CEO Volkmar Denner says connected technology increases productivity in his company's factories.
I spent a couple of hours yesterday wandering the 2.2 million square feet of exhibit space at CES Las Vegas, looking at smart lights, smart washing machines, smart door bells, smart tooth brushes. (As it turns out, there are no stupid products at CES.)
If this extravaganza is any indication, the connected home is just around the corner. You’ll be able to control everything in your house from the screen of your smart phone.
But for all the gee-whiz gadgetry, I still had a hard time finding products whose use case felt compelling. I’m not yet convinced I need to change the color of my house lights while on vacation, or turn on the washing machine from work, or talk to my oven. This, no doubt, reflects a lack of imagination on my part. But I’m just not feeling it yet. One notable exception: the smart refrigerator, which lets you peak inside via smart phone from the grocery store to see what items you are missing.
If the case for the connected home is still shaky, though, the case for the connected factory is not. I spent some time with Volkmar Denner, CEO of Robert Bosch GmbH, who has put the Internet of Things at the center of his company’s strategy. Bosch makes an array of “smart” consumer products, is the world’s leading manufacturer of MEMS (Micro-Electro-Mechanical Systems) sensors, and provides a host of components for automobile makers. (Of course, in one unfortunate case, Bosch supplied Volkswagen with diesel engine software that turned out to be a little too smart for its own good.)
Denner also has pushed to remake his company’s 250 factories around the world using connected technology. His most advanced plant is in Homburg, Germany, which makes hydraulic components for cars. Denner says connected technologies have enabled that plant to increase productivity by 10% and reduce inventory via faster turnover by 30%. That’s smart.
I asked Denner how far Bosch is in realizing the full benefits of the Internet of Things – or “Industry 4.0”, as the Germans like to call it. On a scale of 1 to 10, he put it at 3, and said Bosch is still further ahead than most companies because of its ability to combine technology and manufacturing expertise. That leaves plenty of potential for widespread productivity gains in the decades ahead.
Bosch also deserves credit for making a major investment in research in these game-changing technologies. “We have 55,000 people in R&D,” Danner said, “and spend 10 percent of our sales on it.”
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