Companies will likely spend some €250 billion on IoT, but they need to know which IoT applications have the potential to deliver the most value. Determining this requires recognizing that business leaders are using IoT to solve discrete business challenges. They’re asking, How can IoT help our company increase customer satisfaction, improve quality, support new business models (such as data-driven services), and reduce costs?
A few use cases are driving IoT adoption and growth and will continue to do so through 2020 at least. To gain meaningful market share over the near term, companies need to focus their IoT product offerings on the right use cases.
With this in mind, we identified a wide range of use cases for IoT. From this long list, we pinpointed ten IoT use cases that are poised to mature rapidly and experience widespread adoption (in a B2B context) through 2020. (See Exhibit 2.) Insight into where customers plan to invest in IoT, when they will invest, and how much they plan to spend helps clarify which use cases will drive IoT growth through 2020. Ten IoT use cases show the most promise.
Predictive Maintenance. Inevitably, businesses lose valuable time and money when equipment malfunctions or breaks down. And many companies also lose money each year by adhering to fixed maintenance schedules by which equipment vendors make routine calls—even when no maintenance is required. IoT technologies can predict or detect when a machine requires maintenance, reducing or eliminating unplanned downtime, extending maintenance cycles, and reducing costs. A host of industries—including utilities, discrete manufacturing, transportation and logistics, energy, and health care—can benefit from predictive maintenance. Of course, solutions need to be tailored to suit specific industry needs and applications.
Self-Optimizing Production. Connected factories and plants can use IoT to monitor and optimize production processes in real time, making automated adjustments to improve quality, enhance efficiency, and reduce waste. This use case is ideal for discrete manufacturing and process industries.
Automated Inventory Management. IoT can provide much greater insight into the status of inventory and the supply chain, allowing companies to track inventory location and condition (including, for example, temperature, humidity, and damage). The ability to monitor products across the supply chain allows companies to increase processing and response time, reduce stockouts and inventory pileups, and improve just-in-time production processes.
Remote Patient Monitoring. Physicians can track patient health remotely, in real time, to improve health outcomes and reduce health care costs. By tracking patient data and monitoring compliance, health care providers can help patients stay healthier and recover more quickly.
Smart Meters. Sensors can be used to monitor utilities—including electricity, gas, and water consumption—in real time. Smart meters can help consumers monitor their usage, reduce the number of technicians needed to read meters, provide real-time billing data, and enable more dynamic pricing.
Track and Trace. IoT sensors are ideally suited for increasing systems’ efficiency. They can, for example, enhance transparency in order fulfillment and provide information that can help reduce workstation transition times. The sensors can be used in the assembly area to identify the status of products and to locate tools, components, and materials.
Distributed Generation and Storage. IoT can be used to automate and optimize supply and demand across multiple energy sources. By remotely monitoring and controlling distributed energy generation and storage, companies can balance energy usage across the grid and reduce energy costs.
Connected Cars. Through new types of sensors, wireless connectivity, and onboard processing units, vehicles are increasingly connected, and many consumers already expect this type of functionality. Connected cars offer enhanced navigation, better safety features, and various creature comforts, including advanced music and entertainment options. Some features of connected cars are expected to mature slowly over the next five to ten years.
Fleet Management. In addition to tracking inventory and parcels, IoT is being used to track vehicles in real time. With better information related to fleet location, usage, and condition, companies can be more efficient, reduce maintenance and repair costs, and allow for dynamic rerouting to avoid congestion and delays. This use case is expected to mature quickly—within the next one or two years.
Demand Response. IoT is starting to change the way end users interact with utilities. Through demand-response programs, customers can allow the remote control of their use of certain appliances—air-conditioning systems, washing machines, and other energy-intensive appliances—during peak-demand periods. These processes can be automated to reduce supply and demand volatility and lower customers’ energy bills.