Disrupt or die? Start with the fundamentals
Your digital strategy must be driven by a clear understanding of the customer’s needs and the way your products relate to them. Digital transformation doesn’t require a radical rethink of a business model that previously brought success – it simply means leveraging better, more efficient technologies to meet and exceed customer expectations and allow data to shape strategic priorities. Thomas Honoré, CEO of Columbus, explains how vital peer insight from early adopters can help manufacturers embrace disruption and stay ahead of the competition.
I often wonder if manufacturing organisations feel as if they are trapped in a Tardis, racing at the speed of light into uncharted territory.
No sooner have they embraced the Internet of Things (IoT) than the next big thing comes along. After getting ready for Industry 4.0, suddenly it is last year’s news and they are being told to prepare for Industry X.0.
Look at the big picture but start close to home
Trends are important, no doubt, because each market trend creates opportunities for disruption, and disruption is a business changer. But this disruption is not something that happens in Silicon Valley or Shanghai – it is happening right now, just outside your door.
Car-sharing schemes have disrupted car rental businesses, free newspapers have challenged print publishing, and online-only estate agents are taking market share from high street players. Almost every business is under siege from innovative rivals with better
digital skills – but that shouldn’t deter you.
Some studies estimate that up to half of all jobs will be threatened by automation over the next ten years, from pilot to auditor, accountant to estate agent. Accenture reports that 95 per cent of chief executives expect major strategic challenges regarding disruption and the fourth industrial revolution – and yet only 20 per cent of their organisations are prepared for this.
Automation is here – but innovation is still driven by people, for the people
In the rush to disrupt, we risk overlooking the fundamentals. It all starts with the customer. Do you really know what your customers want? Do you know where your product adds value – and where it falls short?
In a recent Columbus industry report, experts from Microsoft, Weetabix and BMW Oxford all agreed that in order to grow, manufacturers must listen to their customer’s needs and build a ‘Manufacturing 2020’ strategy that allows them to constantly meet rising expectations. As Gunther Boehner, Director of Assembly at BMW Oxford says in the report, “Manufacturers need to have a strong focus on their core processes, which directly relate to customers’ needs and pain points. Flexibility in manufacturing is key.”
We see too many companies still struggling to understand how their products are used. Making clever use of IoT presents a huge opportunity for manufacturers to get closer to the customer, but it only works if you have the organisation, processes and systems to make sense of that extra data.
Don’t go it alone
In this climate of continuous innovation there is a greater need for skills and technology – but for most manufacturers developing all these solutions in-house is not an option. Careful selection of technology partners is crucial because they will have a big impact on the ability to grow. Neil Clarke, head of business unit at Weetabix achieves this through smarter data management. "We are constantly growing our data visibility, through hardware and software”, he explains. “We are also using new machinery technologies to continually automate for consistency and lower costs. Live data gives real time feedback to the operator on what they need to correct."
So how do manufacturers of all shapes and sizes travel through the minefield created by external market forces, an increasingly demanding and connected customer, competitive pressure and digitalisation expectations? The key is to start with the fundamentals: people, process excellence, digital leadership and customer success. The peer insight compiled in the Columbus report is a great resource to guide manufacturers towards this vision of success.
Thomas Honoré is Chief executive of Columbus. He has more than 20 years leadership experience at tech firms including IBM and Oracle. He regularly writes and gives speeches on digitalisation.
