Smart Changes for the Future of Manufacturing

In 1962, when the TV show started, most people thought the world The Jetsons represented was incredibly far away, or impossible. Some feats we’ve yet to reach, but many we have achieved or they’re in our grasp. We’ve been talking via video for over a decade, and we’re interconnected in ways George and Jane Jetson probably couldn’t imagine. We may be years away from flying cars being accessible to the masses, given their price tag, but in May, Mercedes-Benz displayed their sleek self-driving car in Shanghai and already we see elements of self-driving cars in current, often bought models like Toyota Prius, Ford Focus, and Volkswagen models.

A recent Harvard Business Review article, How Smart, Connected Products Are Transforming Companies, is the second in an astutely researched and well-written two-part series on the intelligent, interconnected products of today and how they are changing the way business is done. The second part of the series focuses on the latter. The authors are good to remind us that smart, connected products have three main elements: physical components, smart components, and connectivity components. Why is it important to be reminded of the electrical parts, sensors, data storage, ports and networks? When these components are successfully integrated, new product capabilities occur and big things happen.

Monitoring, controlling, optimization, and autonomy

 Two ways in which products have evolved, as pointed to by the authors of the HBR article, are their abilities to monitor and report their own state and their surroundings. The data that can be extracted from this reporting can create powerful tools for change and improvement. Second, new intelligent products can be controlled by users. This gives the power to the user, often remotely, to be able to manipulate the product and the environment to increase safety and efficiency. From monitoring and controlling comes optimization and autonomy. Products are able to both connect with larger systems creating a “smart space” or they can work on their own, adapt to their environment and act on their own.

Scope

What do these new capabilities mean for businesses? Businesses need to be adaptable, forward-thinking, strategic and prepared to ask many questions. The article poses 10 critical questions, they deem “implications for strategy”. One of the key questions—and perhaps the most broad—is: “Should a company expand its scope?” Many things need to be reviewed as manufacturers enter the world of smart products. Are they able to compete with current products? Can they make the product scalable? Do they have the proper IT support or the ability and funds to outsource? Do they have the staffing to properly analyze data, manage network breaches, focus on customer training and success?

If the goal is to bring products forth that are smart, connected, and innovative, these questions must be asked. If there’s a desire to dive in head first, take a deep breath, ask the important questions, and consider finding partners who can plug the holes your challenges or deficits create. For example, can you outsource your IT networking or business analytics needs?

Product as Service

The new route for many businesses, especially those in software, is to turn products into operating expenses rather than capital expenses. According to the article manufacturers have lessons to learn from this trend, “Many of the organizational shifts that smart, connected products are bringing to manufacturing mirror changes that have already taken root in the software industry. This is not surprising, since the evolution to smart, connected products requires a traditional manufacturer to build what is essentially an internal software company.”

By offering software and products on a subscription basis, so that companies can scale their products over time, they may meet their needs without feeling they are taking such a risk. ROI is realized quickly, and hopefully reinvested into the next subscription package or new product.

It’s not often one comes across an article that synthesizes and aligns with one’s own business philosophies, practices, and predictions. The HBR article is overflowing with knowledge as well as practical suggestions for any company, manufacturing or otherwise, hoping to make it in today’s smart, connected world.

 


Source: Blog