IoT (internet of things) has been talked about for over a decade now, but the business value has been somewhat elusive. Sometimes you need to dig for business growth, and sometimes business growth finds you. For elevāt-IoT (elevāt), it all started more than thirty years ago at an industrial manufacturing and integration company called Western Integrated Technologies (WIT). The team at WIT, previously headed by William “Bill” Hill (co-founder and CEO elevāt), had experienced many changes over the years, but none quite like the last five. Suddenly, there was an opportunity to eliminate a giant blind-spot for manufacturers of heavy commercial equipment; including construction, agricultural, and public works vehicles and more. That’s when WIT started incubating a new company within its walls that would later become elevāt.
Until the internet of things (IoT) came along, original equipment manufacturers (OEMs) had no way to know exactly how the machines they were building were being used or what the production output of those machines was. This left a blind spot that limited the OEMs’ ability to recommend maintenance protocols and scheduling for replacement parts, while also limiting product improvements and R&D for new machines they were to design and build in the future. It also meant plenty of machines were off line or undergoing costly repairs that could have been completely avoided – Saving both the OEMs and their customers money and time, not to mention, making them more money.
This is where elevāt comes in. The company is giving heavy equipment manufacturers, and their customers that use the equipment every day, the information they need to keep machines running optimally and even improving the machines with age, all while helping the OEMs develop impressive improvements in their product line ups.
I spoke with Adam Livesay, co-founder and CRO, at elevāt. He shared a number of lessons he has learned in rolling an IoT SaaS company out of a traditional manufacturing industry organization.
There’s been a lot of hype around IoT over the last 5-10 years, but, early on, there wasn’t a lot of business value delivered. Most of the first round of IoT startups (we will call this IoT 1.0) came out of the software world, not out of the industries they were aiming to serve. These companies have been seeking to solve broad, general problems, and while it worked to an extent, it left most manufacturing companies sitting on the sidelines waiting for compelling business reasons to implement the technology. Not to mention, that tracking hardware technology was still in its infancy.
“I spent 10 years at WIT before becoming a co-founder in elevāt with Bill. We saw the hesitation to move to IoT solutions from inside the heavy equipment industry,” shares Livesay. “From an industrial OEM perspective, we saw IoT 1.0 companies lacked of understanding of the problems that needed solving and how to seamlessly integrate into the OEM and industrial end user processes. Our WIT customers were asking us to provide our advice. They shared the frustrations they had with a lack of solutions that fit their requirements. This is when we decided to start creating a solution within WIT. We knew we could build a solution that would deliver true business value and help OEMs build better machines with continuous improvement in mind,” continued Livesay.
Today, nearly every machine or piece of hardware has sensors on it – sometimes many sensors. Yet, just because you can collect the data, doesn’t mean it will help you decide how to improve the utilization, output, useful-life or design of a machine.
“Our customers said they didn’t have a view into the machines once they were sold and out in the field. Here’s the thing, you shouldn’t talk about big data before you understand the little data. Sometimes it is the smallest bits of data that provide the biggest breakthroughs,” says Livesay. “It only took a couple of weeks for the manufacturer of a wood chipper to realize that dull blades resulted in slower production of wood chips and significantly lower yields. Once the blades were replaced more often, the yields remained high, increasing the output and revenue for the OEM’s customer. This is a real-world example of small data providing big results,” explains Livesay.
Competition is tough in the heavy equipment industry. There are a few big players and then there’s everyone else. In fact, 96 percent of all manufacturers are small and medium businesses, yet they are creating 50 percent of the output. When they make investments, it needs to deliver significant business value.
“To remain competitive, OEMs need to continuously improve the machines they build – especially the smaller OEMs that are competing with the big guys. A company we work with builds pile drivers,” begins Livesay. “Once monitoring the machines, the manufacturer saw there were big pressure spikes at the end of the cycles. They learned that the machine operators were throwing the machines into full reverse when they reached the prescribed depth, causing the pressure spikes. Knowing this allowed them to improve the design of their system and add safety features to their machines. Ultimately, this reduced the number of service calls due to failures, ensured replacement parts were on order when needed and decreased overall warranty costs for the OEM,” says Livesay.
