Data-driven business models Equipment-as-a-service: Digitised tools

From Hendrik Härter

Specialist tools in mechanical engineering are expensive. Why not pay a usage-based fee? How a data-driven business model works with the example of a torque spanner.

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Specialist tools are expensive and not always affordable for small businesses. Digitised tools can be paid for depending on use.
Specialist tools are expensive and not always affordable for small businesses. Digitised tools can be paid for depending on use.
(Source: free stock photos from www.picjumbo.com / Pixabay )

The underlying idea of Industry 4.0 is to build individual products for customers at the price of mass-produced goods. Various tools and technical solutions such as networked sensors or artificial intelligence help in this. Financing should not be overlooked in the process. A concrete example: modern torque spanners are equipped with sensitive sensor technology and are therefore expensive tools in everyday industrial use. They can be used, for example, to record information about torques, screw positions, tolerances and their own calibration status.

All this data can be stored as historical data or used in real time to optimise work processes or for usage-based billing. It is possible to generate added value at all stages of the value chain: End customers receive legally compliant documentation about the work performed, employees are safely guided in their activities, tool owners or manufacturers can centrally control tool and calibration management. The examples show how data can be used and monetised if it is available online in real time.

Cloud-based computing and augmented reality user guidance

The IoT specialists at Codestryke have developed a sophisticated application for cloud-based data processing in their cooperation project with Stahlwille. The data from the torque spanner is transferred via gateway to the Siemens Mindsphere IoT operating system and Stahlwille's DAPTIQ cloud environment. Communication takes place via narrowband IoT. The long-range standard allows data to be transmitted reliably under difficult conditions.

Real-time data can be evaluated and processed in the DAPTIQ cloud. Communication is bidirectional: information that is fed into a customised production planning and control system can be analysed and compared there, and faulty bolting can be detected and corrected during the ongoing process. With the capabilities offered by augmented reality (AR), user errors can be reduced even further. If the instrument needs to be calibrated or is working at its tolerance limit, the corresponding steps are triggered automatically.

Great benefits versus large investments

These great benefits are offset by large investments. The financial outlay for new tools is considerable and often represents an insurmountable hurdle, especially for smaller companies. However, if the tools are not purchased but rented for a usage-based fee, the business case of digitalisation pays off.

“With the Equipment-as-a-Service (EaaS) remuneration model, we want to ensure that no company is left behind in digitalisation,” says David Schoenen, Head of Product Management at Stahlwille, describing a financing model that does not strain liquidity. Similar to car leasing, it is not the tool that is paid for, but its use. This completely changes investment costs into operating costs, which improves cash flow as well as planning reliability and minimises risks.

“The only difference is that with torque spanners, the customer does not pay per kilometre, but per click - the typical sound when the screw is tightened to the correct value,” explains Philipp Mayer, Managing Director of Codestryke. For the IoT expert, turning the click into a billable quantity involved some technical effort, “but the greater challenge was to create a holistic concept of technology, financing and billing together with all those involved”.

Industrial data-based business models

When implementing the application, including equipment management, deployment planning, maintenance and automated billing, Codestryke was able to draw on its own IoT modules, which were adapted to the specific requirements in the course of the project, but can ultimately be adapted to any industry and billing method:

“The technical basis is there, but when it comes to the details of an equipment-as-a-service concept, customisation is critical to success.” With the digitised torque spanner together with benefit-based billing, Stahlwille and Codestryke have created a blueprint for data-based business models in the industry, which no longer centre on the product itself, but on the value of an entire bundle of services that can only be realised and billed at all in a digital world.

External link: Codestryke

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