How Digital Manufacturing is Changing the Game, by Prasanth Thomas

Last year, my team interviewed several CXOs and industry experts to understand their perspectives on the changing landscape of manufacturing. Many are watching, before their eyes, the convergence of the real and virtual worlds (cyber-physical systems), as well as the advancement of and interoperability between sensors, processors and Internet technologies. More information is becoming available at a faster rate than ever before, but a challenge remains. How do manufacturers inform their traditional business models with the proliferation of data to make more money?

While each organization takes a distinct path to digital manufacturing, there is much attention on what are the elements that constitute a more informed set of manufacturing processes. In other words, what role do digital technologies play in shifting the traditional manufacturing value chain?

There is no single definition of digital

Continued dialogue with industry leaders validates that there is no single definition of what “digital” means. For many, “digital” means social media, focusing largely on the consumer connotation. To others, “digital” conjures imagery of mobile apps for simple anytime and anywhere transactions. As for the purists, “digital” represents all digital connectivity and the data it provides. This could include data from deep-earth mining equipment. Data generated from vehicles in transit. Or, merely data that people generate when they transact and interact with every point, click and swipe on the Internet.

Even though “digital” has a broad definition, it really comes down to how companies use technology and data to better understand their customers’ behaviors and deliver an elevated, end-to-end experience. Every organization has a digital sweet spot. Tapping into that sweet spot will enable a leader to take full advantage of how to best digitize their value chain and create a distinct competitive advantage. This will require a company to first evaluate their business models and revenue streams.

Four questions your business models need to answer

The ubiquity of sensors, connected devices, data, and processing power is allowing companies across industries to redefine their business models.

Traditional industrial manufacturers are moving away from product sales toward outcome-based solution sales. Automobile companies recognize that car ownership is likely to decline and encourage shared ownership and mobility solutions.

Keeping Digital Manufacturing in mind, as you begin to take a fresh look at your business models, a few questions you need to reflect on:

  1. Are you seeing new revenue models enabled by digital emergence in your industries?
  2. How will digital drive outcome-based models?
  3. What prevents these models from becoming main stream?
  4. Is the technology mature enough to support these models and their underlying processes?

Looking across the spectrum in our discussion with industry experts, they have identified two trends companies can’t ignore.

Digital manufacturing: More than just 3D printing and the Internet of Things

Two technology advances that are quickly rising to the top of everyone’s radar are 3D printing and the Internet of Things (IoT).

IoT promises to deliver immediate improvements through visibility into real-time operations using a network of sensors monitoring every activity in the value chain. 3D printing has the potential to solve several long-standing problems across areas like inventory management, assembly, product design, and even gourmet baking.

While expectations for these technologies are high, there is a good deal of skepticism as well. Some experts feel, perhaps rightly so, that the hype surrounding these new technologies is unjustified. Some feel that the technologies need to continue to mature.

As companies create their digital roadmaps to transform their business, a number of technologies can be explored. The opportunity awaits those willing to stare down the challenges and experiment with 3D printing or the Internet of Things:

  1. Will 3D printing complement or supplement traditional manufacturing?
  2. What are the use cases for 3D printing or IoT in your industry?
  3. What will be the impact on sourcing, manufacturing, and distribution?
  4. What are the dangers of more machines and devices becoming “smart” and connected? Security challenges? Multi-device failures?
  5. How can big-data analytics derive insights from the data IoT provides?
  6. As machines get smarter, what will be the role of humans? (Consider autonomous driving, self-controlled machines, or drones for last-mile delivery)

Customer experience — to each his own

Understanding each customer’s needs has long been the Holy Grail for most companies. As companies continue to operate and change how they respond to changing dynamics in the era of the customer, digital technologies open up new forms of engagement with the customer, any business’s most important stakeholder.

The best way to serve them is to know who they are and to understand their needs. The new generation of digital-native customers want brands to ‘know me and show me you know me.’

Every company can build the capability to respond to these elevated expectations, by getting to know their customers. Customers leave a digital fingerprint with every online transaction they make. When an organization leverages this data, they can understand their customers better and begin to customize their products and services.

In many cases, the products themselves tell an entire story. Cars can tell insurers and automotive OEMs all about customers’ daily routines and driving habits. Smart homes know everything about the schedules and personal preferences of residents, and smart fridges knows what they eat for breakfast and when. However, as organizations jump into this tide of consumer data to improve customer experiences, they need to think about the following:

  • What are the new capabilities needed in different industries to understand customers better?
  • Where should companies draw the line on privacy intrusion?
  • What does the ability to understand customers better mean in terms of competitive advantages?
  • How will the role of the distribution channel change in the traditional supply chain as organizations get closer to the consumer directly

It is clear by our research and interviews that the traditional ways of doing business in manufacturing is shifting. Manufacturers who chart a distinct digital path and use data and insights to inform their operations will drive greater market share. Continue to ask introspective questions to define what digital means to your business. Challenge your business models and revenue streams. And, explore new technologies to inform your manufacturing operations to create a more customer-centric business.

The Digital Jam

Join us as we continue to explore these topics and questions at the Manufacturing Digital Jam 2015. It’s a 72-hour live, online and collaborative innovation event. Invitees across manufacturing, industry analysts, and academicians are coming together to contribute and provide insights, perspectives, and opinions on the adoption of digital in the Manufacturing industry.

We believe you will benefit from participating in this event by sharing your digital views with peers. The interchange will allow you to gain real-time feedback on your thoughts to learn and act. After all, one outcome of the digital world is that crowdsourcing always beats siloed thinking. For more information, reach out to your Cognizant Account Manager or write in to Jam2015@cognizant.com.

Opinions expressed in this blog are of the author and may not represent Cognizant’s point of view.


Originally published at digitally.cognizant.com on November 6, 2015.