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Information technology is revolutionizing products. Once composed solely of mechanical and electrical parts, products have become complex systems that combine hardware, sensors, data storage, microprocessors, software, and connectivity in myriad ways. Information technology is revolutionizing products, from appliances to cars to mining equipment. Products once composed solely of mechanical and electrical parts have become complex systems combining hardware, sensors, electronics, and software that connect through the internet in myriad ways.
The changing nature of products is disrupting value chains, argue Michael Porter and PTC CEO James Heppelmann, and forcing companies to rethink nearly everything they do, from how they conceive, design, and source their products; to how they manufacture, operate, and service them; to how they build and secure the necessary IT infrastructure.
Smart, connected products raise a broad set of new strategic choices for companies about how value is created and captured, how to work with traditional partners and what new partnerships will be required, and how to secure competitive advantage as the new capabilities reshape industry boundaries. Smart, connected products offer exponentially expanding opportunities for new functionality, far greater reliability, much higher product utilization, and capabilities that cut across and transcend traditional product boundaries.
The changing nature of products is also disrupting value chains, forcing companies to rethink and retool nearly everything they do internally. These new types of products alter industry structure and the nature of competition, exposing companies to new competitive opportunities and threats. They are reshaping industry boundaries and creating entirely new industries. Smart, connected products raise a new set of strategic choices related to how value is created and captured, how the prodigious amount of new and sensitive data they generate is utilized and managed, how relationships with traditional business partners such as channels are redefined, and what role companies should play as industry boundaries are expanded.
Yet this phrase is not very helpful in understanding the phenomenon or its implications. The internet, whether involving people or things, is simply a mechanism for transmitting information. Companies must look beyond the technologies themselves to the competitive transformation taking place. This article, and a companion piece to be published soon in HBR, will deconstruct the smart, connected products revolution and explore its strategic and operational implications.
Twice before over the past 50 years, information technology radically reshaped competition and strategy; we now stand at the brink of a third transformation.
Before the advent of modern information technology, products were mechanical and activities in the value chain were performed using manual, paper processes and verbal communication. The first wave of IT, during the s and s, automated individual activities in the value chain, from order processing and bill paying to computer-aided design and manufacturing resource planning. The productivity of activities dramatically increased, in part because huge amounts of new data could be captured and analyzed in each activity.
This enabled coordination and integration across individual activities; with outside suppliers, channels, and customers; and across geography. It allowed firms, for example, to closely integrate globally distributed supply chains. The first two waves gave rise to huge productivity gains and growth across the economy.
While the value chain was transformed, however, products themselves were largely unaffected. Now, in the third wave, IT is becoming an integral part of the product itself. Embedded sensors, processors, software, and connectivity in products in effect, computers are being put inside products , coupled with a product cloud in which product data is stored and analyzed and some applications are run, are driving dramatic improvements in product functionality and performance.
Massive amounts of new product-usage data enable many of those improvements. Another leap in productivity in the economy will be unleashed by these new and better products. In addition, producing them will reshape the value chain yet again, by changing product design, marketing, manufacturing, and after-sale service and by creating the need for new activities such as product data analytics and security. This will drive yet another wave of value-chain-based productivity improvement.
The third wave of IT-driven transformation thus has the potential to be the biggest yet, triggering even more innovation, productivity gains, and economic growth than the previous two. As with the internet itself, smart, connected products reflect a whole new set of technological possibilities that have emerged. But the rules of competition and competitive advantage remain the same.
Navigating the world of smart, connected products requires that companies understand these rules better than ever. Smart components amplify the capabilities and value of the physical components, while connectivity amplifies the capabilities and value of the smart components and enables some of them to exist outside the physical product itself.
The result is a virtuous cycle of value improvement. In a car, for example, these include the engine block, tires, and batteries. Smart components comprise the sensors, microprocessors, data storage, controls, software, and, typically, an embedded operating system and enhanced user interface. In a car, for example, smart components include the engine control unit, antilock braking system, rain-sensing windshields with automated wipers, and touch screen displays.
