Manufacturing in the age of experience
By Cho Young-bin
Cho Young-bin, managing director of Dassault Systemes Korea
The age of the product is finished. Products are no longer enough. Consumers demand more from the things they buy. They want products that are better, cheaper and more customized. They want full-blown experiences.
Experience is a concept that has been variably equated with customer service and support, product usability, design, brand, shopping experiences and online interactions with customers. In fact, experience is bigger than product or brand, and far larger than any single touch point.
However, every successful experience requires an efficient way to produce the product.
As a result of pressures from consumers for better experiences, the world of manufacturing, already transformed by waves of technology and globalization, has a new goal, across all markets: mass customization and quick delivery to an on-demand generation of consumers. Everyone is racing toward the same objective.
It is going to take time to integrate the industry’s existing manufacturing software and systems to make this global vision a reality.
Today’s challenges and solutions tend to fall into three areas of the broader manufacturing equation.
The first area is digital manufacturing which handles everything related to helping a manufacturer define the way to produce things. This layer exists between the engineers and the actual shop floor. Because the product has been designed and engineered fully in 3D, the manufacturing processes also can be modeled virtually.
The second area is manufacturing operations management. It is the definition of what happens on a day-to-day basis during production. It connects all the people and machines on the shop floor and assigns them tasks and makes sure that the necessary parts or materials are in place. It is communicating “material requirements” back up the supply chain.
The last area is supply chain planning and operations that allow manufacturers to decide how much capacity they need and where they need it. They can improve their visibility into a global manufacturing and supply chain footprint and better synchronize it, attacking bottlenecks through the entire value chain and solving them efficiently.
These three pillars of manufacturing software and systems are typically connected in today’s enterprises but not fully integrated into a single product or system.
The next evolution in the industry will do that.
The experience economy and the consumer demands driving manufacturers require it. The result of this evolution is a single, federated view of models, processes, operations, and planning optimization that helps target production and greatly reduces time to market.
Recognizing that consumers are demanding more customized products, it will no longer suffice to make quantities of a product, ship them to a warehouse, and wait for retailers and customers to draw down those stocks.
Instead, the consumer is going to walk into a store or go online to a shopping site and say, “Here’s what I want.” Customers will choose designs from a catalogue or online site and even specify what type of material they want. That information is fed backward up the agile supply chain and production bandwidth is allocated, both at the macro and detailed shop floor level.
This platform revolution in manufacturing, from the supply chain, to the processes, to the shop floor, promises to be as big as the arrival of industrial robotics and automation, if not bigger.
Manufacturing is such an important part of the industrial structure of Korea that it accounts for 30.3 percent of the gross value added. It is not an exaggeration to say that the future of Korea depends on how quickly we innovate in manufacturing in advance of the 4th Industrial Revolution.
Looking at the 4th Industrial Revolution Readiness Rankings announced by the Davos Forum, however, Korea is ranked 25th. Considering that Korea is the 11th largest economy in the world, we can see that Korean companies still have a long way to go in the age of this new economic era.
Then, what must the Korean manufacturing industry, and for that matter, Korean industries, do to survive and prosper? First of all, we must closely analyze and study what our key competencies are. It may sound completely obvious, yet it is not being practiced that often.
Whenever a “game changer” arrives and disrupts the market, we have always been prone to adopt the modifier “Korean-style,” and make efforts to catch up with them.
Now is high time to tap into our own competencies and concentrate our energies on making new experiences for our own customers, ahead of market trends.
Also, the key to the 4th Industrial Revolution is to boldly abandon our past business models and strategies, that is, the hardware-oriented process and culture.
Korean companies concentrated on the hardware process and culture, and enhanced their competitiveness while utilizing the “fast follower” strategy. Now it’s time for us to do away with what we are accustomed to, and create more three-dimensional and creative experiences based on a more software-oriented and horizontal way of thinking.
The writer is managing director of Dassault Systemes Korea.