Editors Note: DBizInstitute is excited to share this article, written by Dr. Setrag Khoshafian, with our community and in advance of his new book release. Keep an eye on our website as we share additional articles in the coming months written by Setrag, as well as a pending Meet the Author webcast [7]to discuss his new book 'How to Alleviate Digital Transformation Debt' expected to air Fall 2021. Be sure to pre-register! This article was originally published on CognitiveWorld.com on December 11, 2019.
Digitization is having a significant impact on sectors across all industries. Manufacturing in particular is in the midst of a major digital transformation shift, often characterized as Industrie 4.0 [8] (a.k.a. Industry 4.0 or Smart Manufacturing [9] (primarily in the US)).
The transformation that manufacturing has seen goes beyond the confines of intelligent factories [10]. With smart products [11], customers and businesses are increasingly “connected.” This “connectivity” includes the Internet of Things (IoT), but it also involves Artificial Intelligence (AI), and End-to-End Value Stream digitization and automation. New business models are emerging and transforming (even disrupting) age old Manufacturer-Distributor-Customer Relationships. Connectivity with AI, evolved CRM, and end-to-end value streams are enabling new opportunities for Innovation, which is involving the Customer with ever increasing demands for Personalization.
These are the main contributing factors:
- Digital Transformation Technologies: From the bottom-up technology perspective, the Industrial Internet of Things [12] (IIoT), Artificial Intelligence [13], Three Dimensional (3D) printing [14], Augmented Reality [15] (AR), Digitization of Value Streams [16] through Digital Transformation (Low Code/No Code) platforms [17], Robotic Automation [18], and more recently Blockchain [19] enabled cryptocurrencies [20], are among the key pillars driving this shift. Each of these enablers on their own are already having a significant impact on Manufacturing. Their combined effect is a formidable digital transformation tsunami that will sweep away those that are slow to adapt and lag behind. Furthermore, digitization is enabling a shift from isolated and siloed business practices to digitized and automated Value Streams: customers, dealers, suppliers, and manufacturers all participating in continuous innovation.
- Cultural and Business Model Shifts: The ramifications of this tsunami are being realized in a new Costumer-Manufacturer Relationship culture. Manufacturers used to be reactive and relied on time consuming surveys to assess the business impact of their products or assess customer experience feedback. Now, they are always connected to the products and through the smart products, they are also always connected to the customer. Now, the customer is growing increasingly demanding and is getting involved in personalizing or recommending innovation for product offerings. The innovation is not just in the capabilities of the products, it is also in new financial transaction models. Age old assumptions about product ownership are being challenged. From cars to appliances to just about any manufactured product, the shift is to either lease or buy business value-based purchases. Product-As-A-Service [21] is becoming a reality: learn how the product is used, offer new services, offer Pay as you Use, pay as you Get Value–payment that makes sense in a digital era!
Through these factors, there are now unstoppable disruptive changes in the way Customers and Manufacturers interact with each other. The demands and sometimes the involvement of customers in personalization, as well as the deep understanding of the Manufactures as to how, when, where their products are being used are empowering a new dynamic shift in Customer Relationship. Manufacturers are becoming extremely aware of the Customer effectiveness of their smart products: what works and what needs to improve. This is really a cultural shift through proximity, deep understanding (enabled through AI empowered CRM [22]) and speed in responsiveness (enabled through smart manufacturing through DX platforms [23]) for the Manufactured products. It is also a shift challenging traditional norms and assumptions– especially in sales and “ownership” of manufactured products. What is often overlooked are the disruptive engagement implications of this digital proximity between the Customer and Manufacturer.
The most profound impact of this shift is entirely new models and pragmatic possibilities within Customer Relationship Management (CRM)–especially through IoT connected devices. We are evolving from omni-channel to omni-device: Connected devices are offering numerous opportunities for optimizing the customer experience. With Manufacturers understanding their customers through connected devices, coming up with new product-as-a-service offerings, providing extreme personalization possibilities for the customer, leveraging AI as well as digitization of value streams within CRM to service the customer–all of these factors are fueling a new era in Customer Engagement through Manufacturing.
Very much a disruptive, but exciting, cultural shift.
After all, Culture always trumps Technology [24]!
