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Live Product Innovation, Part 4: Configurable, Personalized Products For A Lot Size Of One

John McNiff

In Part 1 of this series, we looked at how in-memory computing affects live product innovation. In Part 2, we explored the impact of the Internet of Things (IoT) and Big Data on smart connected products. In Part 3, we approached the topic from the perspective of process industries. In Part 4, we examine what’s needed to achieve a “live” segment of one, a lot size of one.

Configure, price, quote. CPQ. We all like an acronym. CPQ has become its own sector, and just as product lifecycle management (PLM), the business strategy, was hijacked by CAD and engineering applications, CPQ has been hijacked by sales solutions. But that ignores what it means to configure.

We also now have configuration lifecycle management (CLM), which we thought might help articulate what’s required. But the definition of CLM seems to be going down a silo, as well.

The fact is that in a live business, building a lot size of one requires more than a fancy Web interface and configurator. It involves the complete process of defining, selling, building, shipping, servicing, and maintaining a product, system, or solution — connected, integrated, embedded, and intelligent throughout the full value chain.

Death of a salesman?

I’m not saying CPQ isn’t valuable. It is. Having your salesforce in the field with the customer, configuring a product on the spot with nice visualizations, certainly beats lugging around a catalog, spreadsheet, and mobile phone to check if options are allowable.

Website-based configurators likewise offer a super experience. But how long does it take to deliver? Automotive is often cited as the prime example, but delivery cycles range from six to 15 months. Without connection to design, manufacturing, fulfillment, and service, it’s still just a fancy Web interface.

A lot needs to be done before we get to the sales guy. Configuration engineers need to know the compatible options. Designers need to understand whether products are compatible across hardware and software. Logistics needs to determine whether parts and combinations can be sourced and delivered. Suppliers need to know when to supply components. And so on.

Convergence on a platform for change

Product data, configurations, bills of materials (BOMs), and variants are integral to designing, selling, and making personalized products. But PLM comes from an engineering-only view. CPQ comes from a sales-only view. Manufacturing comes from a production-only view. Three domains, all with different views of the same product.

What’s changing now is the speed required to deliver a lot size of one. Consumers are no longer willing to wait 15, six, or even three months. Innovation is moving from mechanical features to embedded software, driving a need to condense design cycles – and a convergence of silos. Non-integrated, non-real-time solutions won’t support the next wave.

You need real-time intelligence not only to understand customer needs but also to provide designers and configurators with analysis to help them determine what will work, what can be sold, and what might be compatible. That also affects the supply chain, because partners need to know which parts are allowable and when they need to ship.

Once it’s designed and ordered, you must build and ship the configuration to specification. That doesn’t just involve which components have been selected. It also affects the definition of parameters, tooling, inspections, certifications, and so on. The production system must be updated with the exact configuration and build definition for the single unit coming into production. The shop floor system needs this data synchronized in real time. The same goes for calls to suppliers and logistics.

The result is essentially a distributed design function with concurrent, parallel lifecycles and lifetimes. Even for large, complex products, while the core platform might involve a multi-year program, shipping in configurable, custom designs occurs on a much shorter cycle. Yet you still need to synchronize and control everything from order to end customer.

The good news is that a solution is on the horizon. A platform for managing live product innovation can link engineering configuration with sales and manufacturing configuration. Such a solution must offer:

  • The ability to be not only integrated but also embedded across sales, design, manufacturing, supply chain, and service
  • A real-time data architecture powered by in-memory computing to correlate Big Data from “things” and people directly with business processes and systems of record
  • Intelligent tools for machine learning, prediction, and real-time analytics to help your people recommend and validate configurations and options that can be built and will sell
  • An open architecture to support “brownfield” realities and allow interconnectivity across systems

“Advanced variant configuration” is coming – and it will allow a live segment of one, lot size of one, for the first time.

Want to learn more about live product innovation? Join us at SAPPHIRE NOW May 16-18 in Orlando, Fla. We’ll be discussing these topics and more. Hope to see you there.

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John McNiff

About John McNiff

John McNiff is the Vice President of Solution Management for the R&D/Engineering line-of-business business unit at SAP. John has held a number of sales and business development roles at SAP, focused on the manufacturing and engineering topics.

How Connectivity Can Ease Parking Pain

Barbara Flügge

As the world’s urban population grows, innovative cities are taking steps to ensure they can deploy ecologically and economically healthy, citizen-centric services and attract new investment, businesses, and talent. By harnessing the power of innovative digital technologies, these cities are transforming into more sustainable, livable communities.

Digital transformation is a joint effort, and governments need the support, expertise, and services of leading organizations to become smart cities.

