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May 29, 2020 | 3 Mins Read

COVID-19 is Turning Manufacturing on its Head. Is Service the Key to Success?

May 29, 2020 | 3 Mins Read

COVID-19 is Turning Manufacturing on its Head. Is Service the Key to Success?


By Tom Paquin

I recently had the pleasure of reading Anna-Katrina Shedletsky’s Forbes column on the impacts of COVID-19 on the manufacturing industry. It postulates (as the title makes clear) that manufacturers will experience 5 years of innovation over the course of the next year and a half. I’m not necessarily in a position to make any assertions about the 18-month to 5-year mathematical conversion, but there’s no avoiding the fact that necessity is driving an avalanche of new technologies into manufacturing, for better or for worse.

Do I have concerns? Absolutely. Chief among them are the perils of reckless tech adoption, a topic worth much more elaboration than my article from earlier this year delves into. Nevertheless, these changes are happening now, exacerbated by a gradual return to work and the establishment of a new normal at that work, and businesses will be forced to reckon with, justify, and build upon those changes to enrich their business in ways that make knee-jerk software investments seem worthwhile.

In her article, Shedletsky earmarked two specific and interconnected areas of exponential growth for manufacturers today, specifically cloud data adoption and automation, and though she is primarily focused on straight manufacturing, it is impossible not to consider these through the lens of service as well. To that end, she says in the article,

“Adoption of cloud data unlocks technologies like AI, which can be used to surface unanticipated defects during development and catch quality shifts in production without stepping foot in the factory.”

We’re not shy about the importance of cloud around here, but let’s unpack this a bit for its importance within the specific context of manufacturing. As we know, manufacturers are moving towards servitization—building business plans around service delivery rather than straight product delivery, given its much better margins and customer retention capabilities. Companies moving to, or already with service in place, are shifting service delivery from break-fix plans to more outcomes-oriented service delivery as well.

This is where cloud-oriented datasystems like the one in the article could really shine. Shedletsky rightly identifies cloud oversight as being able to help identify and mitigate production irregularities and output lags. For service-oriented companies, access to that data would offer a metric to be used for outcomes-based service. Without cloud oversight into your assets, you’re limited to promising outcomes such as time from ticket to invoice, first-time fix rate, and other repair-oriented KPIs. With greater asset oversight, you can expand those outcomes into predictive maintenance, output, and performance. This is a capability unique to manufacturing’s complex assets, and it’s a huge opportunity for forward-minded companies.

We often talk here about how you can’t engage in new service software effectively unless you have the underlying infrastructure, which has traditionally been disruptive for businesses to take on in advance. Within the context of COVID-19, the disruption from external sources are propelling huge amounts of change that can, and should be leveraged for service purposes in order to expand their usefulness. It’s a damaging crisis, undoubtedly, but it’s also a unique opportunity to use these new changes to restructure businesses, diversify revenue, and deliver more value to customers.

None of us want to the in the position we currently find ourselves in. But from that position, we are rewarded with new options and avenues for success.