In many products, software replaces some hardware components or enables a single physical device to perform at a variety of levels. Connectivity components comprise the ports, antennae, and protocols enabling wired or wireless connections with the product. Connectivity takes three forms, which can be present together:. Connectivity serves a dual purpose.
First, it allows information to be exchanged between the product and its operating environment, its maker, its users, and other products and systems. Second, connectivity enables some functions of the product to exist outside the physical device, in what is known as the product cloud. To achieve high levels of functionality, all three types of connectivity are necessary. Smart, connected products are emerging across all manufacturing sectors. This alerts utility control centers to possible overload conditions, allowing adjustments that can prevent blackouts before they occur.
In consumer goods, Big Ass ceiling fans sense and engage automatically when a person enters a room, regulate speed on the basis of temperature and humidity, and recognize individual user preferences and adjust accordingly. Why now? An array of innovations across the technology landscape have converged to make smart, connected products technically and economically feasible.
These include breakthroughs in the performance, miniaturization, and energy efficiency of sensors and batteries; highly compact, low-cost computer processing power and data storage, which make it feasible to put computers inside products; cheap connectivity ports and ubiquitous, low-cost wireless connectivity; tools that enable rapid software development; big data analytics; and a new IPv6 internet registration system opening up trillion trillion trillion potential new internet addresses for individual devices, with protocols that support greater security, simplify handoffs as devices move across networks, and allow devices to request addresses autonomously without the need for IT support.
Cutting across all the layers is an identity and security structure, a gateway for accessing external data, and tools that connect the data from smart, connected products to other business systems for example, ERP and CRM systems. Smart, connected products require companies to build and support an entirely new technology infrastructure. This technology enables not only rapid product application development and operation but the collection, analysis, and sharing of the potentially huge amounts of longitudinal data generated inside and outside the products that has never been available before.
Building and supporting the technology stack for smart, connected products requires substantial investment and a range of new skills—such as software development, systems engineering, data analytics, and online security expertise—that are rarely found in manufacturing companies. Intelligence and connectivity enable an entirely new set of product functions and capabilities, which can be grouped into four areas: monitoring, control, optimization, and autonomy.
Each capability is valuable in its own right and also sets the stage for the next level. For example, monitoring capabilities are the foundation for product control, optimization, and autonomy. A company must choose the set of capabilities that deliver its customer value and define its competitive positioning. The capabilities of smart, connected products can be grouped into four areas: monitoring, control, optimization, and autonomy.
Each builds on the preceding one; to have control capability, for example, a product must have monitoring capability. Using data, a product can alert users or others to changes in circumstances or performance.
This data has important implications for design by reducing overengineering, for example , market segmentation through the analysis of usage patterns by customer type , and after-sale service by allowing the dispatch of the right technician with the right part, thus improving the first-time fix rate. Monitoring data may also reveal warranty compliance issues as well as new sales opportunities, such as the need for additional product capacity because of high utilization.
In some cases, such as medical devices, monitoring is the core element of value creation. Monitoring capabilities can span multiple products across distances. Joy Global, a leading mining equipment manufacturer, monitors operating conditions, safety parameters, and predictive service indicators for entire fleets of equipment far underground.
Joy also monitors operating parameters across multiple mines in different countries for benchmarking purposes. Smart, connected products can be controlled through remote commands or algorithms that are built into the device or reside in the product cloud.
Control through software embedded in the product or the cloud allows the customization of product performance to a degree that previously was not cost effective or often even possible. The same technology also enables users to control and personalize their interaction with the product in many new ways. For example, users can adjust their Philips Lighting hue lightbulbs via smartphone, turning them on and off, programming them to blink red if an intruder is detected, or dimming them slowly at night.
Doorbot, a smart, connected doorbell and lock, allows customers to give visitors access to the home remotely after screening them on their smartphones. The rich flow of monitoring data from smart, connected products, coupled with the capacity to control product operation, allows companies to optimize product performance in numerous ways, many of which have not been previously possible.
Smart, connected products can apply algorithms and analytics to in-use or historical data to dramatically improve output, utilization, and efficiency.
