Written by Joe Birkedale, Managing Director, Catalyst
As we accelerate further into this digital age, opportunities to reach and build trust with our customers is becoming more and more accessible, even for global entities with large and complex supply chains.
The manufacturing industry is entering a digital revolution; Industry 4.0. Traditional production methods are now in the shadows of a digital transformation. But we’re not simply talking about adopting automation technologies to make value chains more efficient; this has been done since the ‘70s. Industry 4.0 is seeing industrial companies becoming entire digital enterprises; utilising big data, reducing costs on product development and placing massive emphasis on customer integration.
China has outflanked its competitors once again by ranking number one in Deloitte’s Global Manufacturing Competitiveness Index 2016. Whilst traditionally seen as a low cost, high production nation, it’s now leaning towards the higher value products model, which executives imply could see their competitiveness decline as they go up against the already advanced nations of Germany, Japan, the UK and US.
However, Asia is still dominating the rankings list. In 2016 we saw the rise of the ‘Mighty Five’: The five Asia-Pacific nations of Malaysia, India, Thailand, Indonesia, and Vietnam (MITI-V aka the ‘Mighty Five’). These countries are expected to penetrate the global manufacturing market at an accelerated rate with predictions they’ll be well within the top 15 nations on manufacturing competitiveness over the next five years.
Due to the low labour costs, The Mighty Five is becoming an increasingly attractive manufacturing destination. Anchored by China, Japan and South Korea, this Asia-Pacific cluster is making waves with innovation and talent acquisition whilst still retaining cost effective ecosystems.
What’s interesting however is that BRIC countries (excluding China) have declined in their overall competitiveness. Brazil and Russia have faced economic and political unrest over the past few years, leading to stagnation in business developments and commercial production. India, however, has recently been appointed a new Government which is set to improve its current competitiveness, with the initiatives ‘Make In India’ and ‘Skill India’ already predicted to take hold over the next five years.
To compete with the likes of Japan, US and China, who are already beginning to invest in advanced manufacturing, global manufacturers should look to harness an inbound marketing approach that supports the digital infrastructure that Industry 4.0 will bring. In doing so, they can expect to build deeper relationships with end users, offer a digital experience that aligns with the changes in buying behaviour and build ecosystems that connect people with organisations.
Inbound marketing relies on data to merely exist, as it’s the compound to pretty much all operations. So when it comes to the industrial industry, it’s no different. “Comprehensive data analytics are the prerequisite for successful implementation of digital enterprise applications.” – PwC 2016.
Using big data is driving decision-making, presenting a more 360, holistic view of your entire market. Data can be analysed endlessly, however for an effective customer retention plan you need to be looking at the information that will enable you to make sense of market developments, study the shifts in buying behaviour and look into improving or expanding upon your product portfolio to reflect societal demands.
The concept of being hyper-connected to people, devices and systems at all times plays into your marketing hands, in that you can access customer data and analyse how they interact with your company and utilise your products. In providing the right products and technology, based on in-depth insight, customers are more likely to value your digital offerings and develop a trust in your brand.
Manufacturers who begin to adopt the Industry 4.0 applications and action changes within their organisation to make it a viable business model will be creating strategies that are customer-centric. Placing end users at the heart of value chains and R&D will essentially produce a more targeted offering that appeals to the evolving demands of consumers.
The shifts in how we consume content have arisen due to the advancement in technology such as the use of smartphones, which grew by 78 percent from 2013-2015. This market intelligence should be used to form cross-channel marketing communications that effectively reduce lead time and makes better use of distribution channels. For effective lead generation to occur within a manufacturing 4.0 environment, you need to implement digital platforms that foster a collaborative relationship, ensuring these platforms encourage increased interaction throughout the all stages of the journey.
Customer relationship management
Back in the days of Yore, marketing was a shameless ploy used to promote the company’s agenda and services without any thought behind the channel or platform they were using to connect to this wide, generic audience. However as aforementioned, a customer-centric approach means you can apply Industry 4.0 capabilities in response to cultural shifts and produce customised items.
This customisation and personalisation is another paradigm shift towards a world where we’ll all know each other’s names, average monthly heating bill and favourite roast dinner condiment. Customers want a unique experience, proving that businesses understand their individual pains and have taken the time to tailor marketing messages specific to what they need.
Customer integration also gives room for marketers to not only respond to change, but anticipate it, developing bespoke digital products with agility. This has dual benefits; one in that it helps to retain customers, and the other in that it maximises your sales potential and adds to business growth.
The shift towards higher value products and services is a global manufacturing trend that is only going to evolve and become more prevalent as a means to remain competitive. Through the connectivity of people, organisations, systems and policies, new ideas can be brought to life as commercially viable products.
According to the Global Manufacturing Competitiveness Index 2016, Japan, one of the original manufacturing powerhouses of the 20th Century, has been rated among the strongest global markets in terms of manufacturing innovation, proving that investments in R&D are critical to the performance of your manufacturing company.
Although the opportunities are evident, there’s still challenges. Growth marketing agency Catalyst has created an in-depth report into the state of UK manufacturing, detailing what you might face and how to prepare.
Download it here for free: www.wearecatalyst.co.uk/state-of-manufacturing