How partnerships between manufacturers and technology companies are accelerating value to the customer
Earlier this year, UPS and Waymo announced their partnership to begin self-driving package pickup in Arizona. This partnership is aimed at improving customer service and network efficiency. Waymo’s autonomous vehicles will shuttle packages from stores to UPS facilities.
UPS has been investing in technologies which help make its global logistics network smarter with the help of data analytics and Artificial Intelligence. The company has been continuously investing in technologies for autonomous drone delivery, robotics and facility automation.
Waymo has also partnered with Fiat-Chrysler, Jaguar and Land Rover, casting a wider net to capture the autonomous vehicle software market. To date, Waymo has driven over 20 million miles autonomously on public roads across 25 U.S. cities and conducted over 10 billion miles of simulation testing.
Elanco, a world leader in animal health and wellness products, has been trying to address the growing threat of anti-microbial resistance. To ensure long-term success, they implemented the Alternatives to Animal Antibiotics Grand Challenge Program, inviting researchers, members of the academic community and startups to provide a solution. Through crowdsourcing, Elanco was able to interact with a larger talent pool and craft multiple solutions and ideas to deal with anti-microbial resistance. Even Wipro’s Topcoder (Operating System for Talent) where their community and customers come together on the Topcoder platform to collaborate and build enterprise-grade digital assets. Standard access to the platform is free and Enterprise access gives customers a number of advanced tools, technologies, perks, premium support, and more.
Together with Designit, Wipro Digital is an innovation-led, enterprise transformation partner built for today’s digital challenges. Wipro Digital focuses on the things that matter - insights, interactions, integrations, and innovations that make extraordinary things happen for brands, businesses and their customers.
What is common between these partnerships? The shifting of business models to support rapid innovation and product development is now being implemented throughout different company profiles. The Fourth Industrial Revolution brings with it the challenges of mass customization in a rapidly evolving digital ecosystem. To improve the situation, manufacturers need to explore technical collaborations that provide support across the customer life cycle. Per McKinsey, innovative collaboration techniques can improve a company’s productivity by 20-30%.
Here are four ways the manufacturing industry is driving customer value through partnerships:
Commercializing R&D outcomes
Industry-academia partnerships are increasingly important in the development of systematic national innovation systems. This is extremely beneficial in developing countries. The collaborations bring together R&D agendas, leverage synergies and foster commercialization of R&D outcomes. For example, in the pharmaceutical industry, industry-academia collaborations are increasingly helping organizations achieve their business goals. Such collaborations are driving market performance across global healthcare organizations, in turn decreasing timelines to bring a new product to the market.
Breaking down operational silos
Industry 4.0 brings with it the power to break down long-lasting departmental silos in the manufacturing sector. Best-in-class digital transformation solutions are being adopted to improve communication between employees, unifying data sources and solving production issues with ease. A connected and open channel for data and communication means business leaders, managers and ground staff can work together on solving issues from anywhere. Resolving production issues quickly is resulting in improved customer satisfaction. Customer value is being driven by original equipment manufacturers (OEMs) that provide value added services (repairs, maintenance, product upgrades etc.), allowing manufacturers to focus on core tasks.
Increasing customer touch points
In the manufacturing industry, customer touch points are limited, which makes it difficult to stay involved with the customer after the point of sale. Collaborations help foster discovery of customer value which can be adopted by the industry for product innovation. For example, LEGO connects directly with its user through its LEGO Ideas platform where users can submit new ideas, provide feedback and interact as a community. LEGO is thus able to derive actionable business outcomes and enhance customer value.
Fostering innovation and mass customization
The move from mass production to mass customization calls for partnerships that go beyond siloed innovation in a traditional multinational company. To support distributed manufacturing models, manufacturers are collaborating with technology companies, industry bodies and the academic community. All partnerships intend to build a robust ecosystem targeted toward delivering value to customers. Forming such an ecosystem would require engagement, commitment, proactive collaboration and a common vision for organizations to transform successfully.
At the end of the day, for any organization, the concept of co-creation is to push customer value. Such collaborations help break silos in the manufacturing industry by unifying departments toward understanding the outcome of the customer’s value. But while collaborations are the way forward, there are a few things to be considered before you enter into any partnership:
- Dealing with intellectual property (IP) conflicts: While collaborations open up opportunities for new commercial tie-ups, they also create IP conflicts. Business contracts are crucial for sensitive data and determining the scope of IP sharing. While most companies are open to IP sharing, some hesitate to take part in the openness of collaborations. In some · cases, such as the military or defense, that clearly state any IP generated is the sole ownership of the government and not the enterprise. For the case involving industry-academia collaborations, universities own the resulting IP while companies are granted a non-exclusive license to use.
- International business policies: Global partnerships are also affected by regulatory policies related to industry, academic institutions, resources and technology. These policies are mandated by governments and are important in creating a conducive business environment. The Indo-Swedish industrial goods collaboration is an example of policies leading to a better business environment. With government aid and programs like “Make In India”, external parties are able to form unique collaborations. In this case, India’s scope for import-substitution in capital goods and Sweden’s R&D capabilities work together to set up manufacturing units in India – benefiting both countries.
- Making your partnerships work: Despite collaborations being the new trend among manufacturers, businesses have to keep in mind that everything comes at a price. Partnerships require dedicated resources, ownership, commitment and investment in order to run successfully. It’s important to know when to end a partnership if it is not driving any meaningful impact to your business.
Partnerships are increasingly being adopted into business models to address the entire customer and product lifecycle. Partnerships are also helping to drive process, service and product innovation across the spectrum. From customization of products during the design phase, to increasing manufacturing agility, or by adding new touch points at point of sale – collaborations are the way to increase customer value through partnerships.