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We are long past the question of “to digitally transform or not-to-transform.” The digital economy is taking shape with every passing business day and the speed of change is accelerating. The first digital businesses like Uber and Airbnb are capturing headlines, investor mindshare and market cap, but the traditional businesses – especially industrial manufacturers, are also in a race to digitalize. And it is no surprise that the opportunity is enormous. Cisco estimates that $14.4 Trillion of value will be created by the “Internet of Everything” between 2013 and 2022. On the other hand, the cost of doing nothing could be daunting, as it could mean obsolescence in just a few short years.
Successful industrial manufacturers are leveraging digital capabilities to reimagine products, business models, and business processes. The digital leaders are creating smart, connected and context-aware products. STILL, a top supplier of forklift trucks, platform trucks, and logistics systems, is prototyping an autonomous, driver-less vehicle. This smart product will connect with customers’ ERP and warehouse management systems to drive value for both STILL and their end customers.
Some companies have created new business models and offer personalized and consumption-based services. Now the customer has the choice to purchase the equipment or its output as a service. Kaeser, a leading global provider of compressed air systems and services, sought to adapt their business model to customer demands for servitization, usage-based billing, and serving the “segment of one.” With the help of SAP, they re-imagined customer service by capturing over a million machine measurements a day in the field, enabling them to sell compressed air as a service.
Finally manufacturers are optimizing their business processes to reduce cost while dramatically improving performance. Harley Davidson made their business processes more collaborative and scenario driven by leveraging big data from sensors. SAP solutions enabled them to digitalize and optimize the manufacturing processes and thus save 7% of manufacturing costs and reduce delivery lead times from 21 days to 6 hours.
While the leaders are already deriving the value from digital transformations, a lot of organizations are still defining their digital strategy. Per an MIT Sloan and Capgemini survey, 90% of CEO s believe the digital economy will have a major impact on their industry. Only 25% have plans in place, and less than 15% are funding and executing on those plans. Increasingly, industrial manufacturers are turning to SAP, their trusted source of technology, for guidance in defining their approach toward a digital transformation. SAP’s point-of-view on digital manufacturing can be viewed here:
Link to Digital Manufacturing White Paper
In an effort to assist manufacturers in assessing their digital readiness, SAP offers two benchmarking surveys. These surveys complement each other: one focuses on overall cross-industry capabilities, while the other dives into industry-specific opportunities.
1. The Enterprise Digital Readiness survey:
This survey takes into account best practices leveraged by digital leaders, based on SAP’s research. Organizations can understand their maturity in best practice adoption around key dimensions of Digital DNA, Business Capabilities and Technology Adoption.
Click here to participate in the Enterprise Digital Readiness Assessment – takes only 15-20 minutes to complete
An example of the reports generated by this survey:
2. The Digital Industrial Machinery and Components Readiness Assessment survey:
Digital transformation maturity and adoption for each industry is different. This survey is specifically developed to address key business priorities of an industrial machinery manufacturer. Participants will receive a personalized report documenting the major industry-specific opportunity areas along the digital value chain. Click here to participate in this survey:
Digital Industrial Machinery & Components Readiness Assessment- takes 10-15 minutes to complete
An example of the output generated from this survey:
I invite you to participate in the above surveys to assess the digital DNA level or your organization and how your industry-specific DNA muscle is shaping up.
Sachin Bapat is a Senior Principal in SAP’s Value Advisory for discrete manufacturing companies. Before joining SAP in 2010, Sachin was General Manager for Ryerson’s fabrication business in the Southeast. While at Ryerson, he created and led the value realization practice for their large-scale SAP implementation project. His prior experience includes leadership roles in Customer Service, Training, and Program Delivery in the CNC Machine Tool Industry, primarily working for DMG Mori Seiki in Germany and the US. Besides English, he in fluent in German, Russian and Hindi. Sachin has an M.S. in Mechanical Engineering from the Byelorussian Polytechnic, Minsk and an MBA in Finance and Marketing from University of Chicago Booth School of Business.
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