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The IoT Production Chain Expla...Nowadays, many companies around the world rely on IoT devices to maximize their efficiency, productivity and overall performance. This is especially true for companies that are dependent on the efficacy of their supply chains.
In such cases, IoT devices are invaluable because they provide a whole new level of automation, data gathering and communication to the entire supply chain.
Even adopting IoT late in the value chain can greatly improve things for numerous companies. Through implementation of IoT, businesses can revolutionize their value chains and gain a significant competitive advantage. The main reason is that IoT devices efficiently communicate with each other.
Therefore, even when implemented as separate systems, IoT devices contribute to the overall value of the entire IoT system. With that in mind, let’s have a closer look at the IoT production chain and its significant value.
Q. What exactly is the IoT value chain?
Each IoT solution is built from several blocks. Every block has its purpose and set of tasks that it’s designed to do. Even if blocks are separated, they can still communicate with each other, which is one of the most prominent features of IoT devices.
Depending on the system itself, IoT blocks can consist of multiple components ranging from hardware to software. Each IoT system has its own value chain depending on what it is designed to do and how, as well as what type of information it can extract while performing its tasks. That being said, let’s have a look at the example of an average IoT system.
IoT solutions can consist of multiple systems that will be integrated together to share data and monitor performance.
Deciding on the connectivity solution
Like with IoT solutions there are various options when it comes to choosing a connectivity solution for your IoT devices. It all comes down to company needs but other factors like costs, ecosystem requirements and coverage support.
It also depends on the scale of the system. That being said, there are two major options when it comes to choosing connectivity solutions and those are static and mobile assets. Therefore, let’s have a closer look at both options and what they are designed for.
Static connectivity
Static or fixed connectivity applies for devices that won’t be moved. IoT devices, such as sensors, scanners, motion detectors and so on are usually static assets that can use fixed connectivity, such as ADSL, Fiber optics, cellular and close range Wi-Fi routers.
In other words, you can plug a broadband cable into static IoT assets and rely on a more stable connection. These devices are usually used on-premise across the company offices, factories, warehouses and so on. Static IoT devices perform various tasks based on what you need them for but they are usually monitoring various activities.
Mobile connectivity
Mobile connectivity is the right choice when you also have assets that aren’t static. IoT devices that leverage a wider range of communication require mobile connectivity. What type of mobile connectivity depends on the range. In most cases, employee wearables can use the local wireless network or even cellular connectivity.
On the other hand, if you have a vehicle fleet that delivers goods to customers and you want to track their movement, such IoT devices will leverage cellular or even satellite networks as means of communication and connectivity.
Climbing up the value chain
IoT value chain is not just within the system companies implement. It generates value over time allowing companies to further increase its value should they wish to do so, of course. As you may already know, IoT devices track data and gather information.
Your cloud service provider then analyzes that data to generate useful insights. These insights are provided back to the company so that they can see what to do with the information they have. This can mean potential business growth opportunities with the help from IoT devices or expanding the existing IoT system to further boost performance or efficiency.
The choice is usually down to revenue potential. Whenever there’s IoT systems involved there's also big data. Your IoT service provider can usually analyze that data quite efficiently. After all, that is one of the purposes of implementing an IoT system, in the first place.
Climbing up the IoT value chain doesn’t necessarily mean upgrading the system itself but also using the insights it generates to improve business strategies and performance. This could also mean improving customer satisfaction using information from your IoT devices.
Underlying economics
Moving up the IoT value chain is fundamentally based on discovering transformational value for businesses of all sizes. This is realized through smart software applications that are built on top of data and information extracted from that data, as well as monitoring performance.
That sounds quite interesting but how does one identify these opportunities, to begin with? It all comes down to business needs and goals. Here are a few things to consider that may help in unraveling these opportunities.
After considering these factors, you can basically come down to developing a model that will suit your organization the most. Business goals may vary from company to company but the underlying economics is to use the system to improve the company’s bottom line. Fortunately, IoT systems provide multiple ways for reaching that particular goal.
Q. Commercial or industrial IoT?
Many companies today are focused on their primary market with a potential to expand as business growth allows it. When it comes to developing an IoT system, companies must decide whether to opt for an industrial or commercial solution. Both solutions have their unique advantages and unique selling propositions.
It's logical to assume that a company with a focus on the commercial sector may decide to expand to industrial and vice versa. Again, it comes down to what you want your system to do and how you can drive value from it. That being said, choosing between the two will mostly depend on the nature of your business and the data your IoT system can provide you with.
Closing Words
Every IoT system has a value chain worth exploring. Oftentimes, the value chain can provide a company with useful insights or even viable solutions depending on the circumstances. What companies decide to do with their IoT system and information will determine whether or not they move up the value chain and use the advantages IoT can provide them with to their advantage.