In wind turbines, for instance, a local microcontroller can adjust each blade on every revolution to capture maximum wind energy. And each turbine can be adjusted to not only improve its performance but minimize its impact on the efficiency of those nearby. Real-time monitoring data on product condition and product control capability enables firms to optimize service by performing preventative maintenance when failure is imminent and accomplishing repairs remotely, thereby reducing product downtime and the need to dispatch repair personnel.
Even when on-site repair is required, advance information about what is broken, what parts are needed, and how to accomplish the fix reduces service costs and improves first-time fix rates. Diebold, for example, monitors many of its automated teller machines for early signs of trouble.
Often these can occur remotely, via software. Monitoring, control, and optimization capabilities combine to allow smart, connected products to achieve a previously unattainable level of autonomy. At the simplest level is autonomous product operation like that of the iRobot Roomba, a vacuum cleaner that uses sensors and software to scan and clean floors in rooms with different layouts.
Autonomy not only can reduce the need for operators but can improve safety in dangerous environments and facilitate operation in remote locations. Autonomous products can also act in coordination with other products and systems. The value of these capabilities can grow exponentially as more and more products become connected.
For example, the energy efficiency of the electric grid increases as more smart meters are connected, allowing the utility to gain insight into and respond to demand patterns over time. Ultimately, products can function with complete autonomy, applying algorithms that utilize data about their performance and their environment—including the activity of other products in the system—and leveraging their ability to communicate with other products.
Human operators merely monitor performance or watch over the fleet or the system, rather than individual units. Equipment is monitored continuously for performance and faults, and technicians are dispatched underground to deal with issues requiring human intervention. To understand the effects of smart, connected products on industry competition and profitability, we must examine their impact on industry structure.
In any industry, competition is driven by five competitive forces: the bargaining power of buyers, the nature and intensity of the rivalry among existing competitors, the threat of new entrants, the threat of substitute products or services, and the bargaining power of suppliers. The composition and strength of these forces collectively determine the nature of industry competition and the average profitability for incumbent competitors.
Industry structure changes when new technology, customer needs, or other factors shift these five forces. Smart, connected products will substantially affect structure in many industries, as did the previous wave of internet-enabled IT. The effects will be greatest in manufacturing industries. Smart, connected products will have a transformative effect on industry structure. The five forces that shape competition provide the framework necessary for understanding the significance of these changes.
Smart, connected products dramatically expand opportunities for product differentiation, moving competition away from price alone.
ECI measures the knowledge intensity of an economy by considering the knowledge intensity of the products it exports. PCI measures the knowledge intensity of a product by considering the knowledge intensity of its exporters. This circular argument is mathematically tractable and can be used to construct relative measures of the knowledge intensity of economies and products see methodology section for more details. ECI has been validated as a relevant economic measure by showing its ability to predict future economic growth see Hidalgo and Hausmann , and explain international variations in income inequality see Hartmann et al. Countries Products. No Filter Countries Products Visualizations.
Search NAICS descriptions to find the correct code
When completing form T, Statement of Business or Professional Activities , form T, Statement of Fishing Activities , or form T, Statement of Farming Activities , you have to enter an industry code that corresponds to your main business activity. If your business has more than one activity, use the code that most closely describes your main business activity. For example, you might operate a bookstore in which you sell postage stamps. If none of the generalized industry codes closely describes your main business activity, you can get a suitable code from the complete list of North American Industry Classification System codes NAICS maintained by Statistics Canada. If you are filing your return electronically, you have to use the industry codes from your tax preparation software. Only use the industry codes listed below if you are filing your General Income Tax and Benefits Return on paper.
