Digital disruption in manufacturing. By Phil Lewis
Digital transformation starts with a new approach to business. A report from Constellation Research says: “Digital transformation begins with design thinking, a methodology that unlocks solutions to questions that have not been asked before.”
Design thinking involves imagining business from the customers’ shoes and asking, “If I was our customer, what services would I want that I’m not getting? What could make my life easier?”
Meeting those needs entails changing internal business processes, improving existing services, adding new services, and new ways for customers to engage. It’s going to involve adopting new, disruptive technologies—advanced analytics, omnichannel commerce, social, mobile, Internet of Things (IoT), and more.
As customer behaviors and needs change, the manufacturing industry must have the flexibility to adjust business practices in order to meet those changes. Organizations need to embrace innovative technologies that help to optimize daily operations and hone profit margins.
There are seven ways to start building this differentiation through digital transformation, and the technologies that will help make these goals a reality.
1. Embrace value-added services
‘Service’ now means so much more that what we typically think of good customer service. It may be eliminating an onerous task for customers, anticipating their needs, managing a process for them from beginning to end, or streamlining interactions. That service may be something delivered directly to the customer, or in some cases, something to make engagement with the customer more convenient or more valuable. Customers today have concerns that transcend the singular product. They are also concerned about the impact on the environment, the working conditions of plant workers, and sustainability of the operations and the supply chain.
Constellation Research suggests that communication and engagement with the customer can help reassure the consumer of the end-to-end relevance of the company. One way to accomplish this is to evolve from traditional business models which may have focused on a narrow aspect of the relationship, such as one mass produced product. Today, customers expect individualized offerings, highly personalized experiences, and purchases they can feel good about and recommend to friends.
Software solutions will help manage processes and streamline activities to support customers. Extended warranties and service contracts are value-added services. Online portals can also be used to interact and collaborate on personalized products or offerings. With modernized systems, these added customer-centric features can be relatively simple to provide, yet yield high returns in customer loyalty.
2. Improve the customer experience
According to Constellation Research: “Organizations are moving from products to services, services to experiences, experiences to insights, insights to brand promises.” Manufacturers must follow that progression.
It’s becoming increasingly important to build a distinct brand and stand out in your customer’s recognition. In today’s global economy, customers have many choices.
Understanding what customers want and how they prefer to interact is key. Customers are accustomed to omnichannel commerce opportunities, so manufacturers need to provide tools to do business the way customers prefer, whether that means through an Internet portal, via text, from a mobile phone or in person. Customers may also prefer to let their machines do the talking as they turn to sensor-based technology to convey data about equipment status.
Modern technology supports this flexibility. Customer experience suites, ecommerce, contract management solutions, and tools for online portals can transform the customer experience into a point of differentiation.
3. Fine tune supply and demand forecasting
In most manufacturing operations, inventory represents a sizable investment. Effectively managing inventory levels is one of the ways companies can optimize cash flow—without risking customer satisfaction. Accurately understanding customer needs, predicting seasonal demand, and projecting logistical needs will help procurement managers have the necessary resources to fulfill orders.
Connectivity with the extended supply chain also helps control spending. The ability to track suppliers and components or ingredients helps managers to feel confident about just-in-time strategies. They can fine-tune inventory levels, reducing redundancies, excessive inventory of raw resources and make strategic decisions about inventory of slow moving parts.
Advanced analytics with predictive science capabilities make this level of forecasting possible. Modern ERP solutions with easy-to-use reporting and contextual business intelligence can be applied to inventory, sales projections, service trends, and resource requirements, including labour.
4. Leverage sensors to protect equipment value
The use of smart sensors has transformed the production process for manufacturers. Smart sensors can be used to monitor machine performance and identify anomalies which may predict impending failure or maintenance needs. Acting as an early warning system, sensors can help keep machines running and extend the life-cycle of critical equipment.
5. Optimize marketing and sales processes
Marketing and sales are increasing important for manufacturers. Many organizations, though, are still using old-school marketing tactics, missing opportunities, and losing market share to upstart, aggressive competition. Transitioning to a digital marketing approach is an important part of the overall modernization strategy.
Digital marketing is marketing elevated to a science, using modern technologies and digital tactics for aligning with prospects. Modern analytics, and Customer Relationship Management (CRM) solutions organizations understand the customer profile, target buyers when and where they are most likely to make a decision, and track prospects through their sales cycles.
Business-to-Business purchases are often complex, carefully considered decisions. Marketing tactics used in consumer marketing won’t address the complex sales cycle of products and services used in industrial-commercial applications. Tracking the extensive marketing efforts throughout the decision-cycle, therefore, is essential in order to maximize investment of marketing efforts. Random campaigns will only waste time and can potentially annoy prospects who don’t want to be bothered with a sales pitch that is not tailored to their needs. Prospects expect the manufacturer to understand their pains, needs, and what products and services will solve the problem.
Providing customized proposals and quotes, sometimes with detailed design specs and CAD drawings, is typically part of the sales cycle. What was once a time consuming process can now be streamlined and highly automated with Configure Price Quote solutions which use rules-based parameters to configure variations of the product design and determine pricing.
6. Support field technicians with advanced tools
Many industries have an in-field component, whether it is technicians to repair installed equipment at the customer’s site, or crews to service vending machines, or in-plant maintenance crews who keep process operations running smoothly, from dairy to distillery. In each case, organizations can benefit from new technologies which make the technician more productive and well-informed, helping him to resolve maintenance and service orders in less time with fewer trips back to the service center for parts or tools. With a current shortage of skilled technicians, enhancing the ability of each technician is more and more important.
7. Go for anytime, anywhere business
Mobile solutions, online portals, and remote connectivity are all essential for modern business applications. As field technicians service equipment in the field they need access to data in order to make well informed decisions and increase first-call resolution rates. Checking service history, parts inventory status, and warranty and service contract agreements will help the technicians make timely repairs and provide sound advice to the customer.
Manufacturers must make it easy for personnel to do business from wherever they’re located, whenever the need arises. Whether it’s a sales rep who needs to update invoices in real time, a customer who wants to track an order, or a procurement specialist who needs to modify a purchase order on the fly, integrating mobile devices with core software helps the organization work more efficiently.
Why the urgency?
Digital transformation is impacting businesses of every kind, size, and location. Manufacturing is no exception. Because of the high-value and complexity of equipment used in the process and increasing global competition, modernizing operations takes on added significance. Doing nothing is high risk. Muddling along with legacy software, manual systems, and outdated tools is a direct route to obsolescence.
Manufacturers in both discrete and process applications now have the opportunity to jump start growth. They can leverage modern technology in order to better align with customers, optimize the use of sensors and data, and streamline activities. End-to-end visibility throughout the organization—and to the extended value chain—provides one of the most significant opportunities. Extending this connectivity further to include the customer also helps to align with customers and build value and loyalty.
Companies can embrace digital tactics or be left on the sidelines as the competition rushes past.
Phil Lewis is industry strategy director at Infor. Infor builds business software for specific industries in the cloud. With 16,000 employees and over 90,000 customers in more than 170 countries, Infor software is designed for progress.