Enabling innovation with a digitized workflow
Machinery manufacturing is capital-intensive and complex. In the past, these two factors kept the barrier to entry high. Today, however, new players in countries with lower labor costs and rapidly developing manufacturing sectors are chipping away at the historic market leaders. As more and more buyers have been exposed to these emerging global brands, their loyalty to the established brands has decreased.
The buyer profile of equipment and machinery purchasers is also changing. Younger, more connected individuals are moving into decision-making roles. This new generation of buyers is heavily influenced by the fast-paced innovation of consumer electronics and on-demand services such as Uber, Netflix, and Peapod. Yet, the rate of innovation among equipment and machinery manufacturers has been historically slow relative to other industries.
Likewise, equipment and machinery dealers are realizing they have less influence as well. Today’s buyers are accustomed to doing their own research on multiple channels to determine what machines and equipment they will purchase. Now more than ever, it is imperative that legacy companies deliver innovative products and services if they want to preserve their brand equity.
How do we improve the rate of innovation among machinery manufacturers? First, we have to look at some of the underlying reasons innovation is slow.
Six reasons innovation is slow
The capital-intensive nature of manufacturing requires organizations to be large, resulting in broad, complex, and interdependent product offerings.
Fragmented international markets lead to regulatory-driven product designs that consume development dollars better spent on product innovation.
Products can be highly customizable with a staggering number of permutations that compound the design, development, and manufacturing efforts.
Part-reuse strategies often create challenging interdependencies between various models.
Most manufacturers are conglomerates made up of historic acquisitions, resulting in siloed systems and processes that hamper coordination.
Many individual machine components are highly engineered, requiring elongated timelines for design, development, prototyping, and validation.
While much of this complexity is inevitable, many organizations do little to equip their product development teams to successfully and efficiently navigate this landscape. Investment in internal tools or applications is frequently overlooked because it is rarely linked to increased revenue or profit. As a result, the technical debt of a company’s internal system grows, hindering the ability of employees to work efficiently.
It is not uncommon for engineers, procurement teams, planners and production specialists to have to use a dozen or more core systems to perform their job. Fragments of information reside in various legacy and mainframe systems with green-screen interfaces and serious limitations. Data is difficult to visualize and relationships between components are difficult to establish. Ultimately, obtaining actionable insight can become an enormous challenge.
Case study: Multinational Fortune 100 machinery manufacturer
In 2016, Devbridge engaged with a large, multinational machinery manufacturer whose leadership recognized the value of improving the way teams planned complex product-development projects. This organization had a myriad of product lines under development, each with dozens of series that contained multiple models. Within each model, there were even more options a customer could choose from.
Over time, a complex system of Excel worksheets had been built to capture all these product variables. A global team of more than 40 individuals maintained the sheets and would regularly use this data to create presentations that illustrated timelines, investment strategies, and dependencies. This team also used the sheets to monitor the overall portfolio for product-line gaps that might lead to a competitive disadvantage.
In principle, a system like this should provide the visibility necessary for decision-making based on output and status. In reality, it often created confusion and required a small army of well-paid individuals to maintain.
The system broke down for several reasons:
Manually creating presentations from these worksheets was often error-prone and time-consuming.
Data became outdated the moment it was exported from the source worksheet.
No single source of truth existed and version control of the spreadsheets became complicated. Conflicting copies and guesswork were commonplace.
The capability to perform analysis was non-existent. There was no way to efficiently find anomalies and make batch changes. Every effort was ad hoc and manual.
There was no way to monitor for problems such as a delay in the release of one option affecting the release date of other options.
Initially, the manufacturer trialed several off-the-shelf solutions that looked like they could replace the worksheet system. It quickly became apparent, though, that these products only provided about half of what was needed out of the box. Even with extensive customization, none of them could provide more than 70 percent of the required functionality or the extensibility to address future needs.
Devbridge worked with the organization’s key stakeholders to workshop and define a simple, customized solution that could meet their needs. Within several months, and for very little investment, a minimum viable product (MVP) was built that could be validated by a subset of the user base. The client immediately saw the value of a custom platform. Rather than having to change their organization to fit an off-the-shelf solution, they could create a tool that accommodated the decades of practices they had established within the organization.
Initially, the product’s design was dictated by the company’s unique workflows and specific hierarchy of products. Soon, however, it became apparent to everyone that implementing additional functionality would make other jobs easier as well. Data could become more useful for driving decisions and possibly redefine the way investment schemes were developed.
The process wasn’t easy, though. Traditional approaches to working with datasets were so ingrained within the organization that import/export functions for Excel sheets were a common ask. Users wanted to work the way they had in the past and only use the tool to visualize. The team quickly responded to this feedback and set about implementing functionality that made the user experience more efficient and productive than ever before. Their goal was to eliminate offline manipulation of data so live data could be used when making budget-request and milestone presentations.
Since 2016, five releases of the product have allowed more groups within the company to make use of it. This includes the release of advanced functionality that makes it possible to manage the entire 20-year product-development outlook. Advanced scenario-planning tools that help hedge risk have also been added. The results have been remarkable.
By choosing a customized portfolio-management platform that conformed to their practices and provided a single source of truth, the company has gained a competitive advantage in three significant ways:
New features and products are released quickly and regularly, making the company more responsive to market changes and customer needs.
Better coordination across product lines has resulted in more efficient designs that encourage part reuse and keep costs under control.
The staff of 40+ can now focus on product innovation versus excel data integrity
"Formerly, planning cycles culminating in product strategy meetings took weeks of preparation. Now live data can easily be visualized, discussed, and manipulated on-the-fly, making these strategic milestone meetings incredibly productive and effective.”
-Executive at Fortune 1000 agriculture manufacturing company