“A cement trowel company used the data to realize they could reduce the engine size of the machine and therefore create a hybrid product line. It also meant they could deliver the first true 12-foot blade with less torque. This company is now completely changing the industry,” describes Livesay.
Machines improving with age sounds counter-intuitive. Afterall, doesn’t everything with wear and tear deteriorate over time? Now with software updates and real-world information, machines can actually improve with age.
“We are taking a play from the Tesla playbook. The Tesla you purchased three years ago is actually a better vehicle than it was when you purchased it. This is because of the constant updates the automotive company is feeding to its vehicles that are already on the road,” explains Livesay.
“We saw the opportunity to do the same for industrial and heavy equipment. A company that manufactures log stackers experienced this benefit in real time. We uploaded a software update overnight and the operator could see a difference immediately the next morning,” says Livesay.
New solutions must be easy to implement and work within existing systems and processes. Expecting customers will change their internal buying and procurement processes and take equipment out of the field along with dedicating existing or adding new workers to implement and learn a platform is unrealistic. By using the existing processes and sensors that were already on board the machines, elevāt saw quicker adoption of the new solutions.
“Our customers needed something that would work out-of-the-box and would work with existing systems. When elevāt first spun out of WIT, we picked a few customers and did deep-dives with them. We found that they were trying to digitize the business without realizing that’s what they were trying to do. Our customers wanted to do remote service updates with virtual technicians. They wanted to design better machines. More than anything, they wanted to remain relevant and compete with the big brands,” explains Livesay.
“But we knew how their businesses worked, and that elevāt needed to fit into their process and not vice versa. That’s why we designed elevāt to be easy to implement in minutes and not hours, days or even weeks like other solutions. It is also designed to provide immediate information and fit into the existing OEM and industrial end user business models. We built the solution so no custom IoT coding is necessary. You simply configure and deploy it. At the same time, we have made it easy to integrate elevāt with enterprise applications by providing open APIs that make it easy to deploy through the entire enterprise and expand into other business systems,” says Livesay.
The reality is heavy equipment needs to work harder. It needs to work in inhospitable, disconnected environments for operators that aren’t gentle to say the least. Plus, it is critical to take into account where the equipment will be operating. In the case of industrial equipment, it is often outside of the view of cell towers.
“The machines we are connecting operate in harsh environments with unpredictable connectivity. We took this into account from the start,” says Livesay. “The hardware needs to withstand everything nature and users can throw at it. Then, the software needs to be equally tough. From experience, we knew the software would need to do its job even when connectivity was spotty. When the machines are not connected to the cloud or a cell tower, we are still recording the data. Then when the machines reconnect, the data is compressed before it gets to the cloud and then it is slowly parsing out and synced. This means updates are faster, use less cloud resources and result in lower cellular costs,” explains Livesay.
When it comes down to it, IoT isn’t relevant to heavy equipment manufacturers and the companies that use the equipment. They care more about safety, utilization, output, mean time between failure and the operational life of the equipment. OEMs design machines to operate under the highest stress levels all of the time. Most of the machines are over-engineered because they need to design them to work for the worst-case scenarios. Companies like elevāt are changing this situation and helping OEMs design solutions that align with in-field realities.
“We can help the OEMs design better machines that have better output, better safety and better utilization. Our applications help them curb warranty return issues. The elevāt team is an extension of the OEM’s CTO office. We provide support for developing a technology road map, solutions on new control systems and intelligent maintenance. With elevāt, the right people can subscribe to the machines and get real time data, reports and dashboards. But, what is even more important, they can determine exactly where improvements can be made that will have an immediate positive impact on their customers’ businesses. This is true business value,” concludes Livesay.
There’s an even bigger benefit that will be realized within an industry that isn’t quick to jump into new technologies. Today, the supply chain for heavy equipment manufacturers has a lot of inefficiencies. Now, as data is being shared across the ecosystem, substantial efficiencies between the OEM, distributor, integrator and industrial end user can be realized. It’s an exciting view into the future.
Learn more about elevāt and its industry-leading industrial IoT applications by visiting elevat-iot.com.
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