European manufactures are generally considered as some of the most advanced in the world. Despite that, when Fujitsu recently conducted a survey of manufacturers, we discovered that although 90 percent were clear that digital transformation was not just necessary but would have a big impact on their business model, only one third actually had put detailed strategies in place to make the most of the opportunity. I suspect this gap is even wider in other markets.
This underlines that when it comes to smart manufacturing, there’s clearly a tension between what manufacturers know and what they are doing. Let’s start with the issues that are clear and accepted by all manufacturers who have their eyes open.
The impact of changing consumer expectations
The first is that consumers are changing manufacturing forever. Manufacturers recognize this and talk less and less about ‘making products’ and more about providing the same products and support ‘as-a-service’ to the customer.
How did this happen? Somewhere along the line in the last decade, consumers grasped the concept that there are better options than outright ownership. Not only does it require a hefty upfront outlay, possibly financed on credit, it also leaves you liable for all the depreciation and maintenance costs of an asset that might only be used for a small fraction of the time.
This is already playing out in the archetypal manufacturing marketplace – cars. Here we see young, urban consumers switching away from ownership of an asset that is only used for a few hours a day – at the most – in favor of a per-journey, as-a-service-based consumption model. Alongside this shift, consumers want to buy products using their mobile phones – choosing anytime and from anyplace.
For manufacturers to respond to these demands, they must link back into the manufacturing operation in the widest possible sense. This means collecting data from the services arrayed around the product and create insights to help deliver better services.
This is what smart manufacturing delivers. It connects the end-to-end process, from sourcing, to procurement, to processing, to manufacturing, to warehousing, to distribution, to retailing – all automated within a process geared to give the end customer what they want, in the way they want it.
urban consumers switching away from ownership of an asset that is only used for a few hours a day – at the most – in favor of a per-journey, as-a-service-based consumption model.