Gone are the days when the industrial manufacturing value proposition was relatively simple: Industrial manufacturers made products and delivered them. At best, they also provided “break-fix” services during their operation.
Now, the industrial manufacturer’s job does not end there.
Driven by ever-more-demanding customers and supported by the widespread uptake of the Internet of Things and the emerging power of machine learning and AI, industrial manufacturers are developing new capabilities to track and base services on huge volumes of data generated by thousands of assets and equipment. These services, involving highly customized, digitalized products, will cover everything from the simpler break-fix model to the more complex outcome-as-a-service models and monetization of data assets.
Proven success strategies show a range of approaches to creating new business outcomes based on existing products and processes as well as developing disruptive new business models.
Customer Centricity:
The world is changing. Customer expectations are constantly changing. So the way that the customer experience is viewed must also change. Companies will need to develop customer-for-life relationships, sharing risk, and focusing on long-term value. This will be based on a holistic view of customers, their business processes, and how they use the products in their daily operations. Since commoditization of offerings poses a big threat, industrial manufacturing companies should prioritize customer experience and relationships as a differentiator.
Becoming customer-centric means positioning the customer point of view at every decision – from engineering to sales and marketing, to manufacturing, and through to installation and services – to create great experiences at every interaction point.
Segment of One:
Providing solutions that precisely fit the needs of a single customer has been commonplace in traditional engineer-to-order environments. Now, the ability to capture customer requirements effectively and enable mass customization is the key to giving all customers exactly what they want. Critical for this transformation is the ability to manage the specifics of each order in every aspect of the value chain in a consistent way, nearly at the cost of standard order.
Customers are expecting customized products, services, and solutions that precisely fit their individual needs based on sophisticated platform, configuration, and mass-customization strategies. This requires solutions and technology to drive automation, adaptability, and efficiency so that industrial manufacturers can deliver highly customized solutions at the price of standard products.
Digital Smart Products & Solutions:
Today’s smart products and solutions contain a vast array of electronics and many different pieces of software that are as important as the mechanical design. In fact, the value contribution of software continues to grow, augmenting and extending the original product functionality and enabling additional business models.
The ability to design, manufacture and service digital smart products and solutions is essential.
Digital Supply Chain & Smart Factories:
Supply chains and manufacturing networks in industrial manufacturing companies are becoming completely modular and flexible to allow the seamless execution of different manufacturing strategies while optimizing supply chain transparency to further improve supply chain performance.
Operating a digital supply chain with smart and modular manufacturing needs new business capabilities enabled by smart technology.
Servitization & Outcome-Based Business Models:
Innovative industrial manufacturing companies provide machines and equipment bundled with services, software, parts, and consumables. This helps generate new business opportunities and create a more sustainable revenue stream. Moving toward pay-for-outcome and service-based models is also attractive for customers who want to shift capital expenses to operating expenses, share business risk, or try new technologies with lower risks.
Strengthening the service business and entering new, outcome-based business models requires new business capabilities enabled by smart technology.
All of the above needs new business capabilities throughout the entire value chain – provided by SAP’s S/4HANA Smart ERP through its Intelligent Enterprise approach.
KloudData is a leading global solutions provider helping customers transform into ‘Intelligent Enterprises’ with SAP S/4HANA on the cloud. Feel free to reach us to learn more – KloudData Konnect
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