For manufacturers seeking inspiration and lessons for leaning into the Internet of Things and producing ROI with their efforts, Lexmark presents an encouraging case study.
Thanks to implementing a scheme that significantly advanced the capabilities of IoT connected to the printers it makes, Lexmark has achieved a 30% reduction in the number of times it must dispatch a repair technician to corporate customers compared with five years ago. That improvement has helped mitigate a labor crunch, among other benefits.
And the Lexington, Massachusetts-based company has learned so much from strengthening its IoT network across its one million connected, installed devices around the world that it has been able to package its capabilities in this arena and create a new line of revenues with what it calls the Optra IOT platform.
“The algorithms we’ve developed for our own printers actually translate well to non-printer devices, because the same concepts apply to other connected devices,” Demetrios Karathanasis, portfolio director for Optra IOT Solutions, told StrategicCFO360. “We have a medical-equipment customer, for instance, who was blown away by how fast we were able to translate their data, using our accelerators, into being deployed in their environment.”
Arguably, Lexmark had a head start on leveraging the possibilities of IoT because the company was created by the spinoff of the typewriter and printer division of IBM in 1991. “We had a vision more than 20 years ago around having a single IoT platform to connect our printers and provide advanced services to bring value to our customers and also Lexmark internally,” Karathanasis said. “We started to do IoT-like things before there was an Internet of Things.”
Starting with the impulse to provide better customer service and converging more lately with the need to reduce demands on human technicians, Lexmark created a miniature ecosystem within each printer that now includes about 100 data points which the machine continually communicates to the mother ship at the printer maker. They include motor speeds, cartridge torque, vibrations and toner-level alerts.
“It started where we began automating the process to replenish supplies, because toner is the lifeblood of the printing business,” Karathanasis said. “Then it got into being more predictive, developing sophisticated algorithms and getting into AI and machine-learning stuff, trying to truly predict failure before it impacts the customer.”
Printers, he explained, “are in mission-critical areas such as pharmaceutical labels, banking and health care. Down time has a big impact on our customers. And we needed to be more efficient in our service process, especially when it’s so distributed all over the world. It costs a lot to bring labor and parts to a site to repair a device.”
Lexmark has reduced its remote-fix rate now to 70% from much lower five years ago, resulting in that 30% cut in having to dispatch technicians. “That saves us millions of dollar a year,” Karathanasis said.
What’s more, all the data being generated by the IoT network is informing other important corporate functions, especially product optimization and development. “It’s even to the point where we have anomaly-detection algorithms in place from all that data in the field to provide an early-warning system to tell us there could be a problem arising, and maybe we need to do a firmware update to mitigate that problem for the field.”
Lexmark also has built on its IoT prowess by creating an “edge” device that provides its offerings to other companies, which has become the basis for Optra IOT Solutions business the company launched earlier this year.
“Our IoT platform processes data in real time, locally, over time and in the cloud,” Karathanasis explained. “We’re very encouraged by how this [business] is going. We have credibility, having done it ourselves, living and breathing it every day as a manufacturer. We’re not just a software company, we actually do it ourselves. We’re a manufacturer who understands these challenges.”