Amazon, Uber, Zappos and many other online brands & ecommerce businesses have proven on-demand approach in which the products must work and service must be immediate. This approach has caused a shift towards servitization for manufacturers. Servitization is a transformation process which involves firms (often manufacturing firms) developing the capabilities they need to provide services and solutions that increase their traditional product offerings. Manufacturers are seeing this shift due to the advancement in latest technologies and data availability plus growing appetite of the society for subscription based services. Here are the top 10 market disruptions transforming manufacturers:
1. The latest technologies such as the virtual reality and 3D printing continuously impact organizations across a variety of industries and verticals. Manufacturers must be equipped to use evolving technologies and emerging trends for their benefit in order to become more efficient and effective. The internet of things (IoT) will improve visibility across supply chains, accelerating business decisions and companies to be more responsive to customers. Investing in the proper technologies that will support the new service model is the only way to maximize product uptime.
2. The present state of affairs is not sufficient and now is the time for the companies to benefit from the changing times; otherwise they run the risk of losing their customers in the process. This shift is impacted by various external forces as well. These disruptions and any future ones have to be adapted by the manufacturers by having technologies and strategies prepared that can grow and scale with the changing landscape.
3. Manufacturers should also expect a shift to an online presence in service part sales due to the change from brick-and-mortar sales into a more digital, web-based sales model. Companies never considered digitization before as it was extremely expensive. But now as the technologies support this change, it is finally becoming more attainable and affordable to implement, track and optimize.
4. Manufacturers are trying to find new and alternative ways to enhance the customer experience and increase margins and revenue, and simultaneously facing new kind of competitors, including the main ecommerce players like Amazon and Alibaba. The ecommerce wave is here to stay, so the advanced after-sales service solutions and sophisticated emerging technologies have to be embraced by those who want to survive.
5. Artificial Intelligence (AI) and predictive analytics are playing an ever larger part in the service supply chain as there is enormous focus on maximized product uptime as the key to organizational performance. At the core of a service model is preemptive maintenance and it is centered on maximized product uptime. The only way to make this possible is predictive analytics.
6. Proactive maintenance is the latest profit lever for the manufacturers as there is a change from ownership to access which means that the new product sales are not going to cut it to meet revenue expectations anymore. Stable profits necessitate service supply chains that operate smoothly. The unexpected product downtime causes the loss of productivity which can be combated by predictive analytics and proactive maintenance.
7. Manufacturers can benefit from this opportunity by evolving their after-sales service organizations to focus on maximized product uptime. A shift from the break-fix service model that is favored at present to the one where the products are preemptively repaired before they ever fail is the key here. Due to the changing marketing strategies, the manufacturers will be compelled to re-evaluate how they handle after-sales service. Manufacturers can understand how to sell subscription-based and uptime service contracts rather than only individual service parts.
8. Reinvent your organization by benefiting from the latest trends and turn them into opportunities. In terms of relevance, consumer attention, or rapid escalation of design ideas, products don’t have as long a lifespan and manufacturing organizations need to pick up the pace. Each device is becoming connected, intelligent, and aware which has main implications in terms of the way devices are designed and manufactured. Manufacturers all of a sudden find it necessary to have an advanced computer and connectivity technology and that their products should have a sophisticated user interface capabilities.
9. In many industries crowdfunding is the new garage. The global connectivity provided by the crowdfunding business model is resulting in a change in product conception. Anyone who has an idea can fund it, design it, and suddenly bring it to market. The situation is that small scale projects can prove to be way ahead of than even the established industry players.
10. The winner is usually the one who is comes up first in the market with a new idea. There are incredible advances in the capacity to conceive, design and develop new products and your competitors will pick on this if you can’t. Rapid design and prototyping is the way to quickly mock up the future state of a system.
Conclusion: Manufacturers have to center their organizations around maximized product uptime as the expectations of the customer are changing in addition of the market disruptions listed above. These disruptive changes can be navigated through an entirely new lens which one focuses on intelligent algorithms based on customer behavior and the landscape of product demand. The eventual compass for modern organizations will be the smart after-sales service solutions and the maximized product uptime is woven into each phase of the after-sales service experience.