Tech Trends in Manufacturing – Digital Transformation Amid Disruption

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The global economy is in the midst of the Fourth Industrial Revolution: with a merging of artificial intelligence, robotics, the Internet of Things and other innovative technology and data-driven components that make our lives easier. Industry 4.0 has embedded itself into manufacturing, and it’s affecting the industry in a significant way — through data, customization and a better customer experience.

By optimizing available technology, manufacturers can curate a better experience for customers by leveraging the insight from Customer Relationship Management (CRM) systems to provide clearer, more direct communication with deeper knowledge and understanding of customer needs.

Given the vast knowledge that manufacturers have about their products and how to use them more efficiently, many are beginning to offer products-as-a-service. By offering complementary solutions to their products, manufacturers can continue to dominate their areas of expertise by providing an end-to-end solution.

For example, an aircraft manufacturer might also offer an analytics service. This solution would alert customers about maintenance and other useful efficiency analytics. What was once provided by a third party for is now being offered directly from the manufacturers.

It's imperative for manufacturers to shift to a digital-first mindset to stay relevant.

Research Indicates Manufacturers are Overcoming Tech Challenges
Research by the National Association of Wholesaler-Distributors follows the trend of manufacturers branching out on their own for their technology needs. Digital opportunities, such as creating websites and more robust in-house marketing efforts, have led to a lost link in the supply chain: the replacement of distributors in some respects. Manufacturers have created their own ecommerce experience for customers out of frustration with distributors not prioritizing a digital presence.

Technology and Automation

More and more manufacturers are incorporating artificial intelligence (AI) and the Internet of Things (IoT) into their warehouses and workflow. IoT sensors provide valuable information about nearly every process, including inventory, supply chain, production line and transportation. With the addition of AI, IoT products can use the information they’ve gathered to perform analytics and improve processes, make forecasts and reduce inefficiencies. AI opens up the possibilities for maintenance forecasting, warehouse management and supply chain improvements.

Companies are integrating technology into their production processes to enhance human effort. Augmented Reality and Virtual Reality are used for training purposes, product visualizations for inspection and design, and enabling remote work. Robotics are also being introduced to the production line to work alongside employees.

As manufacturers begin to adopt automation and more advanced technologies, they need skilled workers to operate the equipment and manage the process. Unfortunately, there is a supply-demand gap in employment. Industries need the new, young hires, but those potential applicants are looking toward trendy, high-tech, forward-thinking companies. In addition, these millennials are also almost one-third of customers. Manufacturers are faced with two problems at once: modernizing their workforce and updating the way they interact with customers by offering more engagement.

Most employees in the manufacturing industry are over 50. These aspiring retirees will take their company, as well as their industry-specific knowledge, with them when they retire. Manufacturers need to capture this data and knowledge in digital systems so they can continue to leverage the information with future employees, while also attracting new talent to learn the tricks of the trade.

Manufacturers are faced with a bleak future unless they do two crucial things:

  • Adopt more of the characteristics millennials are looking for in a prospective employer, such as opportunities for advancement, continued education and a positive work culture.
  • Use internal tools to not only modernize their workplace but also institutionalize knowledge within their company by capturing the data needed to succeed in the future.

Data and analytics are essential to agility, strength and business continuity for manufacturers. The right data delivered to the right person in real time enables employees to make effective changes that can immediately improve your bottom line. Manufacturers are also empowered to respond quickly in the face of potential disruption.

Digital Transformation in Manufacturing

In 2015, McKinsey found that only one-third of the manufacturing industry was digitally mature. COVID-19 certainly sped up the implementation of new technology; however, despite the lower cost and easy-to-use technology, many manufacturers still lag with their adoption and modernizing their work processes, especially in comparison to other industries. Beyond providing greater insight into your company, technology and artificial intelligence can also help manufacturers create a more customer-centric perspective.

Oftentimes, manufacturers leave it to the distributor to find the customers. This process means that manufacturers don’t have a direct connection to their end customers, which translates to a lack of feedback on how their products work or customer satisfaction in general. In order to become more customer-forward, manufacturers need to work more closely with their distributors to create a positive experience for customers.

Create a plan, together, for how to be more customer-centric while implementing the tools and technology needed to capture this data for the future. Taking the time to learn and understand your customer yields significant ROI.

Manufacturers can become more customer-centric by:

  • Streamlining interactions with customers
  • Creating an ecommerce experience
  • Gathering data about customer transactions and browsing history
  • Personalizing marketing efforts for particular customers

The companies that succeed will be the ones that shift their focus from solely their products to one that encompasses the customer’s point of view. Adopt the technology then leverage the data it provides to create a better buying experience.

Customer relations and end-to-end digital transformation are crucial to success.

Future State

Although all this talk about technology might seem daunting, the implementation process can begin with something as simple as updating your CRM solution or your website to be more customer-friendly. If a customer has a question or wishes to request a product update, it should be a process they can complete — simply — online.

With over a year of remote working, combined with the advances in technology that customers experience when buying personal items, the manufacturing industry must accept that customers expect the same kind of responsiveness and engagement with their distributors. Customers want personalization and easy-to-navigate digital interactions.

Leveraging the knowledge gained from a data-driven CRM system, manufacturers can begin tailoring their interactions with customers to be more personalized and specific. They can anticipate customer needs based off previous purchase orders or browsing history.

Oftentimes, manufacturers might have Salesforce, or another CRM solution, but they suffer from low adoption and usage among their sales team. However, pulling useful data from the CRM enables both sales reps and operations managers to see where each customer falls in the sales process at any given time, from a single location. Successful implementation of CRM systems can increase productivity and customer service.

ERP systems are another useful technology that manufacturers can benefit from adopting — successfully. It’s one thing to have the technology and another to use it to its full capacity. ERP systems can help with inventory management, picking orders, warehouse visibility, increased efficiency and providing useful data and product insights at any time.

The manufacturing industry will truly be digitally transformed, data-driven and responsive when customers are able to digitally interact with their suppliers, have their needs anticipated and purchase products and services that are tailor-made for their uses.

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