Servitization in a construction machinery industry by using M2M and cloud computing systems

Servitization is a new competitive strategy for companies to create a differentiation advantage in a growing number of industries on a global scale. Also, applications of information technology in manufacturing have been organized to accomplish such servitization. Cloud computing is particularly emerging as one of the major enablers for manufacturers to transform their business models from being product oriented to being service oriented. Moreover, implementations of typical machine-to-machine (M2M) communication systems are sending information on the status of machines to servers via the Internet that monitors and controls machines. This M2M has been utilized in the servitization of manufacturing companies such as those involving healthcare, vehicular telematics, utilities (smart grid), and maintenance (e.g., elevators and construction machines). Komatsu Ltd.’s Komatsu Tracking System (KOMTRAX) and Hitachi Construction Machine (HCM) Co.’s Global e-Service, which are information systems supporting services for construction machines, are successful examples of applying M2M. However, there are still three issues related to M2M regarding servitization. 1. Investment strategies for information systems from the viewpoint of returns 2. Suitable information infrastructures to expanding their services 3. Suitable services by integrating M2M systems and existing enterprise business information systems. Utilization of cloud computing provides suitable solutions to these issues because cloud computing can enhance timely interactions between providers and customers, and help providers to employ suitable information services depending on their business situations. Therefore, cloud computing can change the relationship with customers and co-create personalized values for customers. Such information service infrastructures using cloud computing can help manufacturers to accelerate servitization processes and create a competitive business model. The aim of this research is to prove this thesis by using the case study of HCM Co.’s Global e-Service as a successful example of integrating M2M and cloud computing, which utilizes Hitachi’s Trade Winds on eXtranet-21 (TWX- 21) as a cloud computing service infrastructure.