Hyper-connectivity involving products and services can not only leverage customer data to resolve issues faster, but it can also help to drive innovation to new heights. By John Barcus
Innovation is accelerating at an unprecedented rate with many industries changing, seemingly overnight. New competitors can come from anywhere, enabled by new technologies that can quickly disrupt long-established markets that seemed completely safe. Companies unprepared for this rapid innovation have a dismal future ahead of them.
While it may not be possible to anticipate every business issue, it is clear that reducing the time it takes to get customer and product insights incorporated into the process of product and service innovation can dramatically improve business outcomes. Digitally expanding the hyper-connected vision of Industry 4.0 to your customers, products, and markets provides a constant digital feedback loop to help companies better prepare for the future.
Hyper-Connectivity and the Digital Thread
While shop floor and asset connectivity have been helping manufacturers achieve significant quality and productivity improvements, they have been much slower to adopt a more holistic strategy to fully unlock the real potential that hyper-connectivity can bring. Connecting all aspects of the business by implementing a digital thread has the potential to change this. Automation and constant feedback loops throughout and beyond the enterprise will enable countless benefits across the business.
Enterprise automation is beginning to become more common. Most ERP services, for example, are able to handle the more mundane aspects of the business such as automatically paying for an invoice from a receipt or updating the manufacturing BOM from engineering updates. This capability across the business has become standard and expected. With the advent of the Internet of Things (IoT) and as ERP becomes more connected to devices, the idea of automated replenishment, predictive maintenance, and automated service are all on the way towards becoming much more commonplace as well – and for good reason.
However, even with the evolution of ERP through this new connectivity, there can still be significant gaps between business silos. For example, issues found in the field or production can sometimes take too long to get resolved because of a lack of insight in engineering, negatively impacting both quality and costs. Another reason is that customer issues are not always known or understood when updates or new designs are considered. Improving the digital connectivity both inside and outside the business is critical for a manufacturer to reach its full potential.
Connecting all aspects of the business by implementing a digital thread has the potential to create countless benefits.”
It’s not that this connectivity does not exist. There have always been feedback loops such as ECRs or product returns that provide valuable feedback on making product improvements. The difference now is that hyper-connectivity is allowing for significantly faster feedback and issue resolution. You can now know customer issues in real-time, providing the ability to act quickly and efficiently to resolve issues before they become even bigger problems. This connectivity and automation can significantly reduce the latency between problem identification and issue resolution, an outcome that companies should strive for. This will require connectivity to areas beyond the comfort levels of most manufacturers.
Direct Customer Insight
Through social monitoring, it is now possible to know in real-time what customers are thinking and how they are reacting to the products and services in the market. This information has been used for some time to improve customer satisfaction or to resolve specific customer issues, particularly in the hospitality industry. However, manufacturers have been slower to leverage this window into customer sentiment for engineering or innovation updates. This is partly because the impact may not appear to be the same and the prevalence of social feedback on B2B business interaction may still not appear as equivalent.
However, wherever there is a brand name that is used and recognized by the end-user, reviews and user feedback can have both immediate negative and positive impacts on future revenue. This is especially a growing area of impact for B2B businesses. As millennials continue to take over the workplace, social interactions in real-time to improve the customer or client experience are inevitable. The sooner a supplier can understand and address a problematic issue (with the help of social), the sooner that company can learn from the issue in order to better plan for updates and new innovations.
For example, recalls and warranty costs are big concerns for automotive manufacturers. In 2016, 53.1 million auto vehicles were recalled in the United States, requiring automotive OEMs to pay out $11.8 billion in claims. This does not include the loss of brand, reputation, or loss of sales that can have an even larger impact on their business.
A large contributor to these costs is the latency to identify and resolve issues. How many of these issues could have been resolved earlier to reduce the impact? It has been said that fixing a product in production can cost 10+ times more than fixing it in design. Even more astounding is that fixing a product in the field can cost 100+ times more than fixing it in production. While it may not be possible to eliminate all problems or their associated costs, reducing the latency associated by quickly identifying and resolving issues has the potential to dramatically reduce those costs.
After a popular, high-end SUV hit the market in 2014, for example, its manufacturer was able to identify and circumvent a problem through active social monitoring. The company’s team was able to see that new owners were complaining that the backseat cooling ventilation system was heating up the front passenger seat directly in front of it. Within weeks, the engineers were alerted and repairs were made to the vehicles that were shipped only weeks earlier. Without social monitoring, the negative impact could have been much higher as vehicles would have continued to be shipped with the defect until it was eventually identified and resolved. Every one of those vehicles might have required expensive retrofitting.
