Electricity, we switch the power on and we have lights. In manufacturing electricity is a key cost driver. Managing electricity can lead to sustainable cost advantages over competitors.
The industry leader in electronic test tools – tools used to understand electrical loads, track electrical usage and troubleshoot motors – Fluke, a wholly owned subsidiary of Fortive, Inc., has provided the industry with handheld devices that can record and analyze the electrical usage in various applications. In today’s ever connected world, many clients have asked Fluke to create a stationary device that can transmit real-time the electrical condition of their machines to continuously analyze them . Fluke has responded with their first ever Fluke Connect system.
This system enables a company to purchase multiple energy analyzers from Fluke, connect them wirelessly to a data warehouse and continuously log information. In addition, it allows the companies that have connected their equipment’s to have a history, perform analysis and reduce breakdowns. According to Fluke, Fluke’s Condition Based Monitoring allows users to :
- Issue work orders immediately within the system, complete with essential equipment data
- Better plan for and make more efficient use of scheduled downtime
- Plan ahead for parts procurement, especially for expensive parts or those with long lead times
Additionally, constant monitoring of an asset allows companies (Fluke’s customers) to improve their preventive maintenance practices which has high returns on investment .
Fluke’s Traditional Business Model:
Fluke has been the industry leader in providing test equipment for industry including electrical power analyzers, infrared cameras, power quality meters and other handheld tools used by plant engineers and maintenance individuals to maintain assets. Most of Fluke’s product offerings are hand-held devices that capture data and allow a plant engineer to analyze while the device is connected to the asset.
Fluke’s New Business Model:
By entering the Condition Based Monitoring software industry Fluke is not only adding software to its product line but also enabling it to sell multiple sensors to factories that want to continuously monitor their assets. These sensors are stationary sensors which will allow Fluke to sell additional hardware units to facilities, hence increasing revenues.
Fluke’s way forward:
Fluke identified a trend of industrial companies monitoring their existing assets . As companies started to use stationary sensors connected to the internet this posed a risk to Fluke’s hand-held electrical testing units. Capitalizing on Fluke’s name in the industry, Fluke has ventured into remote data acquisition from its stationary units to create a condition based monitoring tool.
Fluke must continue building its Condition Based Monitoring tool to store and capture more data from more sensors and machines. One way forward is to pair up with companies such as OsiSoft or Inductive Automation to gain access to established data historians to connect to machine’s PLC’s that are already using sensors. – Data Historians collect data from machines managed by PLC’s and SCADA systems into a central database.
Being able to couple Fluke’s knowledge on electrical power quality and measurement, with the knowledge of different companies in industrial data acquisition will allow Fluke to create a compelling product offering for its industrial customers.
I envision Fluke building out its capabilities in Condition Based Monitoring by leveraging data acquisition of its electrical power measurement tools and combining this with more data that may be coming from machine PLC’s enabled by a data historian. Furthermore, having all data in one place will allow Fluke to become the Condition Based Monitoring tool in industrial companies. Having data all in one location, being able to detect anomalies, alert users and create work orders, all leading to the goal of predictive maintenance.
Potential New Revenue Model:
When selling, hand held electrical testers, Fluke was only able to price a single unit and sell it to the market.
With this new Condition Based Monitoring tool, Fluke can move to a recurring revenue model. This model can be a model in which Fluke prices the service based on how many machines a customer is tracking. Fluke can price this on a per year or per month contract and have a recurring revenue from customers.
 Fortive CEO visit to HBS “Fortive’s IOT Strategy” on Nov. 1, 2016
 Fluke Corporation. 2016. Fluke Corporation. [ONLINE] Available at: http://a.fluke.com/IG-NA-SAAS-3500JP-LP-1-A?lcid=66292e68-69a7-e611-80c2-00155dfe6b13&lrpf=SAAS&plt=200000000&cra=100000000&scl=4452&redir=http://en-us.fluke.com/products/contests-and-promotions/thank-you-3500-jr.html&gclid=CPPa6dP9stACFYhKDQodVYkKeA. [Accessed 18 November 2016].
 US Department of Energy, Federal Energy Management Program, Operations and Maintenance Best Practices, section 5.4
 McKinsey & Company. 2016. Unlocking the potential of the Internet of Things | McKinsey & Company . [ONLINE] Available at: http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-internet-of-things-the-value-of-digitizing-the-physical-world. [Accessed 18 November 2016].