Steve Baker explains how the Internet of Things is helping one chemical company to extend the life of its machinery
It is difficult to avoid the hype around the Internet of Things (IoT) and the repeated predictions of some 20 to 50 billion connected devices by 2020. But to date, the talk has been about the technology rather than the business models and benefits. Unlike the ‘Internet of Computers’, which offers low deployment costs and near-zero marginal scaling costs, Things come at material cost: components, manufacturing, distribution, commissioning and maintenance. So, it is not sufficient to hope that value will emerge if we simply ‘do some exciting IoT stuff’. Rather, to paraphrase John F Kennedy, we have to ask not what we can do for the Things, but what the Things can do for us.
For example, can Things help with fundamental issues of operational effectiveness, risk reduction or customer engagement? The process of servitisation - transitioning a product business into a service business - has the potential to address these issues all at once although such a move is far from trivial. But with IoT technology designed to support the business model, the impact can be huge.
This is illustrated by a recent project undertaken by TTP for a chemical manufacturer. Its chemicals are used to optimise operating performance and service life of machinery. Large operators, each with many sites and many installations, engage a network of independent maintenance contractors who buy chemicals and dose systems. Maintenance operators submit a sample of treated fluid for analysis and upon confirmation that dosing was performed correctly - a process that can take a considerable time - payment is made for the maintenance call.
This business was exposed to a number of risks, the foremost being product substitution where maintenance contractors could - and indeed some would - buy and use competing chemicals, perhaps of unknown provenance. Of even greater risk was product avoidance; some contractors would not dose systems properly but instead simply submit samples of the diluted chemical. This presented a potentially huge reputational risk - high failure rates of supposedly protected systems - combined with the loss of revenue.
So, how could this unsatisfactory arrangement be reorganised to work better for all parties involved and bring value both to equipment operators and maintenance providers?
The fundamental challenge was to ensure that systems were dosed with the right amount of the right chemical. This could have been achieved by establishing an in-house maintenance organisation - a cost that operators would not wish to bear, and adding cost and complexity to a non-core activity. Furthermore, it would be desirable not to over-dose systems as that would give rise to unnecessary chemical usage and unnecessary service calls.
So, the first challenge to address was what sensing and dispensing techniques could be applied to achieve the dosing goal. A number of approaches having been considered, ‘unconnected’ prototypes were developed to prove the technology before connectivity and cloud services were introduced.
The engineered solution comprises a dosing port, with integrated sensor, which communicates via an ISM-band radio link to a gateway device that in turn reports the system condition to a cloud server. The ISM radio band refers to parts of the radio spectrum internationally reserved for scientific, medical and industrial requirements rather than communications.
Service calls get scheduled on the basis of specific needs on specific sites. Once on site, the maintenance operator dispenses the chemical via the dosing port. RFID is used to ensure that the correct chemical from the manufacturer’s range is dispensed while preventing the use of substitute chemicals. Since condition is monitored continuously and automatically, there is no need to collect a sample for later analysis. Effective dosing is observed via the cloud platform and the maintenance operator receives immediate confirmation that the service call is satisfactorily completed via their smartphone. This also serves as confirmation that payment is on its way.
This IoT-enabled model allows the chemical company to provide an optimised system dosing service to equipment operators, rather than supplying packaged chemicals to maintenance providers. The equipment operator enjoys a higher quality of service, having assurance of optimal dosing and enjoying a consequential reduction in costs arising from equipment failures. Maintenance crews benefit from a simple app-based scheduling platform and - more importantly for small, independent operators - immediate payment for service calls.
The chemical company also achieves a lower cost base for the same revenue stream, while product substitution and over-dosing are both eliminated along with the risk of reputational damage arising from product avoidance. And, finally, it secures the engagement of the independent maintenance operators that are a key enabler in the service delivery chain.
This project has not been short of technical innovation with novel flow measurement, chemical sensing, high penetration wireless and low power RFID technologies. But the most important innovation was the rethinking of the business model that preceded any discussion of Things.
Steve Baker is with TTP.