As another example, this same large automotive OEM was alerted that one of its vehicle models began experiencing “warm to the touch” steering wheels that were made of metal. The company then quickly removed the metal option, preventing potentially many disappointed owners. It is easy to see how either of these issues, not having been identified and resolved quickly, could have resulted in a significant negative impact. This digital thread to the customer is able to dramatically reduce the latency of identifying and resolving issues.
IoT connectivity is increasingly being used to improve efficiencies, extend automation, and reduce costs. As an example, IoT connectivity can be used to reduce downtime by monitoring equipment in order to anticipate or even predict maintenance requirements. However, greater business benefits come when these connections go from single purpose to multi-purpose. Using connected data for both service and for engineering/development significantly enhances the value of the connections. As an example, a producer of high-quality audio equipment developed and released a new product to compete in the highly competitive consumer-connected speaker market. In so doing, the company had to find a way to differentiate from some of the more established competitors.
By directly connecting their speakers in the field to their service organization, they were able to provide proactive and significantly better service. What is even more interesting is how they were also able to use this same connectivity and the resulting data to enhance future products and services. By identifying which features are being used or not being used by their customers, they are better able to prioritize which features to invest in. Features that were not being used could be discarded, while those with heavy usage were enhanced.
By better understanding how its products were being used by their customers, the audio equipment company was also able to proactively resolve a product issue before it became a larger problem. Customers were delighted when they received replacement units to resolve the issue without even requesting one. In addition, the company has been able to successfully identify new product opportunities based on the data highlighting how their products are being used.
For many companies, making this transition from a single pillar to a multi-pillar approach can be challenging as most of the connectivity or transformational projects are funded by a particular pillar with specific pillar objectives. That is the reason more and more companies are now seeing the value in business transformation initiatives such as Industry 4.0 or digital transformation that look across business pillars to transform the business. Hiring digital transformation officers and running enterprise transformation projects are helping companies take a more holistic approach in providing additional benefits to their bottom lines.
Taking this to the next level is an innovative 3D printer manufacturer that no longer even sells its printers, preferring to offer them only as products as a service. Constant monitoring has allowed them to provide a much better customer experience by being more proactive in identifying and resolving issues. In fact, most service calls are now proactive where the customer may not have even yet recognized that there might be an issue. Connectivity has improved the materials replenishment processes and provides a better experience for the customer.
Most importantly, this connectivity also allows the company to understand how its printers are being used, providing strong feedback loops that help it further improve products and services. This provides a better experience for customers, too, creating a true win-win situation for both buyer and seller.
It is estimated that automobiles now come with over 100 million lines of computer code. Compare this to the estimated 400,000 lines of code used in the space shuttle. This is a reflection of how automobile manufacturers are increasingly using software to differentiate and innovate their products. They are becoming much more successful at improving the overall user experience with software alone.
More and more frequently, software is becoming the differentiator for many of the products that we use. What is different now, though, is being able to quickly understand how customers are using the products — how to identify outstanding issues and how quickly those issues can be resolved. When we update our smartphone, computer, or watch, we have come to expect issues to be resolved and new features to be added. However, when Tesla offered semi-autonomous driving through a software upgrade, this completely changed our thinking of how innovation can be delivered to automobiles or other complex products.
Through social monitoring, it
is now possible to know in real time how customers are reacting to products and services.
As is the case in many other areas, the challenges of closing this part of the digital thread will not be in the technology alone. Automobile dealers benefit from the relationships developed with their customers. A visit to a dealership is an opportunity for additional services while also providing the opportunity to walk past the latest, shiny vehicles. Over-the-air updates stand to disrupt this relationship by reducing the times that you might go to the dealership. It is critical to understand the impact of how these technologies will impact your business while also understanding that new competitors may not be encumbered by the same constraints. Understanding the changing landscape, and preparing for the change, is critical to success.
Enabling the Digital Thread
As was stated earlier, speed of innovation is critical and companies must be creative in how they innovate. They must aggressively seek ways to shorten any and all feedback loops where information can help with resolving issues or accelerating new innovations. These sources of feedback can come from anywhere including the field, the shop floor, the products, and even directly from customers. Multi-purpose uses of connectivity and data provide the best opportunity for rapid improvement and having a company-wide transformation strategy is the best way to enable a holistic, more effective approach. It is now more important than ever to identify the options and technology opportunities to make this transformation possible.
When considering your move towards a more holistic approach to growing your bottom line, it is important to enable a digital thread by adopting services that incorporate hyper-connectivity across the business. This can provide the transparency needed to address issues and opportunities in real-time.
Additionally, remember the importance of breaking down silos so that all aspects of the business can learn from each other in order to maximize the opportunity for improvement. It is also important to remember that, while technology will be the enabler for many of these transformations, businesses may still need to overcome the cultural and other barriers to achieve required transformation. The rewards of transformational hyper-connectivity can be great as you improve quality and innovation at the speed of Industry 4.0. M