Manufacturing enterprises have stolen the digital transformation spotlight by switching to tech and re-navigating processes.
Rajagopalan V, Business Head and Kaarthik S, DU Head – Manufacturing at Feedback Insights recount some insights from their experience.
The manufacturing industry has started to think digital. Supply chain challenges, changing customer expectations, and the pandemic necessitated it. We see a change in the industry’s perception on incorporating technology, digitization and customer centricity. Many more trends are being unfolded. Our interaction with manufacturing customers and stakeholders opened us to these changes and some challenges manufacturing faces today.
A Modern-day Evolution Story
The modern-day manufacturing organization focuses on humanizing customer relationships. The change in expectations from customers has led to the emergence of Customer Relationships as a new trend in manufacturing. This is a drastic shift from the Product + Cost + Delivery focus, that manufacturers had when engaging with customers. As customers begin to look for more engagement, manufacturers are focusing on building softskills within their workforce to meet these new expectations
Changing expectations has led to the following trends –
> Winning Customers with Relationships
Customers not only buy a product, but also engages with the manufacturer as a partner. They now expect the manufacturer to respond to their queries, resolve issues and support them in the overall business context. The ideal interface they are looking for is technical competence married to an understanding of their specific needs, and resolution in a timely manner. For key customers, the manufacturing organization has invested in a relationship layer, that has begun to play this role effectively.
A customer traverses several touch points through the engagement right from R&D (for custom products), to sales, procurement and dealers. All of these teams need to have the relationship perspective beyond the transactional when dealing with the customer.
> Being Digital Savvy with Tools and technology
Digital transformation which was initiated at a slow pace is seeing itself transform into a juggernaut. More than 65% organizations deem digital transformation of people, process and product critical for the business. Technology and innovation is the pathway to product improvisation, which is a key expectation from customers in mature markets. Technology plays an important role that impacts service and delivery optimizations.
> Simplifying Service Support and Demand Supply
Manufacturers are in the midst of a makeover that has made them don the ‘Servicing hat’. Several best practices have been adopted from Service industries. Processes have been redesigned, technicians / engineers upskilled with soft skills in a bid to elevate the service support experience. Delivery, Planning and Order Execution have been supported by strong back-end applications to help in planning and provide the required transparency to the customer.
Slow Pace of Digitization and Investment: Growth Hurdles
While we proudly applaud the digitization efforts in manufacturing, the slow change of technology adoption is still a challenge in the industry. While it is critical to strategy, implementation is bogged down by low intent to action, skills and funds.
80% of medium enterprises we have interacted with, have no plans to invest in IoT or any similar technologies in the coming years. The first movers are clearly the bigger organizations with deep pockets or the Indian arm of Multi National OEMs. The need to adopt digitalization, however, is a foregone conclusion.
Key Challenges ahead for the Indian Manufacturing Industry
- Lack of focus and development of indigenous technology or IPs in manufacturing has led to technology imports through JV’s. This necessitates a dependance on the original OEM for transfer of key skills.
- The current channels, especially the older and well established ones, struggle with succession planning. The current generation does not find continuing as a channel to be an exciting way of business; they are in search of fancier titles and professions. Succession planning issues are reflected in proprietary mid size suppliers as well, which could result in a reduced number of supply chain enterprises for manufacturers.
- While attrition is low, and employee engagement is relatively better in comparison to the service industry, there is an inability to attract the best talent into this sector.
Conclusion: What’s Ahead for the Indian Manufacturers?
The biggest change that is here to stay is the transformation of manufacturing into ‘manufacturing and services’, as dictated by their customers. This would have to be supported through digital transformation, which is moving slower compared to their global counterparts.
SMEs could adopt digitalization more aggressively. They could leverage the digital transformation learnings from the first movers, before embarking on this journey.
Value creation through indigenous technology continues to be a challenge for Indian manufacturers. The Government would need to step in to provide a more conducive eco-system to help change status quo.
The stable and engaged employee system will have to be motivated and leveraged to make this happen.
Depending on how you look at it, the glass is either half empty or half full. The Indian manufacturing sector is gearing for change to make digital transformation a reality across all sectors, and fill in the other half.
