How IIoT data can power profitability in lean manufacturing

Patrick Moorhead of Pricefx

IIoT (Industrial Internet of Things) has ushered in a new era of efficiency and intelligence for the manufacturing industry. Enterprises are now generating an ocean of operational data, which if combined with other data inputs and deployed through new pricing technologies, could multiply the profitability impact of both lean manufacturing and overall business, says Patrick Moorhead, chief marketing officer, Pricefx AG.

Classically, the top down marching order from senior management is always,“Go make more sales.” Of course, everyone agrees on wanting more sales, except more sales will not necessarily produce more profitability (the real goal). An emerging range of new technologies utilising ML (machine learning), AI (artificial intelligence), visual CPQ (Configure Price Quote), and CAD-based digital marketing are allowing organisations to leverage growing data resources to achieve more profitable sales.

These types of data-driven pricing solutions have historically been extremely expensive propositions (multi-million dollar, multi-year investments). The new generation of cloud-based pricing technology allows for incremental and efficient adoption under SaaS (Software as a Service) business models. Long gone are the days of seven or eight figure on-premise hardware installations with 12+ month implementation timelines.

SaaS pricing optimisation platforms like Pricefx offer a solution for profit-based manufacturers who see the opportunity to leverage unique IIoT data resources. Such platforms maximise margin and profitability while maintaining a manageable and high efficiency OpEx investment strategy to accomplish the goals.

So much money is left on the table because manufacturers and sales representatives “price by gut” or tribal knowledge and assumptions of what the customer is willing to pay. These assumptions are often wrong, yet rarely tested. By using price optimisation, an objective and unbiased mathematical analysis determines how customers will respond to different prices for products and services through different channels. It also determines how to maximise profitability.

Process resistance to price optimisation should be expected since pricing authority is currently in disparate pockets across many enterprises. Similar to a Lean Six Sigma implementation, there will be resisters who wish to keep the status quo. They should be engaged in this conversation and have their concerns understood and prioritised; they can become champions of pricing optimisation when they understand and witness first-hand the positive impacts.

The IIoT data used in price optimisation is already accessible for mid-sized and larger manufacturing companies. The data collected from various points open up the possibility of pricing in new ways. Manufacturers can price based on consumption in real-time, take inventory into account to drive price changes, or even adjust pricing according to different parts of the day considering utilisation capacity in a plant, power grid, or other networks. Culling these data from sensors, contracts, surveys, transaction records, incorporating operating costs, add value extracted from big data.

Add more information from competition, economic indicators, promotional successes and failures, and seasonal conditions, much is learned that can be used to optimise prices, promotions, and profitability. Before the rapid data collation access with IIoT, too many markers were duplicated, incorrect, or missing.

Cleansing data and reliably gathering missing data is very expensive and no longer needed in many cases. The availability of real-time data from IIoT, coupled with a dynamic pricing platform, gives companies the ability to respond to changing market conditions and try new strategies, experiment and quickly see if they are working or not, rather than waiting for weeks or months to get the data back and conduct analyses.

The author is Patrick Moorhead, chief marketing officer, Pricefx AG

About the author

Patrick Moorhead has built a diverse 20-year career at the forefront of digital marketing and advertising, with roles spanning National and Global leadership positions at agencies including Razorfish and FCB, and senior strategic marketing, sales, and client management responsibilities at Catalina Marketing, Twitter, and most recent as CMO for Label Insight, Inc.

This diverse and unique background is a large part of why Moorhead is an ideal fit for his role as chief marketing officer at SaaS start-up Pricefx. In this role, he is responsible for all aspects of Brand Marketing and Communications, ranging from Public Relations & Press, Industry Relations, Paid Media, Event Marketing, Partnerships, Content Development, Sales Messaging and Collateral, and Social Media.

Comment on this article below or via Twitter: @IoTNow_OR @jcIoTnow


Nordic-powered Apple HomeKit with Thread smart air purifier captures and analyses air quality data

Posted on: September 28, 2022

Oslo, Norway – Connected appliances manufacturer, Sleekpoint Innovations, has released the ‘Purelle (AP2)’ under its Airversa brand, which specialises in creating air treatment products that improve the quality of the air we breathe. The smart air purifier takes advantage of Apple HomeKit with Thread Accessory Protocol.

Read more

IoT interoperability – Living the dream

Posted on: September 28, 2022

With the arrival of cost-effective Satellite IoT (SatIoT), Systems Integrators are rushing to meet the huge pent-up demand for global solutions that allow asset tracking across the 85% of the planet not covered by cellular networks. They are building fully connected IoT solutions, where mobile assets can be tracked as they move, connecting to an

Read more

9 IoT applications that will change everything

Posted on: September 1, 2021

Whether you are a future-minded CEO, tech-driven CEO or IT leader, you’ve come across the term IoT before. It’s often used alongside superlatives regarding how it will revolutionize the way you work, play, and live. But is it just another buzzword, or is it the as-promised technological holy grail? The truth is that Internet of

Read more

Which IoT Platform 2021? IoT Now Enterprise Buyers’ Guide

Posted on: August 30, 2021

There are several different parts in a complete IoT solution, all of which must work together to get the result needed, write IoT Now Enterprise Buyers’ Guide – Which IoT Platform 2021? authors Robin Duke-Woolley, the CEO and Bill Ingle, a senior analyst, at Beecham Research. Figure 1 shows these parts and, although not all

Read more

CAT-M1 vs NB-IoT – examining the real differences

Posted on: June 21, 2021

As industry players look to provide the next generation of IoT connectivity, two different standards have emerged under release 13 of 3GPP – CAT-M1 and NB-IoT.

Read more

IoT and home automation: What does the future hold?

Posted on: June 10, 2020

Once a dream, home automation using iot is slowly but steadily becoming a part of daily lives around the world. In fact, it is believed that the global market for smart home automation will reach $40 billion by 2020.

Read more

5 challenges still facing the Internet of Things

Posted on: June 3, 2020

The Internet of Things (IoT) has quickly become a huge part of how people live, communicate and do business. All around the world, web-enabled devices are turning our world into a more switched-on place to live.

Read more

What is IoT?

Posted on: July 7, 2019

What is IoT Data as a new oil IoT connectivity What is IoT video So what’s IoT? The phrase ‘Internet of Things’ (IoT) is officially everywhere. It constantly shows up in my Google news feed, the weekend tech supplements are waxing lyrical about it and the volume of marketing emails I receive advertising ‘smart, connected

Read more
IoT Newsletter

Join the IoT Now online community for FREE, to receive: Exclusive offers for entry to all the IoT events that matter, round the world

Free access to a huge selection of the latest IoT analyst reports and industry whitepapers

The latest IoT news, as it breaks, to your inbox