The industrial manufacturing industry is changing fast – and those that want to survive will need to change with it. This digibook looks at what’s happening and how manufacturers can respond. It will show that success in the new world will come from manufacturers being able to:
Understand their organisation and products from the customer’s perspective
Align their value chain around the customer’s needs
Use data and intelligence to innovate faster in response to customer demand
All of these factors have contributed to manufacturing success over the past decades – and the companies that have mastered them are the ones that are still around to tell the tale.
Those three fundamentals won’t change. Manufacturers will still strive to produce innovative products, in an efficient way, with maximum insight and control over their operations. But what is changing – and fast – is the global environment in which manufacturers are operating. In this new environment, innovation, efficiency and visibility are still critical to success – but they need to happen faster, better and in a more customer-focused way than ever before.
There are three interconnected ways in which the ground is shifting under manufacturers’ feet:
An array of new digital technologies offers the promise of real-time production, customer-responsive innovation, ultra-low operating costs and unprecedented efficiency. For companies used to making physical products with real machinery operated by humans, it can be hard to imagine how to incorporate digital technologies to translate data into physical products and vice versa. But as others adopt digital manufacturing with enthusiasm, sticking with the old ways is a sure path to obsolescence.
Globalisation isn’t new: manufacturers have been sourcing materials abroad, perfecting global operating models and competing with foreign rivals for decades. But what’s happening now is that some cultures are embracing digital manufacturing at pace – often encouraged by government schemes and incentives – while others are more cautious. Countries and companies that enjoy a manufacturing advantage today risk seeing it erode as rivals adopt new digital technologies that make them more efficient and customer-responsive.
The UK government is exploring ways to make the country a leader in high-tech manufacturing, with digital innovation hubs, a national innovation scheme and digital research centers focused on technology such as AI, virtual reality and the Internet of Things.
CityAM,
Making British industry digital could create thousands of new jobs,
October 2017
All of these trends are interlinked and reinforce each other, creating a perfect storm of change.
These shifts aren’t a far-off consideration. They’re happening now, and their effects are already being felt – in terms of lower earnings and growth for companies that don’t move with the times.
That should be a wake-up call for manufacturers everywhere – but a wake-up call to do what? Without a clear vision for how digital technologies can help their business to remain competitive, manufacturers are in danger of simply adopting technology for technology’s sake. Many fall into the trap of digitising individual processes – often replicating any inefficiencies they had – rather than focusing on transforming the business as a whole. And with so many technologies to choose from – virtual reality, digital twins, advanced robotics, 3D printing, the Internet of Things, to name just a few – there’s a real risk of missing the wood for the trees, and spending a lot of time and money on initiatives that don’t deliver competitive advantage.
That’s why it’s important to step back and consider your whole business before starting to think about individual technologies.
Your aim is to put yourself in your customer’s shoes (a perspective that doesn’t always come naturally to product-oriented manufacturers) and plot out how your entire value chain could be aligned and updated to better serve customers’ needs and expectations. The customer experience is now critical to your future success, so it’s essential to understand all of the ways in which customers interact with your business and your products, and transform your operations to ensure that the entire customer journey is seamless and joined-up. In the next sections we’ll look at what that means in practice.
The key to success in the new world of manufacturing is to view the value chain as a single experience, with the customer at the center, and with all elements connected by a “digital thread”. That “digital thread” contains data that flows through every part of your organisation to inform a seamless, responsive process – from sensing customer demand through to delivering (and receiving payment for) products and services that meet continuously-evolving customer needs. Click on the icons in the graphic below to explore the elements of the connected value chain.
