Digabit’s CEO recently shared with the company a market research report from Cisco, The Digital Manufacturer: Resolving the Service Dilemma. The central theme of the report is that manufacturers have traditionally been focused on products as their core business, but that to maintain or achieve growth these firms must transition to place more emphasis on service-based revenues.
Why is that? As product design and engineering have become more sophisticated, reverse engineering to replicate products has evolved as well. That means manufactured products are becoming less differentiated, and more commoditized. Why purchase a Caterpillar loader if you can buy another machine with similar specs, and many of the same sub-components, for 20% lower cost? In the past, brand reputation may have provided an answer to that question, but today’s B2B consumer is increasingly brand-agnostic.
Today, the answer to what machine to buy may depend more on the strength of a manufacturer’s after-sale service and support. Caterpillar offers a wide spectrum of service plans and products to keep customers’ assets in top operating condition. So, they can potentially pitch a lower total cost of ownership (TCO) over the 10-20 years of service life of a typical heavy machine. We have seen at least one heavy equipment manufacturer shift their emphasis from selling machines to “selling” uptime.
It’s all well and good to point to improved services as the path to greater profits, but in reality the expansion of service offerings generally leads to increased complexity and costs. According to Cisco, the solution to this dilemma is to digitally transform the organization, from R&D to supply chain to CRM.
Interestingly, when manufacturers were asked which digital technologies would have the most impact on production over the next three years, the top three picks were cloud technologies, IoT/M2M, and data analytics. The interesting part is that robotics and 3D printing did not make the cut, and that companies are most focused on optimizing data analysis and connectivity.
How does Digabit’s Documoto platform fit into the digitization of manufacturing and service delivery? Machines are constructed from parts and assemblies. These components start their lives as digital data in a CAD design application, but once they go into production much of the associated product metadata is stripped away. Documoto retains the relevant digital part information and stores it in a structured database format.
So, if a forward-looking manufacturer wanted to connect a specific set of parts to a new predictive maintenance application involving machine-to-machine communication, they could develop an integration with the data in Documoto to identify the part, check inventories, and even order the needed items after analysis. One of Digabit’s existing customers has already built a diagnostic tool with similar functionality.
Go check out Cisco’s report, and then think about how digitizing parts data might fit into your long-term digital strategy.