The digital age has unleashed profound changes that are impacting the ability of industrial equipment (IE) manufacturers to grow in an IE market in transition. But, despite these challenges, such as keeping up with hyper-demand for personalized products, leading companies are prevailing by using approaches peers may want to consider.
For example, in addition to scrambling to keep pace with customers’ desire for connected products and experiences, IE companies are grappling with the growing imperative for higher productivity by way of targeted investments in growth levers—such as industrial robotics.
Moreover, the constant introduction of these new technologies is blurring industry boundaries as part of the trend of ever-more digital disruption, while the push to “go green” is growing. Rounding out these forces, it is crucial to work with, not against start-ups, competitors, and customers to create viable business ecosystems, and to comply with new regulations, such as digital trade compliance.
Accenture has identified a small group of innovative IE companies that are stepping up to the challenge and distinguishing themselves in this disruptive era. Described as “industrial equipment champions,” they recognize the need to build for tomorrow without jeopardizing what is working today. And perhaps most important, understanding how to make the right investment choices across valuable, older core business and new opportunities.
IE Champions are succeeding despite IE landscape obstacles by employing three distinct mindsets. These include:
1. Understanding the value of investment: For instance, these leaders view innovation and the associated cost differently, spending more time and money than many to design and build differentiated products that have become critical to success in a digitally driven IE marketplace. Champions also understand the value generated by combining conventional hardware with new software to create smart, intelligent equipment and services.
The paving equipment of one major customer, for example, is now fitted with multiple computers and a host of sensors, telematics, and other technologies, providing granular insights into predictive maintenance data, fuel burn rates, and health and operational safety that has significantly heightened performance.
2. Focusing on tangible, timely returns: IE champions make sure that digital investments made toward improving design, engineering, and production achieve viable returns. Our study shows, for example, they increased design win rates—the ratio of designs successfully scaled into full production to the overall designs created—by 7% between 2016 and 2018. In comparison, others experienced a decline of 0.1% in this critical metric.
3. Using growth levers in new ways: IE champions leverage investments to enhance productivity and agility by identifying five levers that organizations use to scale digital innovation. These include skills, platforms, technology, partnerships, and leadership. Take partnerships, for instance, champions engage with peers to boost complementary competencies. Two leading global players in industrial automation and robotics, for instance, share knowledge and jointly promote collaborative automation, including collaborative robots and dual-arm collaborative robots.
In addition, IE champions partner with technology companies to extend collaborations beyond typical engagements such as information technology hardware supply, enterprise resource planning software implementation, or tech support. A large heavy industrial company joined forces with a major software corporation to leverage the latter’s digital innovation system to improve equipment design. This reduced power generation breakdowns and enhanced plant efficiencies.
Digital technology is creating discerning customers who want connected products and experiences that don’t pollute, save time, and are easy to use. This demand is further influenced by trends that are re-shaping the IE marketplace and likely will not abate, but rather accelerate.
IE champions understand this challenge and are meeting it head-on by leveraging digital technology to satisfy personalized demand; striving to optimize returns on digital investments; and identifying growth levers to scale digital innovation. IE peers should take note of their efforts and prepare now for tomorrow’s IE market.
>>Brian R. May, email@example.com, is managing director, Industrial North America, Accenture, and Jean Cabanes, firstname.lastname@example.org, is senior managing director, Global Industrial Lead, Accenture.