Taking a closer look into the physical and digital assets of cities, urban space is a critical high-value asset.  In the following interview, Ilaria Riva, global digital and marketing manager with Hub Parking Technology, elaborates on the distinct viewpoints on space management—specifically, parking spaces.

Ilaria, let’s start on what I call the essentials of smart mobility offerings. When I look into the definition of smart mobility, it is defined as an offering that gives everyone the right to mobility – regardless of age, budget, handicap, local familiarity or not. Which three elements are essential from your point of view?

The three most important elements are:

  1. Technology and mobile infrastructure
  2. Policies and strategic decision making upon partnerships and cooperation
  3. Investment capability

Easy access to connectivity for all citizens is key. The same accounts for smart mobile solutions and sensors that offer real-time data and alerts.

So the accessibility gained through connectivity and openness then also helps create an ecosystem that allows cities to connect with their citizens?

Yes, it offers even better, more efficient and sustainable services. Mobile applications allow cities to know better their citizens, their needs and sentiments, and improve their quality of life. Adoption of these solutions asks for a holistic view, meaning the presence of policies and an integrated vision across different dimensions of urban living. A series of integrated policies implemented by the public sector will help – such as pushing for shared services, redesigning the city, expanding pedestrian zones, amongst others. [Others] are strategic partnerships and integrated initiatives between private and public sector in order to build one ecosystem where there is no fragmentation and no friction.

You talk about offering what I call a “frictionless city” that allows a smooth mobility experience to everyone throughout the city. Cool!

Yes, and with respect to investment capability. It translates into the ability of the city to invest wisely into infrastructure from an operational and constructional point of view where and when it is needed.

Which of the essential elements are a key focus from your point of view?

Parking congestion in cities accounts for 10% of a car’s greenhouse gas emission and 30% of urban traffic. Most of the current parking infrastructure does not cover the ever-growing demand for efficient parking in a city. Our aim is to constantly focus on developing technologies that can help municipalities and parking operators threefold:

  • Offering new and more efficient services for their citizens.
  • Helping reduce congestion and improve transient time
  • Improving the community’s quality of life

We are able to achieve this, both through technology and bringing together private and public sectors, to create an effective, consistent, and frictionless parking experience for the end user and citizen. Finally, we contribute to improve dramatically urban mobility.

How are cities then able to collect and analyze data?

The gathered information and knowledge is helping them plan, implement, and evaluate integrated initiatives of smart mobility. Think about the following applications as an example:

  • GPS-based mobile solutions leveraging real-time occupancy information and variable message signs (VMS) to drive traffic and direct drivers to the closest parking location with parking availability
  • Integrated parking guidance systems to further relieve congestion and guide the customer to a specific parking spot
  • Multiple smart ways to access and pay automatically and seamlessly for parking through a mobile phone (both for transients and monthly subscribers), license plate recognition, RFID, and AVI to speed up the throughput and make the experience seamless for the citizen.

Do you have an example?

An integration with toll systems, for example, allows citizens to access parking by using the same credentials they use for accessing toll roads. Moreover:

  • Integrations with public transportation fare collection systems stimulate intermodality
  • Integrated video surveillance systems for area and environment security foster safety in a gated area
  • Predictive business intelligence solutions predict more accurately the throughput and plan
  • Powerful back-end platforms for our mobile solutions offer the ability to gain valuable insights about citizens’ parking behaviors, [and to] connect with citizens and derive further parking strategies from that.

With respect to strategic, functional, and business aspects, I see that an open dialogue is needed with municipalities, the local economy, and constituents to frame a holistic and integrated vision and determine the digital agenda for the city.

Exactly! This is where technology turns into a key enabler for the creation of an open and integrated ecosystem and mobility plan, which ultimately translates into a better quality of life for the citizens. Open platforms are essential, as well as modular and extensible architectures, in order to allow cities to integrate multiple technologies and providers and easily scale with time.

Open meaning open to third-party offerings – being a platform itself, or apps and services?

Well, both.

Coming back to smart mobility in a wider context of smart cities and regions, where do you see collaboration opportunities with other mobility and non-mobility solution providers?

Collaboration opportunities are manifold: local retailers, the trade fair and event operators, the tourism office, and the city-wide marketing strategists. I recommend dedicating time and energy into a mobility-led strategy exchange together with these and other stakeholders. That is only way to identify business and functional requirements and distill technical and functional integration needs. The ultimate goal is to build an open and common ecosystem locally.

