October 14, 2016
Companies are turning to digital to do one of the three things: improve customer experience (CX) using digital technologies; improve their operational efficiency to better serve customers; and launch new business models.
The manufacturing and industrial sectors are undergoing a similar transformation. In my recent discussions with leaders in this market, Industry 4.0 and smart factory dominate the conversations, but the discussions quickly shift to the Internet of things (IoT). While the industrial internet is the most significant manifestation of the digital revolution in these sectors, we are also coming across a broader range of digital initiatives from manufacturing firms.
Tech vendors and systems integrators working with manufacturing firms have identified two types of engagements emerging. Infosys’ Global Head of the Manufacturing Vertical, Nitesh Bansal opined that one set of firms are taking charge of sensors and monitors that they own and leveraging the data assets to improve predictive maintenance, asset efficiency and improve track and trace. Outcomes from these digital operational excellence (DOX) initiatives include:
- Collecting data and analyzing it for better predictive maintenance
- Empowering technicians to do their job better by providing actionable directions at the point of maintenance
- Using augmented reality to help with quick diagnosis and fix
- Increasing the asset throughput while increasing safety using automated self-driven vehicles
The second category includes another set of firms like GE, Toyota, Johnson Controls, Harley Davidson, Boeing, John Deere and ABB which are foraying into newer business models using digital. These firms are leveraging the key position they hold in their industry value chain and trying to capture adjacent value. They pursue adjacencies by placing themselves at the center of a platform they create and invite other industry participants to collaborate and monetize the access. Often, they turn to their partners like Infosys and other SIs and tech vendors to build such platforms.
For example, Boeing’s Digital Aviation Platform makes available a huge amount of aircraft performance and operations data on a platform through APIs and lets other industry players build apps while charging them for the access. We also see OEMs moving from product-selling to service-selling similar to the famous case of Rolls Royce selling hours of jet engine propulsion to airlines. GE and Siemens are doing something similar by creating their IoT platforms. Siemens is providing train operations as a service to a Spanish rail operator relying on its ability to monitor and manage operations remotely.
So far so good, but do you see anything missing in the above picture? I do: where is the customer in all this? What are these firms doing to improve the experience of their customer and their customers’ customers?
While a majority of these firms are B2B focused OEMs with less visible CX initiatives and improving operational efficiency or launching new services ultimately improves the customer experience, they are still missing a key part of the equation. You cannot lose sight of the actions that impact your customers more directly through transformations in products or the systems facing them. The way, for example, Tesla went about creating essentially an iPhone of the car industry and are now already on version 3. Not many of these firms seem to be doing a Tesla here, at least yet.
Do you agree? It’ll be great to hear from you.