Even the most dominant and entrenched companies aren’t insulated from the disruptive power of new technology. There are many examples, and some go back a long way. Trains and horses were long the preferred mode of transportation in the U.S. before Henry Ford and others mass-produced affordable automobiles; Kodak was synonymous with photography before digital imagery became ubiquitous and accessible to anyone with a smart phone; and remember the days when a trip to Blockbuster was a Friday night staple?
Anyone who thinks that manufacturing is immune to the disruptive power of emerging technologies is wrong. Or they’re simply not paying attention. Technologies that have the potential to fundamentally upend—and dramatically improve—the manufacturing industry are already emerging on the factory floor. Though still in its infancy, artificial intelligence has the power to vastly increase the efficiency and, ultimately, the profitability of manufacturing operations. One simple example: Artificial intelligence allows for automatic predictive maintenance to be performed on equipment well before it fails, leading to less expensive downtime and rush repair work.
Are you ready for blockchain?
The next big technology set to have a big impact on manufacturing is blockchain. You’ve undoubtedly already heard about blockchain, although chances are it had something to do with the technology’s use in cryptocurrencies, like bitcoin. But corporations and governments around the globe already understand that blockchain technology is going to reshape industries ranging from energy and banking to real estate and health care.
Here’s why: Blockchain technology is basically a distributed ledger, or spreadsheet. Information that is entered into each cell, or block, of the ledger is locked and becomes un-editable afterwards. This fundamental feature of blockchain is what makes it so widely appealing when goods change hands, or a chain of custody needs to be verified. Take the medical industry as an example. Medical records have long been a significant area of risk for health care providers and a source of worry and distrust among patients.
With blockchain technology, the risk of medical records and data getting lost, stolen or misused is virtually eliminated, and the confidence that only patients and their doctors and nurses will be able to access them skyrockets. Secure records of millions of daily transactions would also greatly benefit a variety of industries, which explains why a Deloitte survey of 308 senior U.S. executives found that 28 percent had already invested at least $5 million in the development of blockchain technology.
Blockchain in manufacturing
Many of the same benefits could be delivered to forward-thinking manufacturing companies. For example, the legitimacy of manufacturers and the willingness of customers to continue and expand their relationships with manufacturers depends on transparency. That means transparency in everything from order status to supply chain to invoicing.
When transactions take place using blockchain technology, they’re distributed in nature, meaning that both manufacturers and their customers always have the same view, a feature that builds an enormous amount of trust. Supply chains utilizing blockchain technology are a good example of how this works. Products made by manufacturers can be outfitted with location-based technologies and integrated into the distributed ledger made possible by blockchain technology. When this happens, it means that both customers and manufacturers know exactly where a product is in the supply chain at any given time.
This can cut down on the potential for incorrect orders being fulfilled and the need for manufacturers to deal with large volumes of returns; a lose-lose proposition for both manufacturers and their frustrated customers. When both manufacturers and their customers have complete confidence that orders are correct and making their way through production, there’s much less time spent tracking down answers to customer questions. This allows manufacturers to spend more time understanding and responding to their customers’ biggest needs and challenges. Time spent meeting with customers and uncovering new opportunities to serve them better is far more fruitful than time devoted to scrambling in order to find information about the status of a delivery.
Verified, visible transactions that are inherent with blockchain technology also have internal benefits for manufacturers. Companies that work in tightly regulated industries, such as chemical manufacturers, can prove compliance to government regulators in a far more streamlined and inexpensive manner using blockchain technology. Efficiency on the actual factory floor can also be improved when manufacturing robots are equipped with blockchain technology. This allows for continual monitoring of the robot’s performance and automatic reordering of parts when necessary.
Does your company culture embrace new technologies?
What does it take to reap the many benefits of blockchain technology? In part, it means having an internal company culture that is willing to embrace the promise of new technology. When that is in place, it’s important to find technology vendors that have a similarly pioneering mindset. The vendors you work with should be proactive about developing new software solutions that harness the immense potential of technologies like blockchain. If you don’t work with a vendor that is forward thinking, it’s literally impossible for you to be on the cutting-edge because you already rely on their software.
This is all to say that disruptive technologies offer all manufacturers a choice. When an abundance of caution is paired with the wrong vendors, it’s likely that you will be the one disrupted by emerging technology. But with a mindset more open to change and the right vendors you’ll be the one doing the disrupting. It’s ultimately an easy choice to make.
About the Author:
Mickey Patton is president and CEO of Clear C2, the leading CRM for manufacturing companies. Patton joined Clear C2 in 1998 and has extensive knowledge of how manufacturers can use technology to streamline and maximize their customer relationships throughout the most complex sales cycles and ecosystems.