When we look at the global map, the regions and countries that will benefit most from intelligent space management are facing geographical constraints. Many to date face maintenance and investment burdens from existing infrastructures. Cities that are growing fast in e-commerce expect on-demand space requests and fulfillment for loading and unloading zones, for drone landing spots, and physical switchboards for cargo shipments. Which ones would you add?

According to the growth forecasts, urban developments will be massively happening in developing and emerging countries. Greenfield cities and urban settlements then look into space management holistically. So taking into account space, adjacent services; for example, hospitality services, mobility encompassing services in residential and commercial districts, amongst others.

When I look through my ecosystems lens, do you feel that these insights work for any stakeholder in any area with a geographical boundary, an ad-hoc need for loading and unloading zones, or anything else?

Correct, Barbara! One key element on addressing digital transformation potential is the capability to adjust and adapt advancements to a particular situation and need. And that is a task to be tackled in other mobility-affected areas, too.

Thank you, Ilaria, for the inspirational exchange!

Ilaria Riva is global digital and marketing manager with Hub Parking Technology. Ilaria works on a global scale to bring in-depth knowledge and expertise on parking and space operations to small, medium, large, and mega-cities. Barbara Fluegge advises executives, forward thinkers, and innovation leaders in ecosystems thinking and is driving Smart City and Smart Mobility initiatives. Both Ilaria and Barbara share the efforts of mobility-as-a-service to diminish infrastructure burdens and execute digitization efforts successfully to help citizens, governments, and businesses.

For more on how connectivity and advanced technology is shaping the future of transportation, see Connected Transportation: How Technology Will Change How We Drive.

 

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Barbara Flügge

About Barbara Flügge

Barbara Flügge leads smart cities and regions efforts at SAP. As a thought leader, she advises executives, forward thinkers, and innovation leaders in this area. She dedicates her activities to entire ecosystems beocming cities, ports, and mega events in digital and sustainable transformation. Barbara is a strong believer of innovation and digitization as a public good for everyone. She works on global scale and has in depth knowledge in public sector, automotive, manufacturing, telecommunications, and many other industries. Barbara is a recognized speaker, editor,and author.

McLaren Automotive: Racing Ahead With Real-Time Connected Intelligence

Richard Howells

McLaren Automotive’s entry-level 570S Coupé packs 562 horsepower that rockets the car from 0 to 60 mph in 2.9 seconds. But that’s nothing compared with the speed of the company’s real-time connected intelligence.

Based in Woking, England, McLaren designs and manufactures sports and luxury cars. Most are produced in-house at designated production facilities. And increasingly, the company relies on Internet of Things (IoT) technologies.

I caught up with Craig Charlton, CIO of McLaren Technology Group, in May at SAPPHIRE NOW, where we discussed McLaren’s IoT journey.

One strategy, four units, five transformers

McLaren is pursuing a single IT strategy: “to deliver core solutions, core platforms, and winning platforms.” But it needs to execute that strategy across four business units, each of which requires a different approach to IT:

  1. McLaren Automotive — Manufactures high-performance sports and luxury cars
  2. McLaren Racing — Races to win in Grands Prix and World Championships
  3. McLaren Applied Technologies — Applies advanced technologies and designs across markets as diverse as health and energy to achieve performance breakthroughs
  4. McLaren Commercial — Identifies and enriches partnerships to drive business success

The company is achieving its IT goals through its “Transformational Big Five:”

  1. Business platforms — Advanced business platforms support processes in each of McLaren’s four units.
  2. Cloud and mobility — With 2,800 of the company’s 3,400 employees on mobile devices, cloud is everywhere.
  3. Managed risk — By migrating from legacy systems, McLaren is reducing cybersecurity vulnerabilities and managing risk.
  4. People-centricity — IT is central to how McLaren’s people do business every day.
  5. Partners — McLaren has been co-innovating with SAP for more than 20 years.

Internet of (very fast) Things

But some of the most exciting IT at McLaren revolves around IoT. And as Craig explains, IoT is hardly new at McLaren. “We’ve been using IoT-type technology since 1993,” he says, “when we first put telemetry on our racing cars to analyze race performance.”

Today, at a typical race, the company has 150 to 300 car sensors tracking everything from tire pressure to brake wear to G-force. These sensors generate more than 100 GB of data every race weekend — producing 11.8 billion data points per season and 1080 race permutations in real time, so the race team can ask questions like, “How many times did Fernando Alonso pull 6G in the last race?” — and get the answer in two or three seconds.

“The data has truly transformed how we race,” Craig says. “Solutions like SAP HANA have allowed us to track billions of data points and look at historical data going back 24 years. In fact, we can analyze about 1 trillion data points.”

