M. Finotto: The role of IoT is pretty central, even if the rate of adoption today is still at an initial stage. I think that it’s clear to all major companies that through the digital transformation it will be possible to have higher efficiency in manufacturing. This is the main reason that is pushing the transformation forward. The possibility to have a factory producing goods at lower costs is really a powerful driver, which attracts also companies that are not traditionally technology oriented. Something new is really happening now and we are moving from theory to facts. IoT is becoming more and more important and requested to keep the competitive advantage. If you wait to be forced to make the transformation happening in your plant, then you really risk to miss an opportunity to compete.
The progress is evident today compared to one or two years ago, but the thing is that the transformation is not only technological but also – and mainly – cultural. This is much slower and more complicated process as changing people’s mindset takes time. The technology is ready, but the mindset isn’t ready yet.
Also, from a cost-wise point of view, the relation between the investment and the return on investment is still not evident and a lot needs to be proved. Companies are implementing the technology to test its added value. For sure, the top-bottom approach is much riskier and more expensive, while with the bottom-up strategy you can start transforming just little parts of your processes and really appreciate and understand the value behind IoT. In this way, you can really assess if the benefits are good enough without a huge investment.
M. Finotto: At Parker Hannifin, our digital strategy consists of two main pillars. The first is IoT for internal use. We use cutting-edge technologies in our own plants to push forward the productivity and efficiency of our factories. The second pillar is based on the use of IoT technology in our products. As a component manufacturer, Parker Hannifin thinks that in order to help OEM digitalize their plants and machines, it’s essential to supply not only components but also digital parts able to provide data. In addition to that, we really need to use open standards to integrate the components in the machine, supply real time data and getting analytics from the data produced.
M. Finotto: IoT is a risk or a threat if you don’t embrace it, simply because it’s an opportunity to be more competitive and expand the portfolio of solutions and services, with the benefit of increasing the business and improving margins. Some people consider it just as a hype or something that is not going to last, even if it’s growing and getting momentum. But whether we want it or not, the digital transition will happen anyway.
M. Finotto: The challenge is first cultural and we need to start changing the mindset inside our own companies. Parker Hannifin has launched some internal initiatives to improve the understanding of IoT. We are investing on people to enhance their skills and know-how. The other big challenge is to keep up with your performance, which is something never taken for granted.