2020 is set to be a monumental year in many ways – the start of a new decade, a contentious U.S. election season and more. And with 76 percent of U.S. voters interested in how presidential candidates will support and grow manufacturing, all eyes are on the industry that serves as a pillar for the global economy.
A new year always brings both challenges and opportunities. It also provides time to reflect on the big trends and events that helped lay the foundation for the months and years ahead. From new technology innovations to burgeoning trade wars, 2019 was an exciting — and sometimes hectic — year. Plus, the rise of the Internet of Things (IoT) and machine learning are paving the way for OEMs to design and build incredibly powerful and technology-enabled products.
As OEMs begin exploring new ways to positively influence both financial performance and the customer experience, we’ve compiled five of our favorite news articles from last year. These tips and strategies for success will help OEMs navigate technology innovations, ever-changing customer expectations and new business models.
1) Machine Learning and Predictive Analytics Are Reshaping Manufacturing
The manufacturing industry has reached a major tipping point, with OEMs moving toward product-as-a-service business models in which they sell access to their products and the outcomes of those products through subscriptions. Because OEMs will retain ownership over the products, they will also take on the responsibility of maintenance and repairs.
This DevOps article highlights the role machine learning and predictive analytics will play in the evolution toward delivering products as services. In particular, it focuses on how these technologies will help OEMs maximize product uptime and increase revenue as they take on these new business models.
For example, achieving this goal will depend in large part on strategically using machine learning and predictive analytics to facilitate efforts like predictive maintenance, process optimization and supply chain and inventory management.
2) Securing Our Infrastructure: 3 Steps OEMs Must Take in the IoT Age
As we head into the Industrial Internet of Things (IIoT), which connects major pieces of equipment, like aircrafts, and critical pieces of national infrastructure, like turbines, security becomes more critical than ever for OEMs.
This DarkReading article underscores the magnitude of the responsibility facing manufacturers of connected products and shares advice on how to enhance data security while ensuring full realization of the economic benefits of the IoT and IIoT.
The advice covers adopting industry-wide security standards, improving communication around and the sophistication of operations technology and increasing the focus on on-device security.
3) 4 Challenges OEMs Face When Implementing New Technology
With the move to Product-as-a-Service underway, there’s a lot manufacturers need to do now to prepare for this new operating model. Manufacturers must introduce new processes, resources and technology to support the transition.
As this DevOps article contends, implementing new technology, in particular, will be key to laying a foundation for success in both the short and long term. That’s because manufacturers must prepare to offer new services like predictive maintenance, process optimization and supply chain management, all of which require new technology to make possible. Additionally, implementing the right technology can offer a competitive edge.
Despite this importance, several challenges exist along the way, including maintaining efficient and secure data connectivity, beefing up traditionally sparse data, establishing domain expertise and adopting standards for data ownership. This article explores each of these challenges — and potential solutions — in detail.
4) Selling Mobility as a Service? How Will it Affect Automotive Repair?
Automotive maintenance and repair practices are poised to change tremendously over the next decade. Over the previous ten years, the gold standard became preventive maintenance — fixing a leak or changing fluid before a major failure could occur. But going forward, this model will shift to predictive maintenance, in which sensors send an alert when a component is near failure and requires fixing.
This shift is part of the broader push toward mobility-as-a-service, and it will have an enormous impact on the automotive market. According to this Search Auto Parts article, it will impact everything from the after-sales service market (e.g. by shifting the cost of maintenance from the owner/operator to OEMs) to purchase models (e.g. by offering the ability to rent cars from an entire fleet as part of a monthly subscription model).
This article explores exactly what this change will look like for automotive OEMs and the external forces driving these shifts in the market.
5) EVs Are Here: What Does it Mean for Auto Dealers’ Service Revenue?
Electric vehicles (EVs) have long been a topic of conversation, but they’re finally becoming a reality, with drivers adopting them faster than ever. Despite the environmental and economic benefits that these vehicles can offer, they will force some significant changes in the auto market. Most notably, they will likely only deliver to auto dealers two-thirds to three-quarters of the service-based revenue as traditional vehicles.
This Clean Fleet Report article outlines what the shift to EVs means for auto dealers’ service operations and resulting revenue, as well as how OEMs can help prepare dealers for this change.
The advice covers exploring opportunities to monetize service in new ways with evolving revenue models, introducing vehicle subscription services and balancing old and new service models simultaneously.
Get Ready for the Impact of These Trends to Take Hold in 2020
The trends outlined in these five articles made headlines in 2019, but we’ll really begin to see the impact of them in 2020. Is your organization prepared to make the necessary changes?
It all starts with understanding what these trends mean for the future state of the industry and their expected impact. From there, you can identify the best way to help your organization define goals and plot a path toward achieving them, for example by laying a foundation with the right technology.