Digital Technologies Are Reshaping the Manufacturing Landscape

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ICT Monitor Worldwide

August 8, 2018

For engineers, new skills are needed in a world of smart products. A new survey finds that to capitalize on new service-driven opportunities, manufacturers will need to improve their digital capabilities.

The new survey comes from Capgemini, the French multinational professional services and business consulting corporation. The report focuses on the engineering and construction sectors, and it is titled: “Digital Engineering: The new growth engine for discrete manufacturing.” The data analyzed in the survey is based on the forward plans of over 1,000 engineering companies worldwide.

Discussing the survey with ZDNet, Nigel Thomas, Head of Aerospace and Defense, at Capgemini, states that although many engineering companies have been experimenting with digital technology, digital transformation represents something new: “The difference is that digital is now connecting the different parts of an enterprise so that you get the ability to make decisions at a business level based on an enabled, end-to-end, front-to-back, top-to-bottom strategy.”

Go smart

The survey touches on many themes. One of the important areas touched upon is how engineering firms are investing in new smart products to capitalize on the servitization opportunity (that is, deriving revenues from services).

Expanding smart technology market

The survey finds that the size of the smart, connected products market globally will grow from $519 billion to $685 billion by 2020. Furthermore, many manufacturers think that up to 50% of their products will be smart and connected by 2020. This represents a rise of 35% based on a previous survey conducted in 2014.

A driver for this is cost savings, which is leading to many engineering firms investing in smart, connected products in what represents a move away from transactional product sales (a sales strategy that involves focusing on achieving quick sales without a significant attempt to form a long-term customer relationship) to services and product-as-a-service models.

Data gathering

Data analysis provides ways to improve businesses and the means to find new markets. Connected technology can generate a rich stream of data. Engineering companies are beginning to take usage data (from smart, connected product) and customer feedback (from social/professional network), to drive the innovation of new products and services. This provides an alternative to traditional marketing and sampling surveys.

Example in action: autonomous cars

As an example of how smart technology has led to a change in direction, the survey draws on the example of Autoliv, a Swedish auto safety system manufacturer. The company spun off its electronics business division to establish a new company dedicated to connected and autonomous cars. The new company is working on safety electronics, sensors, and software for active safety, advanced driver assistance systems, autonomous driving systems, and advanced brake control solutions.

The survey places smart and connected technologies as one of the key markers on the digital transformation road-map for engineering. To succeed, smart, connected products need to have the right balance of capabilities and an appropriate business culture, as well as the supporting technology.

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