Service - not robots - is central to the re-shaping of the manufacturing industry
Apple supplier Foxconn last month revealed it has replaced 60,000 factory workers in one of its plants near Shanghai in China with robots. While the manufacturing sector is no stranger to robotics and automation replacing humans (you only have to look back to Fiat’s 1979 prophecy Hand Built by Robots to realise that), Foxconn’s move is definitely dramatic.
The sheer scale of change in just one factory will have sent reverberations across the globe. Certainly the sector, like many sectors, is going through a rapid adoption of new technology as well as coping with increased globalisation, but the biggest impact is not necessarily from robotics. Rather it is in how organisations are re-shaping and re-focussing on data.
The Internet of Things (IoT) is essentially triggering this change and what this data - collected from machinery, products and factories and fed back into analytics software to be reviewed by specialists - is doing, is forming the back bone of manufacturer decision making. It’s a digital revolution that is enabling more informed design, processes and innovation, but only if it has context.
In a manufacturing context, digital goes through the whole piece, from the design concept, to actually modelling the manufacturing process before you’ve even cut metal. And then through to manufacturing environments and collecting performance data, which is all about understanding manufacturing capacity.
What is often overlooked is that digital is in fact driving which products and services manufacturers actually deploy. While he accepted that servitisation is increasingly central, and that a lot of companies are “extracting a lot of value out of delivering a service rather than a product,” the fact is that service should now be integrated within a business and not be viewed as a bolt-on, a nice to have. It should provide the intelligence which shapes and determines the future of manufacturing.
And this is the point. Technology is enabling manufacturers to differentiate through service and even make money. No longer a cost centre but a profit centre, with the ability to upsell, as well as feedback vital customer information, service is now increasingly the vehicle for customer and product intelligence. It puts data into context.
Of course the role of the field service tech is changing too. It has to. As the importance of service grows, so the field service techs have to evolve with it, and develop new skills. That means working with more functionality on their tablets, phones and even their clothes, as well as handling data collection, reporting and keeping customers happy.
Interestingly, according to the 2016 KPMG Global Manufacturing Output report, 49% of global manufacturing executives plan to significantly change the range of services they offer in the next two years, while 45% are concerned about the relevance of products and services they offer. With 44% concerned about customer loyalty, it’s easy to see how service techs can play an increasingly essential role within the manufacturing sector. Data, and the intelligence surrounding that data, are the lifeblood for innovation and growth.
Joe Kenny is Vice President of Global Customer Transformation/Customer Success for field service management leader, ServiceMax.
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IMF: Variants Can Still Hurt Manufacturing Recovery
After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022.
Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery.
Lingering Concerns Over COVID
Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high.
Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery?
IMF: Current Boom Could Falter
Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”.
Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”.
Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.