As Manufacturers Go Digital, Customer Value Expands

Every single day, I’m reminded that a digital revolution is taking place—from researching local coffee places on the dashboard of my car to ordering coffee on my mobile device—it’s clear that our lives are becoming more digitized. This is also apparent for the businesses and industries that manufacture the goods that we use everyday. In order to compete today, manufacturers must respond to complex and constantly changing demands from their customers. That requires the agility, rapid innovation, and fast execution that only digital manufacturing can deliver. Too many manufacturers, however, still lack these critical capabilities and suffer from fragmented and siloed organizational structures.

This was reinforced by new research from Cisco on the current and future state of digital disruption in manufacturing. The study included economic analysis, interviews with manufacturing industry thought leaders, and a survey of more than 600 senior leaders from 13 countries, representing both industrial machine builders and end-user manufacturers.

Our research confirmed that manufacturers get it. They understand that a digital revolution is taking place, and they want to be part of it. Seventy-nine percent believe that digital disruption will drive a moderate to major impact at their companies in the next three years. Moreover, they see digital technologies such as cloud, IoT, and analytics as having the biggest impact on their production — not more manufacturing-centric technologies such as robotics and 3D printing.

However, in terms of driving new value, many are faltering. Their service strategies, for example, are seen as a key opportunity for new revenue, but they are not driving expected levels of growth.

Digital business transformation is the solution, but it can’t be done in a piecemeal fashion; it must be implemented across the entire organization and beyond, throughout the ecosystem. Analytics, cloud, machine-to-machine connections, and collaboration tools all enable new opportunities for sharing data insights. Getting those insights to the people (or machines) who need them most, on the other hand, can be challenging. In this context, silos — between IT and operational technology (OT), engineering and design, and so forth — are the enemy to progress.

I’m hearing this first hand when I meet with our customers and partners around the world. As Joe Kann, vice president of global business development at Rockwell Automation, told us: “IT decision-makers and OT decision-makers frankly don’t have comfortable ways to talk to each other because they have different priorities.”

https://www.youtube.com/watch?v=GyRHrYT_HOw&feature=youtu.be

A seamless blend of such priorities will be essential to future competitiveness and rapid response to customer demands. This will require strong top-down leadership. To drive new service revenue, for example, the service journey and digital journey must converge. The process must be guided and supported from the C-suite.

Once the connected manufacturing organization begins to generate large new streams of raw data, that information must be analyzed, with the resulting insights reaching the people (and machines) who need them most — when and where they need them most. For example, if wear on a part is detected in a connected industrial machine, it will be critical to use predictive maintenance to identify the problem before it results in downtime.

Such fast execution demands a culture that encourages action and experimentation, while tolerating failure. Digital transformation empowers employees at all levels of the company hierarchy, while breaking down silos and bureaucratic barriers.

The end result is business outcomes such as improved customer engagement, new revenue streams, and reduced operating costs. Through connected machines, for example, an industrial machine builder can know exactly how its products are being used on the plant floor — even if that plant floor is a continent away. Data, analytics, cloud, and mobility enable manufacturers to understand their customers’ pain points, needs, and goals as never before. As silos dissolve and ecosystems expand, that information will be shared wherever it can drive value.

In short, an organization that is digitized can break through barriers and drive fast action and response. From the machine builder to the end user, it’s a win-win for all.