Productivity has long been the gauge by which the health of the manufacturing industry has been measured; but in these transformative times, productivity alone does not tell the whole story.
Indeed, as revolutionary technologies like cloud, artificial intelligence, robotics, augmented reality, and 3D printing increasingly take hold, it can be argued that innovation and digital transformation will be the benchmarks of the future.
In simple terms, digital transformation is the process of using technologies to create new ways of operating and growing businesses, and it is a process that is already well underway.
Even now, we are seeing some manufacturers pull away from the pack and experience double-digit growth in productivity, market share, and revenue as a result of their ability to apply new technologies, while many of their competitors remain flat at best.
It is clear, therefore, that business leaders who recognise the real impact of digital technologies on their industry, customers, partners, suppliers, and business practices stand to gain substantial advantages over their rivals.
Product quality and customer centricity must remain the top priorities, but forward-thinking manufacturers are changing how they achieve these objectives through the use of connected products, connected supply chains, and smart manufacturing.
These businesses are rethinking and reimagining their products, services, and processes because of the new capabilities that emerging technologies can provide. And these efforts are seeing them move up IDC’s information transformation maturity curve.
The pinnacle of this maturity model is a state of optimised information transformation, whereby embedded intelligence drives continuous innovation in processes, products, and services, resulting in a greatly enhanced customer experience.
The potential for embedded intelligence exists across functional areas, from supply chain to factory floor to product and service operations. And in many segments, manufacturers are already delivering products to market that contain new levels of intelligence.
The best of these smart, connected products will provide valuable data — autonomously reporting on their own health, requesting service or preventive maintenance calls, identifying future design improvements, and validating warranty claims.
In this optimised state of embedded intelligence, manufacturers are able to integrate information from myriad sources with predictable and prescriptive analytics, machine learning, and cognitive computing.
And by doing so, they find themselves in a position to drive continuous improvements in how data value is developed and realised across the entire value chain.
Indeed, the monetisation of data from and about products, customers, and markets is embedded into the enterprise’s business strategy and becomes a significant source of revenue and competitive strength.
This in turn can enable a variety of services — from self-healing to prescriptive — that can reduce the cost of maintenance, maximise product capabilities, and generate revenue.
The gains from embedding intelligence within products and processes can be substantial. For example, service contracts for products with embedded intelligence can eliminate the need for service calls for some maintenance operations or, at minimum, accelerate the time to repair.
Aside from embedded intelligence, we are also seeing increasing numbers of manufacturers derive business value from the integration of supply chain, plant operations, and product and service life-cycle management.
Traditionally, manufacturers’ IT portfolios are full of business applications that serve one line of business or one set of business processes, managing silos of information pertaining and focusing on their dedicated processes.
However, this siloed approach limits the organisation’s ability to maximise investments in emerging technologies and digital transformation. But we are beginning to see a change in approach.
Today, a growing band of manufacturers are actively figuring out how to provide information effectively across their organisation and, at the same time, changing how they buy and use business applications.
As we can see, manufacturers around the world are increasingly understanding the pressing need to create new processes and new organisational structures to deliver new business models. In this regard, enabling success is not necessarily about “best” practices but rather “next” practices.
However, it is important to remember that simply having technology in place for technologies sake will never be enough. Manufacturers must continue to innovate and create value from their investments in solving business problems or enabling new offerings.
And as more and more manufacturers come to this realisation, the digital transformation of manufacturing processes will continue to gather pace, revolutionising the way business is done in this critical global industry.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC). He can be contacted via Twitter @JyotiIDC. Content for this week’s feature leverages global, regional, and local research studies undertaken by IDC.
