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Survey: Manufacturers’ Digital, Service Capabilities Lagging

By Pharmaceutical Processing | December 1, 2015

Although the vast majority of manufacturers recognize the growing importance of digital technologies and product services, relatively few are maximizing those opportunities, according to a recent survey.

The Cisco report—which polled 625 manufacturing executives from 13 countries—found that 86 percent of respondents considered services, instead of products alone, a key component of their growth strategies.

Nearly 80 percent, meanwhile, believed that technology will significantly impact their companies’ production, led by digitization, the Internet of Things and analytics.

Read more: How the convergence of service and tech is creating a new breed of consumer.

Cisco analysts projected that digitizing would generate nearly 13 percent in additional profit over the next three years for a $20 billion manufacturer.

“When you look at digitization, if we can fully leverage the benefits of digitization and IoT, all the way from core manufacturing out to that end-user experience, the opportunities are exponential because we can better use all of those services, all of that data,” said Tony Bolton of General Motors’ telecommunications division.

The report said that one-third of industrial machine builders are already receiving plant data from their customers, while a majority of companies in that sector planned to implement that technology. Only 6 percent did not indicate plans to access customer data.

The report, however, also said that the current service-related manufacturing market pales in comparison to its potential.

Cisco Consulting Services attributed $383 billion in value to connected products and service models, which effectively leaves 76 percent of its overall value “on the table.”

In addition, the poll found that just 29 percent of manufacturers believed that their service-related operations would grow at a faster pace than their product operations. Respondents were particularly concerned about business complexity, potential profitability and monetizing customer data.

“One challenge is on the technology side, making sure that the right infrastructure is provided,” said Dirk Slama of Bosch Software Innovations. “The second challenge I would see is more on the organizational level, to make sure that you somehow help your organization move towards these new business models.”

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