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ML Journal August 2022

M2030 Perspective: The Manufacturing Metaverse

M2030 Perspective: Is there value for manufacturing in the future metaverse?   

Businesses around the world took note when Facebook announced in October 2021 that it was changing its name to Meta Platforms, Inc., formally focusing the company’s future around the concept of the metaverse.

There’s since been a lot of interest from manufacturing companies on this topic. The Manufacturing Leadership Council’s webcast on the metaverse, for example, hosted in May as part of its Manufacturing in 2030 Project series, drew one of its largest audiences ever.

But is there value for manufacturing in the metaverse?

A number of questions routinely come up in conversations with manufacturing companies about the metaverse. Will adoption live up to the hype? What is the business opportunity? Why invest in the metaverse? Where in the value chain should companies invest effort to realize the benefits? And how can manufacturing companies get started?

Defining the Metaverse

First, it’s important to develop a solid understanding of what the metaverse means. That, of course, is easier said than done. There’s a lot of buzz and many points of view swirling around, so we’ll offer a more simplified one: The metaverse is the next generation of the internet—a virtual, interconnected reality seamlessly woven into our physical world. In other words, it’s a convergence of digital and physical environments.

Most common definitions include three key components:

  • Digital environments, such as Horizon Worlds or Oculus
  • A mechanism for interacting with those digital worlds through augmented reality, virtual reality, or even brain-computer interfaces
  • A commerce engine in the digital world, such as Web 3.0, non-fungible tokens (NFTs), or blockchain

But there is a fourth component that isn’t often found in other definitions: Autonomous X. There is a digital transition underway in many industries–from connected, to intelligent, to autonomous. Consider the example of a factory. Companies can use 3D renderings to engineer and design a factory. Through IoT connectivity among products, manufacturing operations, vehicles, and buildings, people can now begin to monitor factory systems more intelligently. In the future, digital twins will manage those buildings, making Autonomous X the fourth element of the metaverse.

“The metaverse is the next generation of the internet—a virtual, interconnected reality seamlessly woven into our physical world.”

 

 

The other key aspect of Autonomous X for manufacturing is that it allows persistence without human intervention. If you are in a virtual game with three other people, and they leave, there is no activity—or persistence—in that virtual world. But in manufacturing, there can be persistence without human intervention. In an autonomous building, a digital twin with intelligence can maintain the HVAC, security systems, and environmental controls so that both the virtual and physical worlds can continue to operate. That is why it is important to consider the Autonomous X factor when defining and thinking about the metaverse in manufacturing.

Some Elements Already Exist

There is a lot of excitement and many hypotheses about what the metaverse may look like in manufacturing, including the potential for full, virtual stores with digital-only products that create new revenue streams.

Here’s how I described what this may look like to my 11-year-old daughter: Imagine you’re watching a US Women’s National Soccer Team match in Oculus. Kristine Lilly scores a goal. Then an ad pops up asking if you’d like the same soccer cleats. You click on it and select the option to customize the cleat with your school logo and put your name on the back. Press the button, Nike manufacturers it, and ships it to you in three days.

That’s just one example of how the metaverse could drive convergence between entertainment, customer experience, customization, and manufacturing. Many of the building blocks for this scenario exist today, suggesting that this future may not be so far away. But it will be more of a practical progression, rather than a sudden shift, toward this new future state.

Where Executives Stand Today

 West Monroe recently surveyed 150 C-suite executives from a cross section of industries, including consumer and industrial products, to understand their current views about the metaverse.

  1. Is there business value? Most executives believe the metaverse will present business value for their organizations over the next one to five years: 57% believe it has some potential business value, and 29% believe it holds significant business value. However, viewpoints differ by industry. Consumer packaged goods manufacturers are the most optimistic with 43% of CPG executives believing the metaverse holds significant value for their organizations.
  2. Where should you invest? Many businesses have already begun exploring augmented reality and virtual reality technologies that will play a significant role in the metaverse, or they plan to start soon. Results of the survey showed a slight leaning toward external use cases such as improving marketing campaigns or customer experience: 45% of companies are exploring these technologies now for external use, versus 39% that are actively looking at internal use cases.

Consumer packaged goods and industrial manufacturing companies are more likely than average to be planning for external uses in the next 12 months. This could include field operations and maintenance, where augmented reality applications are already being deployed today.

How to Start Exploring the Manufacturing Metaverse

Become educated: The metaverse is a rapidly evolving concept, and there are many points of view about what it is and what it means. Following the trends is critical. Even if your organization isn’t ready to fully invest today, it should be willing to experiment and be thinking about the future, because it’s likely that your competitors already are.

Create cross-functional innovation teams to begin building and testing the strategy: The best metaverse opportunity could be in research and development, manufacturing, sales, marketing, or another area across the value chain. We don’t yet know what applications will have the greatest impact for the manufacturing industry, and it will likely vary by company. Creating cross-functional teams increases your organization’s ability to identify, evaluate, and prioritize the best use cases.

“The metaverse could drive convergence between entertainment, customer experience, customization, and manufacturing.”

 

 

Identify potential sources of value: If you haven’t read the terms and conditions of Oculus, you should. Consider this: You are essentially providing Mark Zuckerberg with a window into your house and life. The data that can be gathered is breathtaking, and scary. They can read your eye patterns to understand what interests you, know the size of your hands, and see everything that’s in your bedroom (or whatever is in view, wherever you play). There are massive privacy concerns here—another topic for another time—but the point is that there is a tremendous amount of data that can be gathered via the metaverse. Just imagine what could be done with this information. There will be other more direct sources of value, but it’s imperative to have your cross-functional team think beyond the obvious sources. This will help direct your organization in the next step of identifying where to pilot and test.

Think big, start small, and act fast: There will be strategic choices to make. Do you want to be part of building the new infrastructure? Do you want to monetize content and virtual assets? Do you want to create B2B or B2C content or even inward-facing experiences such as customer showrooms, virtual conferences, or remote collaboration solutions? Or do you want to attract existing customers and/or prospects through advertising? You need to be strategic but also remain practical as you begin testing and validating the opportunities.

Pilot, monitor, and report on metaverse-related initiatives: Innovate and test practical use cases while also keeping a close eye on where the industry is creating critical mass. This will help create a flywheel effect. Without an institutionalized process to monitor, report on, and test opportunities, you could potentially be disrupted rather than leap-frogging the competition.

Most of all, stay practical: All of this is emerging at a time when manufacturing organizations are still adjusting to the upheaval of the past two years. It is critical to be strategic and proactive, but at the same time remain practical as companies look at the potential of the metaverse in an industrial setting in the years ahead. M

About the author:

Randal Kenworthy is a Senior Partner, Consumer and Industrial Products, at West Monroe.

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