Summary

It may not come naturally to all of us, but you can be sure that heavy equipment manufacturers like Caterpillar are all-in when it comes to digitization today. At their 2015 annual stockholders’ meeting, the CEO stated that the introduction of Big Data will not be difficult: “Caterpillar specializes in Big: big trucks, big machines and big engines. Big data is just the next ‘big’ on our list.”

Companies still need to think about the other “bigs,” like mechanical engineering, strength, precision, efficiency, and endurance; these all still matter when it comes to heavy industrial equipment such as mining, excavation equipment, heavy trucks, transporters, cranes, etc. Just like Caterpillar, heavy industrial companies are among those who can and are leveraging the opportunity to digitize their offerings and their businesses. They know that they must do this to create more value and differentiate themselves in the market.

The Industrial Internet and Becoming a Digital Industrial Company

LNS Research defines the Industrial Internet as the advancement of IP technologies extending outward through the convergence of Information and Operation Technology (IT/OT) to connect people, processes, and things to create the Industrial Internet of Things (IIoT). GE’s CMO, Linda Boff, describes GE’s digital strategy as “making sure that as a company we are leading the intersection of the physical and the analytical; it’s the marriage of big iron and big data.”

Heavy industrial companies are among those who can and are leveraging the opportunity to digitize their offerings and their businesses.

Big Quality, Big Reliability and More

Even though heavy industrial equipment is produced in relatively low volume it has outsized importance. Uptime/availability is crucial to the ability of industrial companies to operate and compete in their end markets. The combination of high competition and the large capital investment of heavy equipment underscore the benefits that the Industrial Internet of Things (IIoT) can drive in total costs and benefits across the lifecycle of the equipment. Just consider these examples:

  • Delivering lower initial price
  • Improving delivered quality
  • Customization to meet ever more demanding customer requirements
  • Meeting tougher environmental regulations
  • Continual improvement of service and up time

Every corner of an enterprise impacts these goals, and digitization needs to become part of daily life across entire enterprises in the industry.

More to Come

I’ll leave it there for now. But next time I’ll continue this discussion by addressing the rise of IIoT as a top trend affecting manufacturing, what “good” looks like in becoming a digital industrial that leverages IIoT effectively, and some steps to consider along that journey.

About the author

Andrew Hughes

Principal Analyst, LNS Research

Andrew Hughes joined the LNS Research team in May of 2015 and is a Principal Analyst with his primary focus being research and analysis in the Manufacturing Operations Management (MOM) practice. Andrew has 30 years of experience in manufacturing IT, software research, sales and management across a broad spectrum of manufacturing industries.

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