyed 200 product and innovation executives to find out how they are making products smart to deliver game-changing innovation, enriched customer experiences and new, across-the board levels of efficiency. We’re giving away the Smart Products Economy report that presents the key findings from the EIU study.