How Smart, Connected Products Are Transforming Competition
Establishments primarily engaged in manufacturing alkalies and chlorine. Establishments primarily engaged in mining natural alkalies are classified in Mining, Industry Alkalies, not produced at mines Caustic potash Caustic soda Chlorine compressed or liquefied Potassium carbonate Potassium hydroxide Sal soda washing soda Soda ash not produced at mines Sodium bicarbonate not produced at mines Sodium carbonate soda ash not produced at mines Sodium hydroxide caustic soda Washing soda sal soda. Establishments primarily engaged in manufacturing industrial gases including organic for sale in compressed, liquid, and solid forms. Establishments primarily engaged in manufacturing fluorine and sulfur dioxide are classified in Industry ; those manufacturing household ammonia are classified in Industry ; those manufacturing other ammonia are classified in Industry ; those manufacturing chlorine are classified in Industry ; and those manufacturing fluorocarbon gases are classified in Industry Distributors of industrial gases and establishments primarily engaged in shipping liquid oxygen are classified in Wholesale Trade, Industry Acetylene Argon Carbon dioxide Dry ice solid carbon dioxide Gases, industrial: compressed, liquefied, or solid Helium Hydrogen Neon Nitrogen Nitrous oxide Oxygen, compressed and liquefied.
Account Options Fazer login. United States. Bureau of the Census. Food and kindred products. Rayon and allied products. Sausages prepared meats and other meat. Rubber products not elsewhere classified. Tobacco manufactures.
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The machine industry or machinery industry is a subsector of the industry , that produces and maintains machines for consumers, the industry, and most other companies in the economy. This machine industry traditionally belongs to the heavy industry. Nowadays, many smaller companies in this branch are considered part of the light industry. Most manufacturers in the machinery industry are called machine factories. The machine industry is a subsector of the industry that produces a range of products from power tools , different types of machines , and domestic technology to factory equipment etc. On the one hand the machine industry provides:. These means of production are called capital goods , because a certain amount of capital is invested. Much of those production machines require regular maintenance, which becomes supplied specialized companies in the machine industry.
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Alphabetical NCCI Code List
Information technology is revolutionizing products. Once composed solely of mechanical and electrical parts, products have become complex systems that combine hardware, sensors, data storage, microprocessors, software, and connectivity in myriad ways. Information technology is revolutionizing products, from appliances to cars to mining equipment. Products once composed solely of mechanical and electrical parts have become complex systems combining hardware, sensors, electronics, and software that connect through the internet in myriad ways. The changing nature of products is disrupting value chains, argue Michael Porter and PTC CEO James Heppelmann, and forcing companies to rethink nearly everything they do, from how they conceive, design, and source their products; to how they manufacture, operate, and service them; to how they build and secure the necessary IT infrastructure.
Product Complexity Rankings (PCI)
National Acid Mfg. Oregon Addressing or Mailing Co. National Agricultural Machinery Mfg.
По мере того как сознание возвращалось, свет в комнате становился все ярче и ярче и в конце концов все вокруг оказалось залитым мягким сиянием еще по-утреннему прохладного солнца, струящего свои лучи сквозь ставшие теперь прозрачными стены. Олвин нежился в блаженной полудреме, вспоминая события минувшего дня, и размышлял над тем, какие же силы он привел теперь в С тихим мелодичным звуком одна из стен стала подниматься, сворачиваясь при этом настолько сложным образом, что сознание было не в силах схватить.
Через образовавшийся проем в комнату ступил Хилвар. Он глядел на Олвина с выражением удовольствия и вместе с тем озабоченности.
Он не заметил никакого движения, но внезапно с неба обрушилась лавина самых потрясающих звуков из всех, когда-либо сотворенных человеком,-- это был долгий гром падающего воздуха: миля за милей он обрушивался в туннель вакуума, в мгновение ока просверленный в атмосфере. Джизирак не в силах был сдвинуться с места, даже когда последние отголоски этого грома замерли, потерявшись в пустыне.
Озябни он -- Алистра отдала бы ему свой плащ, и он принял бы эту помощь как нечто само собой разумеющееся. Ветер подталкивал их в спину, идти было даже приятно, и вскоре они добрались до конца туннеля.
Широкая решетка из резного камня преградила им путь -- и кстати, поскольку они стояли теперь над пустотой. Огромное вентиляционное отверстие открывалось прямо на отвесной стене башни, и под ними зияла пропасть глубиной, по меньшей мере, в тысячу футов.