Fine-tuning race cars, transforming business models

What makes IoT mission-critical to McLaren is the ability to gain new insights to improve performance. By analyzing its Big Data, the company can identify nuggets that help it fine-tune its cars and be faster around the track.

But the company also expects to leverage real-time connected intelligence to improve the performance of its business. “IoT is going to change many organizations from being product-based to being service-based,” Craig predicts. “In the automotive industry, when we talk about autonomous cars, customers may be looking to buy a unit of travel rather than a car.”

For companies in the automotive and many other industries, business change is hardly slowing down. Real-time connected intelligence will help them stay ahead of the curve.

To learn more about McLaren’s IoT journey, watch Craig’s SAPPHIRE NOW presentation or listen to a one-on-one interview with Craig.

To see Craig and 50 other industry experts in person, attend SAP Leonardo Live, July 11 and 12 at the Kap Europa Congress Center in Frankfurt, Germany. The event will bring together a vibrant global community of up to 1,500 IoT, manufacturing, supply chain, R&D, and operations decision makers, influencers, analysts, and media. Learn firsthand from more than 50 SAP customer showcases how to connect IoT and core business processes to achieve digital transformation.

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Richard Howells

About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.

Taking Learning Back to School

Dan Wellers

 

Denmark spends most GDP on labor market programs at 3.3%.
The U.S. spends only 0.1% of it’s GDP on adult education and workforce retraining.
The number of post-secondary vocational and training institutions in China more than doubled from 2000 to 2014.
47% of U.S. jobs are at risk for automation.

Our overarching approach to education is top down, inflexible, and front loaded in life, and does not encourage collaboration.

Smartphone apps that gamify learning or deliver lessons in small bits of free time can be effective tools for teaching. However, they don’t address the more pressing issue that the future is digital and those whose skills are outmoded will be left behind.

Many companies have a history of effective partnerships with local schools to expand their talent pool, but these efforts are not designed to change overall systems of learning.


The Question We Must Answer

What will we do when digitization, automation, and artificial intelligence eject vast numbers of people from their current jobs, and they lack the skills needed to find new ones?

Solutions could include:

  • National and multinational adult education programs
  • Greater investment in technical and vocational schools
  • Increased emphasis on apprenticeships
  • Tax incentives for initiatives proven to close skills gaps

We need a broad, systemic approach that breaks businesses, schools, governments, and other organizations that target adult learners out of their silos so they can work together. Chief learning officers (CLOs) can spearhead this approach by working together to create goals, benchmarks, and strategy.

Advancing the field of learning will help every business compete in an increasingly global economy with a tight market for skills. More than this, it will mitigate the workplace risks and challenges inherent in the digital economy, thus positively influencing the future of business itself.


Download the executive brief Taking Learning Back to School.


Read the full article The Future of Learning – Keeping up With The Digital Economy

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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

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Why Millennials Quit: Understanding A New Workforce

Shelly Kramer

Millennials are like mobile devices: they’re everywhere. You can’t visit a coffee shop without encountering both in large numbers. But after all, who doesn’t like a little caffeine with their connectivity? The point is that you should be paying attention to millennials now more than ever because they have surpassed Boomers and Gen-Xers as the largest generation.

Unfortunately for the workforce, they’re also the generation most likely to quit. Let’s examine a new report that sheds some light on exactly why that is—and what you can do to keep millennial employees working for you longer.

New workforce, new values

Deloitte found that two out of three millennials are expected to leave their current jobs by 2020. The survey also found that a staggering one in four would probably move on in the next year alone.

If you’re a business owner, consider putting four of your millennial employees in a room. Take a look around—one of them will be gone next year. Besides their skills and contributions, you’ve also lost time and resources spent by onboarding and training those employees—a very costly process. According to a new report from XYZ University, turnover costs U.S. companies a whopping $30.5 billion annually.

Let’s take a step back and look at this new workforce with new priorities and values.

Everything about millennials is different, from how to market to them as consumers to how you treat them as employees. The catalyst for this shift is the difference in what they value most. Millennials grew up with technology at their fingertips and are the most highly educated generation to date. Many have delayed marriage and/or parenthood in favor of pursuing their careers, which aren’t always about having a great paycheck (although that helps). Instead, it may be more that the core values of your business (like sustainability, for example) or its mission are the reasons that millennials stick around at the same job or look for opportunities elsewhere. Consider this: How invested are they in their work? Are they bored? What does their work/life balance look like? Do they have advancement opportunities?

Ping-pong tables and bringing your dog to work might be trendy, but they aren’t the solution to retaining a millennial workforce. So why exactly are they quitting? Let’s take a look at the data.

