The Intelligent Industrial Manufacturing Enterprise: Five Ways Forward

Judy Cubiss

Gone are the days when the industrial manufacturing value proposition was relatively simple: industrial manufacturers made products and delivered them.

Click here to register for the SAP Industry Forum 2020 Industrial ManufacturingNow, the industrial manufacturer’s job does not end with delivery. Driven by ever-more-demanding customers and supported by the widespread uptake of the Internet of Things (IoT) and the emerging power of machine learning and artificial intelligence, industrial manufacturers are developing new capabilities to track huge volumes of data generated by thousands of devices and are adjusting their service depending on the circumstances.

The goal is to be more responsive, always-on, and highly adaptable. Industrial manufacturers seek to collaborate more fully with their customers from discovery through design, service, and beyond. Wherever possible, they aim to deliver the kind of experiences and outcomes that customers reward with loyalty and ongoing business.

But how do companies move forward? Successful ones are focusing on the following five strategic priorities:

Be customer-centric

Industrial manufacturers are looking for ways to maintain customer-for-life relationships based on a 360-degree understanding of their customers. The starting point is a holistic view of their customers’ business processes – ending with the knowledge of how those customers use the products in their daily operations.

To get there, industrial manufacturers are moving toward omnichannel models for managing customers’ interactions across channels (Web, direct sales, IoT, and more). The goal is seamless interactions with customers, the ability to quickly see all products bought, and real-time visibility into how products are performing. This will help companies position the customer’s point of view at the center of every decision.

Serve the segment of one

Increasingly, industrial manufacturers will be able to deliver completely customized products, services, and solutions that precisely fit the needs of individual customers based on sophisticated platform, configuration, and mass-customization strategies.

Industrial manufacturers are moving toward this goal by rationalizing existing product options using machine learning to understand what really sells and what doesn’t. In addition, organizations are pulling in customer experience data to better understand requirements – and then using this data to inform requirements in product configurators that let customers define their own products on the fly. 

Embrace digital smart products and solutions

Industrial manufacturers are shifting to products with more digital functionality, allowing even more flexible configuration of products. Thus, software-based features are on the rise with connectivity to enable remote access and monitoring.

Industrial manufacturers are extending original (physical) products with digital services that augment and extend product functionality. Combining insights into the end-user experience and the relevance and value of digital capabilities, manufacturers will extend the lifecycle of the product and increase lifetime revenue. With a direct feedback loop from the product back to the manufacturer, product enhancements and future developments will be based on the actual usage and experience of the product, from first interaction to product retirement.

Implement the digital supply chain and smart factory

Supply chains and manufacturing networks are becoming modular and flexible to allow the seamless execution of different manufacturing strategies. Industrial manufacturers, accordingly, are using Industry 4.0 philosophies and new digital technologies to implement “shop-floor-to-top-floor” connectivity for real-time visibility.

Subsequent steps will increase machine-to-machine connectivity and collaboration, allowing autonomous decisions based on sensor data and machine learning algorithms. Industrial manufacturers will combine feedback from connected stakeholders (customers, workers, suppliers) and associated processes to further improve overall manufacturing and supply chain performance. Intelligently connecting manufacturing, logistics, and supply chains enables companies to quickly address short-term demand impulses, supply fluctuations, and changes to customer orders, allowing a truly modular production process. This production flexibility enables industrial manufacturers to produce higher-quality individualized goods at lower costs.

Develop service-based business models

As revenues are increasingly linked to services that are based on and built around smart products, more industrial manufacturers will offer products as a service based on the value delivered to the end customer.

Remote condition monitoring of assets is critical to success with such models – enabling manufacturers to identify and provide additional value-added services. Based on the data collected, organizations can get better insight into how products are used. This enables them to offer pay-for-outcome models where the risk and long-term value of each customer is clearly understood.

The future is bright

Ultimately, the winners in the industrial manufacturing industry will be those companies that successfully transform themselves into fully customer-centric companies. Ahead for the industry is unprecedented change at unprecedented speed – but our industry is positioned to be a driver of progress. Together, we can lead the way.

Join our virtual event to learn more

Want to find out more about the latest trends and innovations in today’s global industrial manufacturing business? Register today to join our flagship 60-minute virtual industry event:

SAP Industries Forum 2020: Industrial Manufacturing
Experience the Intelligent Enterprise
Thursday, March 26, 2020, 8 a.m. PDT, 11 a.m. EDT, 4 p.m. CET
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Judy Cubiss

About Judy Cubiss

Judy Cubiss is Global Marketing Lead for Industrial Machinery and Components and Automotive at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.