3 Tips for Navigating Disruption in Manufacturing

Disruptive forces constantly create new markets and eventually displace even the most well-established companies in any industry. In the next five years, the industrial sectors will see more disruption than in the past 20 years. However, steps can be taken to prepare for disruptive events – and serve to position a business to disrupt the market themselves.

Companies can think of disruption as having two sides, or two edges of the sword: threat and opportunity.

ABI Research’s whitepaper, Wielding the Double Edge Sword of Disruption, recognizes three technologies that stand out in the age of disruption: Augmented Reality (AR), the Industrial Internet of Things (IIoT), and Software-as-a-Service (SaaS). Why these three? These technologies improve your organization’s adaptability, resilience to disruption, and enable more opportunities to be a disruptor.

Let’s take a closer look.

1. Empower Employees with Augmented Reality

A near universal type of disruption is the growing skills gap, caused by a retiring workforce and a lack of the effective capture of domain knowledge to be transferred to new recruits. This gap is anticipated to create a job shortage of 2.5 million manufacturing positions over the next decade, creating a major and ongoing disruptive force to industrial enterprises.

Employees are a manufacturer’s greatest assets. Finding ways to empower them through better training methods and effective work processes is one way to stay ahead of disruption. Augmented reality is one technology to consider; with it, manufacturers can capture tacit domain knowledge efficiently in real time, without interrupting normal operations and with low upfront user requirements.

Capabilities of AR for knowledge capture also extend to knowledge sharing through remote assistance. Instant access to experts reduces costs of getting them on-site and reduces time to response for unexpected situations. Remote expertise will continue to be the largest AR use case by number of users given its role in supporting a global workforce during COVID-19. The Volvo Group uses AR to reduce training time -- from five weeks to less than two weeks. As one of the world’s foremost manufacturers of trucks, buses, construction equipment, AR enables Volvo to be more agile in response to shifting market and customer demands.

Combined, AR worker enablement solutions can collect, digitize, and distribute knowledge in a flexible and scalable way.

2. Leverage Smart Connected Products (SCP) Facilitated by IIoT

SCP are transforming industry structure, impacting competition and profitability by dramatically expanding opportunities for product and service differentiation.

Customer demands that increase product complexity push companies to think strategically about how value is created, captured, and delivered. Knowing how customers actually use the products enhances a company’s ability to segment customers, customize products, and set prices to better capture value. SCP can shift rivalries, creating an opportunity to broaden the value proposition beyond products to include valuable data and enhanced service offerings.

Delivering SCP capabilities first to customers allows manufacturers to capture data to integrate closely with the customer. This enables incumbents that embrace SCP to better protect their market share against both established rivals and new entrants like “digitally native startups”. SCP can offer superior performance, customization, and customer value compared to traditional substitute products, reducing substitution threats and improving industry growth and profitability.

Caterpillar, a manufacturer of heavy equipment used in construction, extractive, and agricultural industries, uses SCP for their customer, De Beers’ mining operations. Caterpillar’s gas turbine engines that power De Beers’ mining operations monitor data to detect issues that cause low operational performance or power failure. Identifying areas for production innovation will improve Caterpillar’s current line of turbines and build the next generation of smart products.

3. Enable Stronger Collaboration with SaaS

As COVID-19 forced work off-site, the business processes that relied on on-premises software and in-person collaboration proved to be a challenge for distributed teams. As more companies are adopting work from home, even post-COVID, remote work will be far more common. Along with their many benefits, SaaS solutions particularly shine at enabling distributed collaboration.

SaaS is commonplace in software applications for other industries like Cloud Computing (think Salesforce) and Tech and Entertainment (like Netflix), but is only now becoming available for product development software. SaaS for product development allows teams to collaborate on projects in real-time, with awareness of working on the latest version of a document or design. This seamless collaboration results in a better way for teams across an organization to share knowledge and innovate faster.

Garrett Advancing Motion technologies are used by almost every global automaker, with over 100 million vehicles on the road today using its products. Through its work with PTC’s SaaS-based CAD software, Onshape, Garrett Motion streamlined operations across internal teams and externally. This made them capable of completing an order of 1,900 high-tech turbochargers to outfit ambulances during the height of the pandemic within four days. 

Final Thoughts

To overcome disruptive forces, companies need to examine all the potential levers to stay ahead. In particular, digital solutions. Three technologies stand out for navigating disruption: bi-directional data sharing for employees is enabled using AR, SCP expand opportunities for differentiation using IIoT, and collaboration across the factory is more efficient through a connected SaaS ecosystem.

Industrial enterprises can be on the winning side of disruption by utilizing these new technologies that simultaneously fend off and enable disruption. Read more about how industrial enterprises can accept and integrate these new ways of working to survive – and thrive – well into the future.