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Digitally Transforming Manufacturing Only Excels When Customers Win

Rising customer expectations for greater convenience, collaboration, and customization are driving the digital transformation of every area of manufacturing today.

Manufacturers growing the fastest today approach digital transformation entirely differently than their slower-growing peers. A recent survey of 250 North American manufacturers by Configit found the following:

  • Manufacturers growing 10% a year or more excel at orchestrating PLM, CAD, ERP, and CRM, digitally transforming how products are defined, built, sold and serviced.
  • High growth manufacturers concentrate on how they can reduce time-to-market and achieve perfect order performance by integrating systems that accelerate new product development and improve on-time delivery rates.
  • On average, manufacturers growing 10% a year or more have four or more systems integrated, while those growing 10% a year or less only integrate with 1 or 2 systems at the most.
  • Realize that making quality management, compliance and customer feedback the core of digital transformation efforts is essential if they are going to stay on track and keep accomplishing challenging growth goals.    
  • Have an aggressive API strategy that concentrates on how to streamline ERP, PLM, CAD and CRM systems with enough agility to flex to customers’ changing needs.  
  • Manufacturers growing 10%, or more a year succeed at integrating PLM, CAD, ERP, and CRM to create a Configuration Lifecycle Management (CLM) platform. Their CLM platforms enable them to take a model-based approach to product innovation, giving customers greater convenience, collaboration, and control over their build-to-order products.

Digital Transformation Needs A Purpose To Succeed

High-growth manufacturers are very selective about the metrics and key performance indicators (KPIs) they choose. They’re very focused on how to strengthen their companies with a customer-centric view of product customization and quality.

One CEO of a Midwestern U.S. manufacturer during a follow-up interview told me that “the analytics, metrics, and KPIs we use to measure ourselves change who we are quickly as we’re moving fast to reinvent yourselves and stay relevant to customers.” He said that they’ve narrowed down the dozens of metrics on their dashboard only to those that quantify product quality delivered to customers, delivery times, and customer satisfaction.

“Our customized products’ quality is the best marketing we have and brings us into deals we’d have never found otherwise,” the CEO continued. “And our teams only evaluate new technologies and adopt them when the customer wins first – that’s the overriding purpose in every IT investment we’re making.” The CEO and his peers who are growing 10% a year or faster all agree that any decision to digitally transform any area of their operations must deliver overwhelming value to customers to even be considered.

Digitally Transforming Manufacturing Delivers Faster Growth

High growth manufacturers have an acuity, and exceptional ability to listen and empathize with customers’ problems and goals that their slower-growth competitors don’t. Their ability to orchestrate digitally transformative technologies to strengthen and fine-tune their empathy and listening skills is impressive. One of the survey goals was to determine how fast-growing manufacturers adopt and integrate analytics and Business Intelligence (BI), mobility, quality, and real-time monitoring. The results reflect how adept high-growth manufacturers are at digitally transforming themselves to be even more empathetic and capable of exceeding customer expectations:

80% of manufacturers say mobile access to CPQ improves quote accuracy and 75% say having real-time integrated mobile access enables them to complete quotes faster. The high growth manufacturing cohort also said that mobile access across their distribution and manufacturing networks increases quality and compliance by over 50%. The CEO of a medical products manufacturer says that the more accurate and frequent the collaboration with customers, the more accurate orders are. Building up perfect order performance using real-time collaboration also streamlines audits, he said, leading to more on-time deliveries.

  • 52% of manufacturers are investing in greater factory automation and control to improve on-time order delivery performance and increase time-to-market. CEOs leading manufacturers growing 10% or more a year are also concentrating on upgrading legacy PLM and CAD systems to more responsive, real-time digital platforms. High growth manufacturers outdistance their peers on the levels of investment they are making revamping PLM and CAD platforms by 2X or more.  The Chief Operating Officer (COO) of an automotive supplier to Ford, GM, Toyota, and other leading vehicle manufacturers is seeing a cascade effect across their operations based on digital transformations’ contributions. When quality improves, on-time delivery improvements follow, which in turn leads to customers buying more. “We’re planning to revamp our digital platforms starting with quality management and integration to PLM so engineering can see where products are succeeding and failing fast,” the COO said. “Quality is one of our strongest sales drivers, so much so that we’re going to upgrade demand planning & forecasting, and inventory planning and forecasting.”  The following graphic illustrates manufacturers’ adoption and investment plans in the areas of PLM, SCM, and ERP for 2019.

Conclusion

Having a compelling, customer-driven purpose is the secret to excelling at any digital transformation strategy today.

The fastest growing manufacturers can successfully orchestrate a broad base of technologies to increase their ability to empathize, listen, anticipate and respond to customers’ needs. And these high-growth manufacturers all exemplify how taking a model-based approach to new product development based on a solid, secure and scalable CLM platform that can flex and grow with them as customer needs change. With every system, a manufacturer relies on daily to deliver products having a different data structure, cadence, and lexicon, the need for a single, unified platform to guide product customization and growth has never been greater. CLM is the foundation manufacturers need to scale and deliver customized, configurable smart products to customers today and in the future.