Updated: Dec 20, 2019
The digitalization of businesses across all industries is happening rapidly, and there is no turning back. Companies are looking for new ways to deliver value to their customers using digital channels and creating personalized, digitally enabled products across all sectors, from consumer products to heavy equipment and machinery.
The industrial machinery and components (IM&C) industry is at the heart of this shift, providing the intelligent machines and equipment needed for this transformation, as well as spearheading innovative processes such as connected manufacturing and predictive maintenance and service.
Strategic Priorities in a Digital Economy
In this situation, where the opportunity is huge but at the same time new market entrants are threatening traditional IM&C companies, it is essential to focus on the right strategic priorities to drive digitalization across the business
Putting the end customer’s point of view at the center of every decision is a key prerequisite for success in the digital age. This does not stop in the sales department but also applies to what products are built and what services are offered.
Serving the “segment of one”
Providing solutions that precisely fit the needs of one single customer has been commonplace in traditional engineer-to-order environments. Now, the ability to capture customer requirements effectively and drive mass customization is the key to giving customers exactly what they want.
Digital smart products
Differentiation and specificity in products stems from digital capabilities and value-added services that are bundled with the physical products. Using digital capabilities such as self-awareness of technical health and operational status or business system connectivity helps industrial manufacturers differentiate.
Digital supply chain and smart factory
Digital technology on the shop floor and in the supply chain is not new. What is new is the way production and logistics are intelligently connected to the rest of the business and are able to deal with external impulses such as short-term demand and supply fluctuations or changes in the configuration of a customer order that require different materials, parts, and machining operations.
Servitization and new business models
As traditional products are commoditized, IM&C companies are shifting from selling physical products to providing complete solutions. Generating more than 50% of revenue from services is a common goal for manufacturers who are looking for higher profit margins and increased customer intimacy. The “digital twin for business” is a key requirement, representing the physical product over the entire lifecycle, including changing data points during manufacturing and installation as well as operational performance issues, financial value created, and costs incurred up until the final phase of decommissioning.
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