The Rise of the Machines
Manufacturing has changed. There’s new tech in the assembly line, new tech in the product itself, and finally in the value-added services, creating a whole new way of engaging with the customer.
The opening scenes of Modern Times, Charlie Chaplin’s iconic 1936 film, show him unable to keep up with the gruesome pace of an assembly line. But while some parts of the film are depressingly familiar, manufacturing has changed hugely. Irrespective of industry, products are increasingly high tech, whether it’s imbued or embedded. Products are becoming increasingly intelligent. The separation between their physical and virtual or digital attributes is blurred.
Examples are everywhere, from the Nest thermostat, which uses a learning system that programs itself, to Nike (Bloomberg Business Week, “Sorry, Nike. You’re a Tech Company Now) which with its data capture and personalized gear, looks more like a tech company than a sportswear manufacturer. Somewhere between 40-60% of the value of a modern product is now in its software.
There are some major implications to this. All sorts of machines and products are already made to network and connect to the digital world straight out of the box. Manufacturers are not just selling a product and walking away – there’s now an ongoing value proposition to consider too.
The chief opportunities here are unlocked by using remote monitoring to add new services, such as predicting when a machine might fail, alerting when it’s not being used correctly or even rapidly engineer customized offerings based on real-world, real-time feedback.
With embedded sensors capturing large volumes of real-time data, the ability to be successful depends on being able to make sense of and monetize the data. With 50 billion devices forecast to be internet enabled by 2020, our ability to harness that information depends on us having the infrastructure in place to
take advantage of it, and to match the right service with the right product.
We are now seeing products become platforms that drive impressive new services in ways that were just not imagined when the products were first designed. Consider the way humanitarian relief operations crowd source information in real-time from smart phones after natural disasters, or how McLaren, an SAP customer, harnesses the power of big data from sensors in cars to win more races and design better race cars.
The competitive playground is shifting – the emphasis is not so much how something is made, but how it talks to the customer, to the vendor and to its manufacturer, as well as to other products.
Manufacturers must consider these new business opportunities, envision soft services they want to sell on top of their product and engage customers in a different way. Software and communication technologies are reshaping the world, amplifying our ability to process information in unprecedented ways. Harnessing these disruptive technologies to capture and monetize new business opportunities transforms manufacturing industries as we know them.
What do you think about the issues discussed here? Continue the conversation in the comments below and on Twitter @SAPhightech.