Demand Sensing
Marketing
Sales and Commerce
Order Management and Finance
Supply Chain
Design & Development
Manufacturing
Service
Connected products generate a continuous flow of data about how the customer experiences, interacts with and uses the product. Use that data to:
Sense when the customer may need a replacement part, refill or upgrade
Understand problems that can be addressed in future product versions
Model the real-world customer experience when prototyping new products
Sense opportunities for new products or services that you don’t yet offer
A customer’s digital and social media activity provides a flow of data about their wants, needs, preferences and preoccupations. Use that data to:
Understand customer behaviors, attributes and activities – to drive personalisation
Engage and nurture customers with relevant, personalised communications
Gather ideas and suggestions for product improvements and new products
Provide direct and indirect sales teams with better and more timely leads
Every interaction (human or automated) with a prospect generates data that provides insight into their propensity to buy and timescale to purchase. Use that data to:
Identify and focus on the most promising leads and opportunities
Understand and address customer objections and delaying factors
Collect customer feedback and automatically feed it into product development
Design exceptional online commerce experiences
Gather customisation requirements and automatically feed them to manufacturing
Configure, price and quote for customer orders on the fly
Data from systems, customers and connected devices can drive the introduction of more efficient commercial and operating models, as well as entire new revenue streams. Use that data to:
Align order management with marketing, sales and production to ensure delivery to promise
Create a central hub for order entry, ATP, and orchestration across multiple ERP systems
Enable “product as a service”-style revenue models
Automate pricing, quoting, billing and collections
Forecast revenues and expenditure more accurately
Data from demand sensing, customer orders and manufacturing operations provide detailed insight into which products you’ll be manufacturing and to which timescales. Use that data to:
Collaborate with supply chain partners to ensure just in time delivery of materials
Share demand forecasts with dealers and sellers to help them plan
Customer experience data from connected products, customer conversations and customer social media activity provide deep insight into what your customers need and value. Use that data to:
Gather ideas for new products and services
Build a sustainable innovation pipeline
Collaborate with customers, partners, and suppliers to co-create new products and services
Data about your products, customisations and manufacturing requirements is key to driving efficient product design and development in the era of mass customisation. Use that data to:
Efficiently develop and manage new products and sustain engineering iterations
Work with supply chain partners to design, prototype and develop new products
Rapidly commercialise products for globalised manufacturing and multichannel commerce
Monitor and manage quality
Manage innovation projects from idea to launch
Sensor data from your manufacturing equipment and operations has a critical role to play in enabling a smart, connected factory. Use that data to:
Create a digital twin of your factory to model new production lines and assembly processes
Monitor equipment for potential failures and apply proactive maintenance
Enable remote management of equipment and processes
Service is the new manufacturing battleground, as data drives a multitude of service innovations – from remotely updating connected devices to delivering entire products as a service. Use data to:
Inform new service technologies such as intelligent chatbots and service apps
Monitor connected products, predict failures, and automatically trigger a service visit
Automatically update connected products as new functionality is developed
Monitor and respond to customers in real-time on social channels
Increasingly, that intelligence will be artificial, using machine learning to gain a better understanding and automatically take the best next action. For example, artificial intelligence in the smart, connected value chain can be used to:
Predict when customers are most likely to buy, and automatically send them offers
Support intelligent customer segmentation for better sales forecasting
Understand where customers are having problems with connected products, and send them helpful information
Predict which customisations will be most popular based on current buying trends
Sense when equipment is about to fail, and automatically schedule a repair or replacement
Drive dynamic, usage-based pricing for products delivered as a service
A value chain that’s smart (capable of analysing itself and acting on that insight) and connected (with a digital thread) will give your business a significant competitive advantage, enabling you to:
When you’re planning your digital transformation, it helps to have a partner with extensive experience of helping manufacturing businesses to modernise and streamline the customer journey. With cloud-based software that’s quick to deploy and continuously updated with the latest functionality, Oracle can help you accelerate your digital manufacturing transformation and more quickly realise the benefits of a smart, connected value chain.
Oracle’s complete, cloud-based solution for manufacturing enables the integration of CX, workforce, finance, supply chain, and data systems and solutions. This tightly-integrated suite of solutions enables manufacturers to transform the way they operate at every level – from improving core processes and operations, to embracing new data-driven technology and seamlessly weaving it into current operations.
