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Six digital initiatives manufacturers must follow in 2016

Software AG | Feb. 3, 2016
Software AG shares the key initiatives that manufacturers need to adopt to be successful this year.

This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.

2016 will be a year fraught with opportunity and uncertainty. The only certainty is that manufacturers will seek to become more flexible and more agile in their business practices, value chains and customer offerings. This is because their customers and the markets they serve are changing, and the way business is conducted around the world is transforming at a never-before-seen pace.

Based on our expertise, market observations and interactions with its customers, we predict that manufacturers will need to adopt the following six key initiatives to be successful this year. 

1. Digital Transformations will drive Growth and Profit

Manufacturers will adopt technologies in the coming year that will allow them to transform their operating models and digitally connect processes, events, actions, internal associates and external partners. This will enable manufacturers to develop global standards that are flexible to accommodate regional, customer or product requirements.

Additionally, information about product usage, production capabilities, customer requirements and market requirements will be ingested, analyzed and shared faster than ever before. Becoming a digital enterprise ensures the productiveness of associates is not only fully utilised but that their knowledge is spread across the enterprise. This will be central to manufacturing strategy and will be the lynch pin for all major initiatives as the success of this adoption will be directly measured by the impact on the bottom line.

2. Obsessive customer focus pushes innovation
Understanding customer requirements and innovating based on known and unknown wants will begin shaping manufacturing value chains. This will spur manufacturers to adopt capabilities, such as mass customization, faster than expected in order to provide differentiated products to business and consumer customers. This customer focus shift will be coupled with the increase of demand-driven micro logistics networks that push finish good closer to the customer and are able to nimbly respond to customer demand.

3. The Internet of Things (IoT) fuels new revenue
IoT will drive a shift in business models that price based on availability rather than goods or services. In 2016, manufacturers will begin focusing on providing pricing models for equipment and products based on controllable outcomes. This will be most prevalent in several selected industries, such as industrial equipment, power generation and HVAC providers. These pricing models will exactly match customer requirements to compensate for static growth and hard fought margins. As an example, industrial equipment manufacturers will provide pricing based on yield, quality availability and uptime as they will be able to monitor equipment performance and dynamically predict remaining useful life of equipment and components to ensure assets are effectively maintained and utilized without failures or unplanned maintenance interruptions.


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