Industry 4.0 is here. Technologies like artificial intelligence (AI), machine learning (ML) and the Internet of Things (IoT) are developing, and the market is starting to show signals of adoption. Being on the frontline of this movement, however, can also be quite challenging. This raises the question: what moves companies to take the leap? What challenges are they facing and what opportunities do they see? To answer these questions, we’ve interviewed innovative companies that have already taken the first steps toward Industry 4.0.
Second in the series is Davey Water Products
From their base in Australia and New Zealand, Davey is an international water products company who design, build and sell products used to transfer, conserve, treat and filter water.
Their mission is to help protect and enhance people’s lives with water. From farm water supply to protecting people and their assets from fire and flood, Davey has been offering dependable and innovative water solutions since 1934. Davey continuously keep an eye out for emerging technologies and when they received a tempting offer to implement IoT from Widget Brain, they gracefully accepted. When asked why, Joel Gresham, General Manager Innovation for Davey, explained that they have been wanting to modernize the 80 year old business for quite some time.
To be able to make that transformation, Davey have shifted focus from selling water equipment to selling water management solutions to provide customers with water whenever and where-ever they need it. “Obviously, digitization, connectivity and data information comes with a very important role to be able to provide that service.” Gresham describes IoT and other technologies as ‘enablers’ as it allows them “to solve old problems in new ways,” but also gives them a sustainable competitive advantage. In his explanation, Gresham mentioned that many Australian manufacturing companies have ceased to exist. “It has been a combination of things, but overall they weren’t competitive with global competition. Imported products that are considerably cheaper can erode the value of local manufacturing, especially if the quality of the imported product is almost as good as its equivalent. That’s why we have a focus to add more value to our products for our customers and provide a significantly better service to them.”
Davey focuses on adding value to their products driven by customer input. “Do they ask us for new technologies? Some do, sure. Some do say: “Why is there no app for this?” or “Why can’t I do this the same way I book a flight on a plane?”, that illustrates how some of their customers are aware of new technologies and proactively asking for them. However, not all customers feel this way. Therefore, Davey understands the need to demonstrate the value of new technologies to customers “in a form that doesn’t scare them or gets overly complicated. Keeping the message pretty simple and clear is obviously important.”
The conversations Davey held with their customers resulted in a new service product called MonsoonTM IQ. This booster system comes with their latest pump and features an intuitive touchscreen with remote monitoring and control. Connecting it to the cloud also allows optimisation for the pressure boosting applications of the system. MonsoonTM IQ gives real time notifications and insights on water management data, including failures and water and energy consumption. This implementation of IoT (sending historic and real time data to the cloud) allows both Davey and their customers to gain a better understanding of their pumps and systems. The value is driven by time, money and environmental savings.
Proving value to the customers, however, isn’t Davey’s biggest challenge. Gresham addresses the need to transition more of the business to a service model. One of the reasons he gives is that the manufacturing of water pumps is becoming commoditized: “It’s important that we look to provide much more than just a pump to our customers.”
In his explanation, he looks further down the line and mentions the additional services they can provide to customers. An extension on the current offering is predictive analytics, which enables the prediction of future performance of the pumps and also corresponding maintenance requirements. “Davey are turning it around by being able to schedule maintenance or predict value, or provide a service that basically guarantees the pump or, ultimately, guarantees the water supply.” said Gresham.
In the approach to sell services, rather than a product, Gresham described the internal difficulties. “You can’t expect a sales guy to go from selling a product that can sit on a shelf to a product that is more customized, customer centric, and quite technical. It’s a slow transition and we’re slowly developing this capability in the business. It has been taking a little bit of time.” To accelerate this, they plan to pitch the service business model to bigger customers, simply because corporate customers are more dedicated and open to these service fees. Their strategy is to roll this out to smaller consumers when the service business model becomes more familiar to Davey and their customers.
Gresham believes that the service business model will be an important part of the future of Davey and that it works well now in water treatment projects. Even though he sees a positive future for the service model, he is also brutally honest saying that “At the same time, it’s so much easier for our business to continue to sell products. So we’re kind of in this little interesting time of having to wrap up a service offering to make it look like a product and try to transition a little bit quicker. It’s easy to say: ‘move to services’. But it’s a lot more difficult than people think.”
Even though the transformation is slower than they expected and the process is difficult, Davey has been rolling out IoT in more of their products and service offerings. They have for example developed the Davey Remote Start Firefighter®, which allows remote monitor and control of water transfer systems around properties and farms. On top of that, they have also implemented a new technology into one of their newest products: the Davey TankSense™, which is the first AI-driven monitoring and control app for tank water management.
Along the lines of IoT and Industry 4.0, Davey is laying the foundation for their manufacturing process and how to do that smarter: “The factory does a great job of keeping modern and lean, and this will need to continue as we start to look at what a smart factory will look like and what products it produces.” Whether it all turns out the way Davey wants or not, Gresham knows one thing for sure: “The only thing we can really rely on, is making sure that we’re still keeping our customers happy and we’re focused on solving their main problems and frustrations. That we’re continuing to provide water where it’s needed.”
This content is owned by Widget Brain and written in collaboration with Davey Water Products. Widget Brain is a software company specialised in algorithms, machine learning and IoT for the Industrial Equipment industry, Retail, and Maritime. All Davey algorithms are run on the Algorithm Factory for automatic training, running and managing. Learn more about Widget Brain and the Algorithm Factory here.
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