The Boomerang Ventures team is keeping a close eye on the Internet of Things (IoT). This emerging technology has tremendous potential to transform many industries. This article does a great job of showing us the potential of IoT to enable data-driven manufacturing operations. The investment opportunities are significant.
Oscar Moralez, General Partner
Source: Plex Manufacturing | Re-Post Boomerang Ventures 8/19/2019
There is quite a lot of hype surrounding the Industrial Internet of Things (IoT) within the manufacturing industry. Large-scale Industrial IoT pilots driven by enterprise-focused technology companies paint pictures of fully-connected and automated plants, complete with Artificial Intelligence (AI) and Machine Learning (ML) that promise ROI but require large early investments of time and capital. Large manufacturing companies with deep pockets can invest in such disruptive initiatives, but small to mid-sized manufacturers are far more pragmatic and focus on small steps towards embracing innovation (as opposed to large disruptive changes). Our conversations with hundreds of mid-sized manufacturing company leaders reveal a desire to put their capital investments toward immediate value drivers like safety, quality, and production efficiencies that can deliver on ROI quickly—not three years from now.
Industrial IoT for Small Manufacturers?
Often overlooked in these sweeping digital transformation stories is the experiences of small- and mid-sized manufacturers. Consider the makeup of the manufacturing industry today—96% of all manufacturing companies identify as small businesses, and 90% have fewer than 500 employees. Investing in million-dollar Industrial IoT initiatives with long-term ROIs is out of the question for these manufacturers.
But here’s the thing: Industrial IoT initiatives don’t have to break the bank. Nor do small businesses have to invest in sweeping disruptive initiatives.
If done thoughtfully and strategically, an Industrial IoT program can deliver impressive benefits for both the large and the small. The key is to focus on small bite-size initiatives that add up to a larger whole, and to be maniacally focused on change management. Keep in mind that any change in an industry that builds on foundational pillars of “consistency” and “predictability” is not going to be comfortable.