Five trends manufacturers should track
Greater digitisation brings both disruption and new opportunities
Five business trends are having an impact on global manufacturing in 2021, driving disruption and also widening opportunities for manufacturers, according to the research firm Gartner Inc.
"The first response to the global pandemic for many manufacturers was to go digital in their operations as fast as possible," said Michelle Duerst, research vice-president at Gartner. "While going digital is the right path, it is not enough."
The trends identified by Gartner, she said, can help chief information officers (CIOs) prepare for similar future disruptions in the long run. They will also be able to mitigate challenges such as a lack of customer touchpoints, entering new markets or product lines, or dealing with financial distress.
Ultimately, the five strategic trends can be acted on to help improve top-line growth by providing better experiences.
1. Digital+Product Experience: A combination of physical products and digital services represents unique product offerings to business-to-business (B2B) customers and consumers alike. At a time when pandemic lockdowns are limiting mobility, the combination of digital and product aims to address the challenge of providing an engaging platform that matches consumers' expectations.
This is not just about an additional service, but the ability to have a new digital business model, where manufacturers can maintain a connection with the consumer beyond the sale of the product. The idea is to connect more with the brand as well as with brand experts, other customers and advanced users.
Gartner predicts that by 2025, the top 50 consumer goods manufacturers will have invested in a brand app using AI, embedded technology in the product, videos as a digital asset and/or integrated innovation with IT and R&D teams.
2. Total Experience: Total experience is about how to use technology and interactions to enhance, empower and embolden both customers and employees to improve their lifetime value. Using this approach, CIOs can identify the right platform that will connect customers, partners and employees. For example, an employee acting as a brand expert or customer service agent to a consumer, answering questions.
Gartner predicts that by 2024, organisations providing a total experience will outperform competitors by 25% in satisfaction metrics for both customer and employee experience.
3. Ecosystem Partnerships: Global organisations can utilise ecosystem partnerships as an opportunity to grow not only in mature markets, but in developing markets as well. In manufacturing, ecosystem partnerships can enable all types of initiatives, such as earth-friendly packaging, enablement of underdeveloped or underserved communities, and emission reductions through remote work capability.
By 2024, 75% of the top 20 global consumer goods companies will engage in an ecosystem partnership contributing to growth and sustainability goals, Gartner has predicted.
4. Data Monetisation: Data monetisation offers the ability to obtain revenue from digitising products and services. Rapid digitisation within manufacturing organisations is creating large amounts of data. CIOs can share and monetise this data across the ecosystem.
Using this approach, CIOs can use information as an asset, and create new services or enter new business models. This can ensure continuous revenue even when the business is disrupted by external factors, such as supply chain challenges or a human resources shortage.
Gartner predicts that by the end of 2024, half of global asset-heavy manufacturing organisations will have succeeded in monetising their data.
5. Equipment as a Service (EaaS): EaaS is a commercial model where businesses pay for operational assets through recurring operating charges rather than purchasing equipment. In this model, embedded Internet of Things (IoT) technologies take advantage of common IoT design patterns and industry frameworks to ensure asset effectiveness and find solutions to asset non-performance.
Gartner predicts that by 2023, 20% of industrial equipment manufacturers will support EaaS with remote industrial IoT capabilities, up from a current base of near zero.