Q&A: MIT expert Frank Piller talks smart manufacturing & Industrial IoT
Q&A: MIT professor Frank Piller talks smart manufacturing & Industrial IoT
Q&A: MIT professor Frank Piller talks smart manufacturing & Industrial IoT

Q&A: MIT expert Frank Piller talks smart manufacturing & Industrial IoT

MIT expert Frank Piller talks exclusively to the Internet of Business about the Industrial Internet and today’s era of smart customization in manufacturing.

Piller is professor at the RWTH Aachen University in Germany and co-founder of the MIT Smart Customization Group at the Massachusetts Institute of Technology (MIT) in the US, and he has over the last decade become one of the go-to people to speak to around how manufacturers are innovating through the use of new technology.

He is a big proponent of manufacturers moving to mass customization and platform-based business models, as well as customer co-creation, concepts which can all be enabled through emerging technologies like Industrial Internet of Things (Industrie 4.0) and 3D printing (otherwise known in manufacturing circles as additive manufacturing).

But this is not to say that Piller is purely a philosopher on these subjects, for he has also been actively involved with some of the most cutting-edge IIoT projects the manufacturing world has seen to date. Here, in an exclusive interview with IoB, he discusses the future of manufacturing, the role of the Industrial Internet of Things and mass customization, and why manufacturers should be moving to platform-based business models.

IoB: What role does the Industrial Internet (or IIoT) play in manufacturing today?

As of today, we can see a growing understanding for the great potential of IIoT throughout many producing industries.

However, very often the real value-add of specific solutions is unclear to many. There is a wide variety of steps that companies could take in order to get their processes and facilities more digitalized and automated. Unfortunately, it can be difficult to calculate the real financial benefit of doing so.

On the other hand, there are often huge investments to be taken if a production plant is being transformed to be IIoT-ready – because, unfortunately, very often the existing infrastructure, processes or mindsets are not suited to support efficient implementation of IIoT processes and automation.

Without proper implementation, however, many of the theoretically sound new business models and process improvements cannot be realized.

You’re a big believer that manufacturers must move to platform-based business models. What’s the benefit here for manufacturing companies?

Platform business models do hold a lot of disruptive potential as they enable (established as well as totally new and to date unknown) competitors to enter markets that were so far protected by high upfront infrastructure investment barriers.

With the rise of XaaS (AKA anything-as-a-service – Ed) business models, even people who were never related to a certain branch before can now gain a monopoly on the distribution of, for example, manufacturing contracts by implementing a well-designed platform that puts itself in-between established companies on both the ordering and producing side.

Manufacturing companies that want to prevent their businesses form this type of disruption may be well advised to seriously consider establishing a platform themselves, profiting from industry connections, market knowledge and brand power. However, such a platform business model is seldom easy to establish, especially in companies that that think and act like they have been for the past 200 years.

How can IIoT – and essentially mass customization – lead manufacturers to becoming more customer-centric?

The Industrial Internet of Things supports manufacturing companies in producing highly-individualized goods at an economically feasible price.

Based on (near) real time data from customer orders, intelligent automated production facilities as well as connected, self-optimizing supply chains enable new kinds of customer-centric value creation, product offerings and related services.

At the same time, connected goods on the B2B side – think the connected tooling machine – allows companies to gather data from the usage phase of the item. These learnings from the domain of the user allow more, new and potentially more valuable insights into the real usage, customer needs and shortcomings of the current solution, thereby enabling a new level of customer-centric innovation.

You’ve done an interesting project with Adidas on establishing smarter factories and smart, IoT-enabled products. Can you reveal more on what you’ve done here?

The idea of our work, in cooperation with a number of large companies and research institutions, within this publicly funded research project was nothing less than to create a platform that is able to connect multiple IoT objects and allows a multitude of services to be built around the data that these objects collect and provide to the platform.

We want to provide an ecosystem that breaks up the old limitation of many platforms – connecting data-collecting objects and providing “apps” that use the data is open to third party developers, providing the data analysis algorithms and actually work with the data collected, is not. Instead, data should be available to third party innovators who will think of completely new ways to use the data, analyze it and develop new services from this. We hope for this to be a powerful driver towards a new understanding of data driven innovation and smart-good service-platforms.

What other interesting IIoT projects/case studies have you been involved with?

Just to name two examples, we are actually working on developing a way to support companies in designing, producing and monetizing smart goods from a specific domain as well as services that are enabled by these goods.

Also, we are co-developing industry solution to make better use of production process data from the shop floor and optimize production and logistics processes. We cannot go into more details about this for a while, though.

What is the future of manufacturing, and how will technology play a role?

“In my opinion we will see a lot of development in manufacturing technology over the next few years. However, the exact development is increasingly difficult to predict as new technological potential gets unlocked at an exponential growth rate. Right now, additive manufacturing technologies (using 3D printers – Ed), machine learning and machine vision as well as connected, self-optimizing production and value-networks are about to take off and will greatly influence the factory of the future.

“However, technology will always just be the enabler. The questions that companies should invest most of their thoughts into, at this point, are: What will be the challenges and needs of consumers and companies in the next years? Which unsolved challenges are there that could potentially be answered by technological development and a connected, smart production and value creation network? What will be the business models of the future?

“Only after answering these questions it seems reasonable to begin to strategically invest large amounts into IIoT technology.”

Professor Frank Piller is leading an exclusive workshop at the Internet of Manufacturing on “Developing Platform-Based Business Models for Industrie 4.0: Methodology, Templates, Implementation”.

Taking place on 7-8 February at the Kempinski Munich, the Internet of Manufacturing is the only event in Europe specifically on the potential of the Industrial Internet of Things in manufacturing – and how to monetise the opportunity. Featuring case studies from Caterpillar, Rolls Royce, BASF and more, you will gain two days’ worth of insight that will enable you to stay competitive in a changing industry. Click here for further details.