In a previous post, Manufacturing of the Future: 3 Keys to Success, I wrote about how manufacturing executives believe that optimizing operations has become the industry’s price of entry rather than a source of differentiation.
Based on the same Oxford Economics survey data, PTC has developed a business-impact model to estimate how changing priorities might affect revenue and costs. To gauge the performance of individual firms, we asked respondents about their current prioritization of strategy and planning, service, and manufacturing operations.
For firms that place limited priority on all three areas, manufacturing operations yields the biggest impacts in terms of revenue and costs. As companies increase prioritization however, our analysis shows that focusing on strategy, planning and service offers greater opportunities for revenue and cost savings than focusing on manufacturing operations.
Given that, how should manufacturers shape their transformation priorities going forward?
Step 1. The research suggests that manufacturers must start by grasping the market trends expected to have the greatest impact over the next three years and then map those findings to how they currently align strategy and planning. Do you have a clear idea which market trends are likely to have the greatest impact on your organization over the next three years?
Step 2. Manufacturers should analyze how they coordinate strategy and planning activities across their organizations. Do you know how well strategy and planning is coordinated within and across business functions (e.g., engineering, supply chain) to respond proactively to market trends?
Step 3. Next, service cannot be viewed simply as a way to enhance the value of present products, but as a distinct value proposition and revenue generator. Are you maximizing your use of remote diagnostics and other forms of direct feedback to improve the customer experience with your products and services?
Step 4. Finally, manufacturers must approach innovation as an enterprise-wide effort. Leading manufacturers are sourcing innovative solutions from emerging markets and bringing them to developed ones. Do your innovation efforts extend beyond traditional R&D to encompass all parts of the enterprise ecosystem?