Key things we learned from the Google Cloud Digital Manufacturer Summit

Profile picture for user ddpreez By Derek du Preez June 25, 2021 Audio mode
Summary:
Google Cloud and a variety of manufacturers have spoken about the digital trends occurring in the industry, as organizations respond to the COVID-19 pandemic.

Image of a grinder in a manufacturing plant
(Image by Michael Kauer from Pixabay )

Throughout this week diginomica has been tuning into the Google Cloud Digital Manufacturer Summit (accessible here), to get a deeper understanding of how organizations in the sector are responding to the COVID-19 pandemic through digital investments. 

A lot of ground has been covered and you can access all of the content from the Summit on diginomica's dedicated events hub. However, we thought it may be useful to pull together some of the key themes that we believe are front of mind for digital buyers in the manufacturing sector at the moment.

COVID-19 has changed things 

It's clear that COVID-19 has had a fundamental impact on the manufacturing sector, where there is now a clear appetite for change. Google Cloud research has found that 76% of organizations in the sector have adopted data analytics, cloud and AI during the pandemic, which is in stark contrast to more suppressed investment figures highlighted by Gartner last year. 

Manufacturers have become painfully aware of their supply chain risk during COVID-19 and need quicker insight into how their products are sourced and where they are at any point in time. In addition to this manufacturers are insourcing more of their operation and this is driving a renewed focus on automation to drive down costs as a result. 

And of course with social distancing measures in place and distributed work becoming the norm, automated production features are becoming more critical. All these market trends are driving a more open mindset amongst organizations in the sector, which realize that change is necessary. Dominik Wee, Google Cloud's Managing Director of Global Manufacturing, Industrial and Transportation, said: 

I think manufacturing is traditionally a very conservative industry. I think most manufacturers or plant floor managers will always trade off continuing the factory running, over doing innovation. Every change is a risk. The more disruptive these technologies are, the more hesitation there is - and for very good reasons. 

But I think what's happened through COVID-19, in many ways, is that it's taken some of this hesitation away and has also created a necessity to adopt. I think the pandemic has opened minds and I feel like there's a lot more openness to our technology than previously.

Use cases becoming clearer

The Summit also identified and outlined a number of use cases that are emerging in the sector - giving us a clearer understanding of how manufacturers are thinking about digital investments. 

At a top level, Google's research found that manufacturers, for example, are using data and AI to improve day-to-day operations for the following reasons: assistance with business continuity, helping make employees more efficient and to be helpful to employees overall. 

In terms of specific use cases, manufacturers are investing in: quality inspection, supply chain management, risk management, product and/or production line quality checks, as well as inventory management. 

However, what we learned from buyers was that they're investing in digital where it speaks to their brand experience. For example, Porsche explained how it is attempting to bring the same luxury physical experience that customers expect from its cars, into the digital sphere. Porsche CIO Mattias Ulbrich said: 

We are investing heavily in software competence and really developing software components that are serving the customer needs, as an ecosystem around the car.

Porsche stands for real customer experience - that means you can smell the leather, you can feel the exhilaration, you can see the design, you can hear the sound. And that is what we are taking right now to the digital world. This is very important for us, so we are investing heavily in the digital ecosystem. 

Technology alone is not a solution. It hasn't any real value. People are the value, people are using technology and bringing the best solution for the customer.

Equally, Jaguar Land Rover's approach to digital investments is to keep it simple. Whilst there are huge shifts occurring in the automotive industry - electrification of cars, the shared economy - Jaguar Land Rover is fully aware why its customers buy its cars. Director of Digital Excellence at the company, Harry Powell, said: 

The thing that our customers need from us more than anything else is quality. If they spend £100,000 on a Range Rover, they don't want to be sitting on the edge of the motorway. So linking our cars through the connected car, through this new world of real-time streaming data, how can we continuously improve the car? How can we continuously improve the software? So the very basis of the customer experience is being able to drive their car, being able to get where they want to get to, every time, all the time. 

Sometimes it sounds a little less exciting. But if you're the person that's stuck on the hard shoulder of the motorway, life is not about exciting at that point. It's about getting where you need to go.

It's all about continuous service

In addition to the above, probably the key message to come out of the whole Summit is how manufacturers are shifting to direct-to-consumer and continuous service offerings, using data and digital tools. Organizations in the sector used to build and ship and then move on to the next product, but are now thinking about how they can wrap services and support around their products to keep customers engaged throughout a product life cycle. 

For example, Powell from Jaguar Land Rover said: 

It's not enough to get people to buy your product once, you want to provide things that get them absolutely loving the way that they use your product. Providing them with the right kind of packs that they're going to use, that they're going to get really attached to, so that they want to buy it again next time. It's really important in the sustainability of your business.

In addition, Suchitra Bose, Director of Manufacturing Industry Solutions at Google Cloud, spoke about the need for connected products and building out a sophisticated 360 customer experience. She said: 

I would like to take a moment and focus on the intelligent connected products customer experience journey. If you're selling a coffee machine or a dishwasher, or a fridge, your relationship with your customer does not end after selling the product. The customers are expecting that you will provide software updates. [They want you to] understand the usage pattern and recommend a maintenance service, or send a consumable, as and when required. The shift from the product to as-a-service, an outcomes based model, allows you to deliver personalized and predictive experiences.

Understanding your customer behaviour also allows you increased revenue opportunities.

My take

It has been a very informative week hearing from buyers in the manufacturing industry and from Google Cloud about the disruption facing organizations in the sector. It's clear that a traditionally conservative industry is going through change - and none of this will be easy. Technology, as always, is just one piece of the puzzle. Shifting to service-orientated outcomes and continuous customer success requires cultural change, new processes and new teams. But those that get it right will likely end up with recurring revenue streams and customers for extended periods beyond what they are typically used to. Certainly an industry to watch over the coming months and years.