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7/31/2018 PTCVoice: The Forces That Are Transforming How Products Are Made

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Oct 21, 2013, 12:51pm • 9,173 views

The Forces That Are Transforming How Products Are Made

Beth Ambruch Brand Contributor PTC BRANDVOICE

Things are looking up for the Big Three auto

makers. Ford, General Motors , and

Chrysler all posted a significant uptick in July

sales. But the old-style factories of the Detroit

golden era have long since gone, and they’re

not coming back, at least according to a

recent article in The Washington Times.

Whether we like it or not, globalization has

been a major factor in the staying power of the

auto industry and other major manufactures.

The practice of scattering production, jobs and

plants across the globe has delivered great

benefits to the consumer and the

manufacturer. Companies have been able to

squeeze as much efficiency as possible from the products they make so that what

we desire is affordable and readily available. This has been the definition of

success for many decades.

Yet with the growing costs and challenges associated with the global market, many

manufacturers are looking for new sources of competitive advantage.

Global industry is in the midst of a fundamental transformation – having to

rethink everything from how products are conceived, designed and sourced to how

they are produced, sold and serviced. In fact, according to a recent study done by

Oxford Economics, a global forecasting and quantitative analysis firm, 68 percent

GM +0.64%

7/31/2018 PTCVoice: The Forces That Are Transforming How Products Are Made

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of 300 manufacturers surveyed expect to undergo major business transformation

in the next three years.

What is this force driving change? To be certain, it’s not just one, but a confluence

of factors changing the manufacturing landscape. Digitization, personalization,

“smart” products, connectivity, and servitization are some key drivers, and

globalization and regulation continue to drive manufacturing businesses, but in

new ways.

Smart Products & Connectivity. By 2020 more than 50 billion devices

are expected to be connected to a global network. In this new era of

connectivity, every day physical objects will be able to identify themselves

and communicate directly with other devices. This one single ability leads

directly to a new level of customer service, termed “servitization”.

Servitization. Again from Oxford Economics, more than two-thirds of

manufacturers expect to use service as a differentiator by 2015, with more

than half of them planning to establish a service profit center, and 77

percent indicating that improving services is a key factor for

competitiveness. In this new era, manufacturers need to look beyond the

single product sale transaction into a new relationship between themselves

and the consumer—characterized by an ongoing delivery of value—

exchanged over a platform in the form of a smart, connected product.

Digitization. To better meet fragmenting customer demand,

manufacturers are harnessing digital technologies that help them improve

global collaboration and expand regional manufacturing processes into

globalized design-build-service anywhere strategies. Digital technologies

also enable manufacturers to simulate and validate many product

configurations before they are built.

Personalization. As consumer demand continues to evolve,

manufacturers are being pressured to respond with increasing customer

choice. But product diversity can increase cost, and potential decrease

quality. According to the Oxford Economics report, over two-thirds of

7/31/2018 PTCVoice: The Forces That Are Transforming How Products Are Made

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manufacturing executives will apply Voice of Customer to better

understand their customers, and to make certain quality does not suffer.

Globalization. The global market continues to expand, and it’s not just

about where we manufacture and source materials anymore. Manufactures

must be able to design, build, service, and sell to and from anywhere.

Regulation. With globalization comes responsibility. Manufacturers must

stay ahead of the always changing regulatory requirements and of local

customs related to health, safety, trade and the environment. Sixty-three

percent of C-level executives say global product compliance will be the most

developed to coordinate strategy and planning.

The goal for every manufacturer should not only be to “make better things”—

creating products and services that meet customer needs, but also to “make things

better,” facilitating the engineering, service planning and execution, management

and production processes through which innovation can evolve from conception to

retirement, and creating a closed feedback loop to ensure continual improvement

and alignment across the business.

For many manufacturers this is a succeed or fail moment, they can choose to get

ahead of the change by seizing the opportunities presented by tomorrow’s world or

get run over by newcomers trying to disrupt the market by adapting their

strategies accordingly.

While The Washington Times article was right in the sense that traditional large-

scale manufacturing is unlikely to return to Detroit. The Big Three have numerous

opportunities to take advantage of these forces to create a stronger, more

interesting opportunity. And perhaps, with this manufacturing transformation,

will come a new era powerful enough to bring fresh jobs and opportunities back to

the United States.

This article originally appeared on PTC Product Lifecycle Stories

7/31/2018 PTCVoice: The Forces That Are Transforming How Products Are Made

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Beth Ambruch Brand Contributor Follow

Avowed learner of new world-changing technology. I unwind by cooking, traveling and playing

with the family. I live in Minneapolis, MN and work in Corporate Communications at PTC.