Why IM&C Manufacturers Must Embrace Design Flexibility

Bernhard Meyer

Industrial machinery and components (IM&C) manufacturers are under unprecedented pressure to innovate their business models. Digital disruption is forcing dramatic shifts in business technology and investment strategies with far-reaching impacts on everything from asset management to customer engagement.

This sweeping disruption means that even today’s best-in-class IM&C manufacturers may fall behind if they do not aggressively embrace digital transformation. Today’s products are smarter and more complex. Embedded sensors and software support critical digital capabilities, but also complicate the design, production, and maintenance process. Embracing design flexibility can help IM&C manufacturers navigate the digital transformation and position their companies for future success.

How IoT is disrupting traditional IM&C business models

The Internet of Things (IoT) offers IM&C manufacturers the ability to achieve unprecedented levels of productivity, quality, and efficiency. The continuous sensing capabilities of IoT, for example, are enabling IM&C manufacturers to move into new markets and provide new products, services, and processes, not just modified ones. IDC forecasts that by 2025, 80 billion IoT devices will be online, creating 180 ZB of data.

IoT is especially important for IM&C manufacturers because it supports two major business goals: grow top-line revenue through product differentiation and reduce bottom-line costs. IoT makes it possible to drive more top-line revenue through connected devices, products, and services while also reducing bottom-line cost. Design flexibility is key for achieving both the top-line revenue boost and bottom-line cost reduction.

Two ways IoT design flexibility solves IM&C challenges

Industrial machines are incredibly complex. Siemens reports that IM&C manufacturers are under pressure from customers to meet several new production requirements. This includes designing tools that can be rapidly adapted to new products and building machines that can be quickly integrated into existing plants. Customers expect these machines to achieve maximum daily uptime. The machines must also to be built with enough forward-thinking design flexibility that they remain useful and productive as technology continues to evolve. Siemens calls these “mission-driven machines.”

Ideally, industrial machines should be built following a model-based systems engineering approach where designs and approaches can be reused for a variety of customers. Since every machine is customized – and time-to-market demands are critical – machinery manufacturers struggle to move quickly and efficiently. Consequently, today’s IM&C manufacturers face two key challenges. First, they need faster product engineering cycles and quicker time-to-market. Second, they are under pressure to deliver increased customer satisfaction via improved configure-to-order options that can be quickly integrated into existing systems.

IoT design flexibility addresses both challenges. A network of sensor-rich machines powered by IoT can enhance systems model options and streamline configure-to-order options for new customers. Real-time access to actual performance data and performance requirements enables continuous design improvement. IM&C manufacturers can efficiently fine-tune and customize designs without incurring significant costs, thereby growing top-line revenue through product differentiation and reduce bottom-line production costs.

Transform or be left behind: The urgent need for innovation

While 90% of all CEOs understand the importance of IoT for their company, only 15% have laid the groundwork by putting a concrete IoT strategy in place, according to a Sloan and CapGemini study. Without the groundwork in place, IM&C manufacturers cannot capitalize on these new opportunities. Worse, by moving too slowly, IM&C manufacturers cede ground to non-manufacturing companies, allowing them to compete in their space. UPS, for example, now has a 3D printing factory at its central shipping hub. Rather than waiting for delivery of an OEM’s spare part, UPS only needs a 3D file from the component manufacturer. UPS then prints this file and ships it.

IM&C manufacturers must be prepared to respond to changing market conditions with speed and agility. They must share real-time information with business partners and customers, transforming this information into actionable insights. And they must use these insights to formulate new products and services, change processes, and engage with their customers differently. This starts with IM&C manufacturers recognizing their core value chain and considering how IoT-powered designed flexibility can better optimize existing processes.

Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading Accelerating Digital Transformation in Industrial Machinery and Components.

Bernhard Meyer

About Bernhard Meyer

Bernhard Meyer has more than 30 years experiences in Discrete Manufacturing industries. Bernhard has been working for SAP for 18 plus years in SAP Solution and Business Consulting supporting leading Discrete Industry Companies in IT strategy, value assessments, and program management and implementations as well as in the Industry Business Unit for Discrete Industries supporting strategic customer engagements and owning the New Product Development process and Engineer-To-Order scenario. Before joining SAP, Bernhard worked at ABB Power and Alstom Power in Switzerland, Germany and Poland for more than 5 years in the turbo generator development, manufacturing, testing and selling. Bernhard Meyer holds a Master of Science in Electrical Engineering from the University of Electro Technic and Communication in Biel, Switzerland and two postgraduate diplomas in Holistic Management and Computer Integrated Manufacturing from the University in Baden, Switzerland.