A global marketplace is emerging that represents a huge opportunity for manufacturing. But the market is segmented, demanding specialization that will be tough for traditional manufacturers to handle. Building an agile organization that can quickly adapt will mean creating digital operations that can help your company close the connectivity gap. It’s up to IT to solve the problem and move companies forward.
At Cerasis, our backbone is business process improvement through technology. Our technology department in Tulsa is comprised of several developers who solve our customers’ transportation management needs. A bulk of our customers are manufacturers who are faced with stiffer competition thanks to economic and globalization pressures. Manufacturers need to focus on their core in order to stay competitive, and technological tools, such as our Cerasis Rater, a transportation management system, allow for streamlined process in managing transportation, giving back precious time, money, and focus to our manufacturing customers.
We have written several posts on technology, which you can read in our technology blog category, have talked about the future of manufacturing, the future of transportation technology, and the Industrial Internet of things. We’ve previously touched on distributed manufacturing on our own and welcomed a guest blogger on the topic. Today we bring you an infographic that speaks about how manufacturing companies continue to look to the future and invest in emerging technology in order to move forward in customer satisfaction and to run a profitable manufacturing business. You will find the infographic at the end of this post. It was done by Polycom, a maker of video collaboration solutions for enterprises.
Consumers anoint – and abandon – providers with breathtaking speed, causing seismic shifts in the market.
They’re also increasingly difficult to define, no longer neatly fitting into traditional marketing segments. With the rise of emerging markets and micro-segments, manufacturing is confronting the challenge of mass customization.
The question is not if or when but how: Customers are demanding variety, and manufacturing companies must deliver. What’s key to making this work: big data visibility, flexible processes, and an agile ecosystem that can move swiftly to serve an increasingly fragmenting, but exceptionally demanding consumer base.
Manufacturing companies today face an identity problem: defining their customers. Traditional segmentation strategies no longer work in a world characterized by complexity and constant change.
Customers are bewilderingly diverse, play a variety of roles in their lives, and rapidly adopt new behaviors and tools. Armed with industry knowledge, technology savvy, and purchasing power, customers control the sales cycle. They’re also industry disruptors, toppling traditional business models in the blink of an eye.
Serving this empowered, information-rich customer base is straining manufacturing processes and forcing companies to adopt new ways of developing, marketing, and delivering products.
Now new markets are flexing their purchasing muscle. By 2025, emerging markets will constitute two-thirds of all global demand, as another 1.8 billion individuals join the consuming class. 1 One consultancy believes the change will happen even faster, with 1 billion new buyers opening their wallets by 2015.
Although these markets offer significant growth potential, they are difficult to serve, represent a diverse array of geographies, cultures, ethnicities, and languages, among other variables.
Manufacturers know that they need to master mass customization if they are to serve this fragmented customer base profitably – and at scale. Fortunately, there is a path forward: digital operations that stitch systems, processes, and people together to create a flexible, nimble ecosystem that senses and responds to demand shifts. In this model, customers aren’t just purchasers – they define and create value.
For traditional manufacturers, it’s not quite as simple. Early adopters of enterprise resource planning and supply chain management tools, most companies are tethered by technology and lack a comprehensive view of their data and processes.
Only 38% of companies surveyed by Cap Gemini Consulting and the MIT Center for Digital Business are currently coordinating digital initiatives across functions and regions – a key reason manufacturing lags other industries in leveraging the full power of these technologies.
To join the “Digerati,” companies must close their connectivity gaps. 5 Manufacturers know this: three out of four companies today say that improving cross-departmental systems, enabling process collaboration, and integrating processes are among their top strategic priorities.
Creating a cohesive back-end is an important first step, enabling companies to make real-time decisions, streamline production, and cut costs. However, it does little to fuel innovation. To meet customers’ insatiable desire for new products and services, companies are investing in tools that help them model, prototype, and build offerings on a continual basis.
CAD modeling software, 3D printing, and advanced robotics come swiftly to mind. Robots in particular are enabling companies to switch easily between standard and custom products without costly manual intervention or tooling switches. Others are taking a modular approach to manufacturing, creating a standard baseline and offering later-stage customization to reduce complexity and costs.
Companies are also taking a fresh look at collaboration. They’re using online platforms to link customers, suppliers, and internal teams in creating new products and sources of value.
Crowdsourcing networks not only provide new ideas – they also vote on them – eliminating beta test groups and surveys. And collaboration decision environments help internal teams, suppliers, and experts mass-customize products in real-time, speeding time to market and cutting costs.
Align Technology, a leading manufacturer of invisible orthodontics, uses video, audio, and content tools to share interactive 3D models, annotate renderings, and discuss key processes in workplaces ranging from conference rooms to hotel rooms. Empowering key contributors with collaboration tools on mobile devices enables them to make faster, better decisions and track development work wherever they are in the world.
With mass customization, decision-making is a minute-by-minute process. Companies are using virtual “war rooms” and linking suppliers and teams for real time analysis of market and customer behavior change. Some 63% of companies have adopted video to enable real-time collaboration with global teams.
Using visualization tools, customers can analyze big data analytics for demand patterns, leveraging this information to introduce, extend, and retire products. They also can drill down to the unit cost, understanding the true cost of customizing different features and functions. This enables manufacturers to identify products with the best ROI and eliminate or increase prices on other choices.
Having created an enterprise view of performance across product lines, plants, and geographies, companies also have better control of manufacturing processes than ever before.
With better data and predictive capabilities, they’re able to map production to real needs. That means less raw material and inventory waste, greater productivity, and better asset management and maintenance. Adopting digital tools can help manufacturers cut costs as much as 30%, 10 an important step to making mass-customization more than a niche play.
Mass customization is fast becoming a new market reality. Although only 12% of manufacturers are currently “Digiratis,” 12 the industry needs to move upstream – and fast. Global consumers, raised on the power of Amazon’s recommendation engines, Adidas’ customization tools, and Facebook’s social sharing will demand the same functions from their other providers. And if companies can’t deliver it to them? They will simply move on to those who can.
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