Millennials’ common reasons for quitting

In order to gain more insight into the problem of millennial turnover, XYZ University surveyed more than 500 respondents between the ages of 21 and 34 years old. There was a good mix of men and women, college grads versus high school grads, and entry-level employees versus managers. We’re all dying to know: Why did they quit? Here are the most popular reasons, some in their own words:

  • Millennials are risk-takers. XYZ University attributes this affection for risk taking with the fact that millennials essentially came of age during the recession. Surveyed millennials reported this experience made them wary of spending decades working at one company only to be potentially laid off.
  • They are focused on education. More than one-third of millennials hold college degrees. Those seeking advanced degrees can find themselves struggling to finish school while holding down a job, necessitating odd hours or more than one part-time gig. As a whole, this generation is entering the job market later, with higher degrees and higher debt.
  • They don’t want just any job—they want one that fits. In an age where both startups and seasoned companies are enjoying success, there is no shortage of job opportunities. As such, they’re often looking for one that suits their identity and their goals, not just the one that comes up first in an online search. Interestingly, job fit is often prioritized over job pay for millennials. Don’t forget, if they have to start their own company, they will—the average age for millennial entrepreneurs is 27.
  • They want skills that make them competitive. Many millennials enjoy the challenge that accompanies competition, so wearing many hats at a position is actually a good thing. One millennial journalist who used to work at Forbes reported that millennials want to learn by “being in the trenches, and doing it alongside the people who do it best.”
  • They want to do something that matters. Millennials have grown up with change, both good and bad, so they’re unafraid of making changes in their own lives to pursue careers that align with their desire to make a difference.
  • They prefer flexibility. Technology today means it’s possible to work from essentially anywhere that has an Internet connection, so many millennials expect at least some level of flexibility when it comes to their employer. Working remotely all of the time isn’t feasible for every situation, of course, but millennials expect companies to be flexible enough to allow them to occasionally dictate their own schedules. If they have no say in their workday, that’s a red flag.
  • They’ve got skills—and they want to use them. In the words of a 24-year-old designer, millennials “don’t need to print copies all day.” Many have paid (or are in the midst of paying) for their own education, and they’re ready and willing to put it to work. Most would prefer you leave the smaller tasks to the interns.
  • They got a better offer. Thirty-five percent of respondents to XYZ’s survey said they quit a previous job because they received a better opportunity. That makes sense, especially as recruiting is made simpler by technology. (Hello, LinkedIn.)
  • They seek mentors. Millennials are used to being supervised, as many were raised by what have been dubbed as “helicopter parents.” Receiving support from those in charge is the norm, not the anomaly, for this generation, and they expect that in the workplace, too.

Note that it’s not just XYZ University making this final point about the importance of mentoring. Consider Figures 1 and 2 from Deloitte, proving that millennials with worthwhile mentors report high satisfaction rates in other areas, such as personal development. As you can see, this can trickle down into employee satisfaction and ultimately result in higher retention numbers.

Millennials and Mentors
Figure 1. Source: Deloitte


Figure 2. Source: Deloitte

Failure to . . .

No, not communicate—I would say “engage.” On second thought, communication plays a role in that, too. (Who would have thought “Cool Hand Luke” would be applicable to this conversation?)

Data from a recent Gallup poll reiterates that millennials are “job-hoppers,” also pointing out that most of them—71 percent, to be exact—are either not engaged in or are actively disengaged from the workplace. That’s a striking number, but businesses aren’t without hope. That same Gallup poll found that millennials who reported they are engaged at work were 26 percent less likely than their disengaged counterparts to consider switching jobs, even with a raise of up to 20 percent. That’s huge. Furthermore, if the market improves in the next year, those engaged millennial employees are 64 percent less likely to job-hop than those who report feeling actively disengaged.

What’s next?

I’ve covered a lot in this discussion, but here’s what I hope you will take away: Millennials comprise a majority of the workforce, but they’re changing how you should look at hiring, recruiting, and retention as a whole. What matters to millennials matters to your other generations of employees, too. Mentoring, compensation, flexibility, and engagement have always been important, but thanks to the vocal millennial generation, we’re just now learning exactly how much.

What has been your experience with millennials and turnover? Are you a millennial who has recently left a job or are currently looking for a new position? If so, what are you missing from your current employer, and what are you looking for in a prospective one? Alternatively, if you’re reading this from a company perspective, how do you think your organization stacks up in the hearts and minds of your millennial employees? Do you have plans to do anything differently? I’d love to hear your thoughts.

For more insight on millennials and the workforce, see Multigenerational Workforce? Collaboration Tech Is The Key To Success.

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