Trend: Why Manufacturing Needs to Reinvent Itself – Fast!
I had a long conversation with a potential client in the manufacturing sector the other day; they’re looking to bring me in for a keynote in 2016. I’ve developed a reputation in the industry for some cutting edge insight into the key trends that are redefining every single aspect of the sector at an extremely furious, fast pace. I’ve headlined events for tens of thousands at major manufacturing conferences in Las Vegas, Chicago, Orlando and Detroit.
What’s going on? Here’s a quick snapshot:
- collapsing product life cycles – simply put, products don’t have as long a lifespan in terms of relevance, consumer attention, rapid escalation of design ideas — whatever the case may be, with shorter life spans, manufacturing organizations are having to pick up the pace!
- the Internet of Things and product redefinition – every device becomes connected, intelligent, aware… this has major implications in terms of how devices are designed and manufactured. Suddenly, many manufacturers are finding that they must integrate sophisticated user interface capabilities into their products, not to mention advanced computer and connectivity technology.
- rapid design and rapid prototyping. We’ve seen incredible advances in the ability to conceive, design and develop new products faster than ever before. There is a constantly rising bar in terms of capabilities, and if you can’t pick up on this, you can be sure that your competitors will. The first to market with a new idea is often the winner.
- the influence of crowdfunding on product design. There is no doubt that the global connectivity that the crowdfunding business model provides is resulting in a change in product conception. Suddenly, anyone can have an idea, fund it, design it, and bring it to market. What I’ve witnessed are situations where these small scale projects are light years ahead of what we’ve seen with established industry players. Crowdfunding is the new garage in many industries.
- build to demand vs. build to inventory business models. Big auto companies build hundreds of thousands of vehicles, and shove them out to dealers hoping they sell. Tesla Motors takes an order, and builds the vehicle to send to the customer. Big difference — and this model is driving fundamental business model change across every aspect of the manufacturing sector.
- agility and flexibility. The impact of build-to-demand models is that manufacturers must provide for a lot more change-capability throughout every aspect of the process, from supply chain to assembly to quality control. The ultimate in agility? The Magna factory in Graz, Austria, which can custom build a wide variety of automobiles from completely different car companies.
- post-flat strategies. What happens when the world gets flat? Put a ripple in it! That’s been the focus of a few of my keynotes for several manufacturing clients. I’ve spoken about organizations who have evolved from having to compete with low-cost producers by focusing on price, to a new product lineup that is based on quality, consumer perception, brand identity, or IoT connectivity.
- faster time to market. Consumers today have perilously short attention spans. In some sectors, such as fashion, high-tech (smartphones!), food and others, you’ve got to get your product to market in an instant — otherwise, you lose your opportunity.
- rapidly emerging consumer demand. Closely related to time to market is the fact that new fashion, taste trends or other concepts now emerge faster given the impact of social networks. Think about the impact of food trucks — people can now experiment with new taste trends at an extremely low price point. The result is that new taste trends emerge faster — and food companies must scramble to get new products out to the customer faster. Long, luxurious product development lead times are from ‘the olden days.’ If you can’t speed up, you won’t be able to compete.
- the fast emergence of same day delivery business models. Amazon, WalMart, Google and others are quickly building big infrastructure that provides for same day shipping. This has a ripple impact on demand, inventory, logistics …. a massive change from the old world of stockpiled inventory.
- the arrival of 3D, additive manufacturing 3D printers and the inevitable shift to “additive manufacturing” from “subtractive manufacturing based on cutting, drilling and bashing metal.. probably the biggest change the industry will witness in coming years.
- the acceleration of education requirements. Robotics, advanced manufacturing methodologies, machinining-in-the-cloud, advanced ERP processes : you name it, the skill of 10 years or even 5 years ago doesn’t cut it today. I had one client in the robotics sector observe that “the education level of our workforce has increased so much….The machinists in this industry do trigonometry in their heads.” That’s the new reality going forward!
That’s a lot of change, and there’s even more underway.
When Apple Fails…..
At the end of last year, I wrote a little document, 25 Trends for 2025. It’s a good read — and might provide you some insight into some of the unique trends that might provide opportunity and challenge going forward.
The 24th trend I wrote said this, predicting that by 2025:
Apple is Delisted
Once one of the world’s most innovative, cash-rich, highly valued company, Apple enters a new phase in 2025 when it is delisted from most global stock markets.
Why?
Most industry leaders never survive; there is always someone with a better idea.
It’s the age old rule of business: incumbency is not a guarantee!
I was thinking about this post last night, when I packed up my new 4th Generation Apple TV to send it back to Apple.
What a failure of a device. Without the ability to link to it via a Bluetooth keyboard or App as with prior generations, it just became a madly infuriating failure.
It’s the first Apple device I’ve ever returned — and my family and I probably have some 50-75+ Apple devices in our lives through the last decade.
I don’t know what the Apple Engineers were thinking with this decision, but to me, it just seems like such an obvious failure that perhaps they are losing touch with their customers and the evolution of their products.
Do they care? Are they complacent? Perhaps, probably. Will they even both to respond to one small customer in a customer base of hundreds of millions? Probably not. Could they engineer themselves into extreme failure in the future? Perhaps. History has taught us that no organization is guaranteed success into the future!
Keynote Case Study: Johnson & Johnson: Healthcare’s Next Decade Is Already Arriving.
Johnson & Johnson Services brought me in to explore how genomics, connected devices and consumer health data were converging across pharma, medical devices and consumer health, and what a global organization needed to do to keep innovating at speed.
The keynote, “The Acceleration of Medicine: Innovation Across Healthcare’s Next Decade,” made the point directly. Healthcare’s next decade was already arriving.
Scientific discovery, connected devices and consumer data were converging faster than traditional healthcare business models could adapt. Personalized medicine, connected care, empowered patients and accelerating science were the response.
Six trends are shaping that shift.
- Genomic & Personalized Medicine. Treatments move beyond one size fits all toward genetic profiles and targeted therapies.
- Connected Medical Devices. Intelligent devices extend care beyond clinical settings and generate continuous insight.
- Empowered Patient. Wearables and real time health data make individuals active participants in their own care.
- Preventative & Predictive Health. Healthcare shifts from reacting to illness toward earlier detection and proactive intervention.
- Virtualized Care. Hospitals extend into homes and communities through connectivity and remote monitoring.
- Accelerating Medical Science. Gene therapy, regenerative medicine and exploding knowledge shorten innovation cycles.
The future of healthcare is personalized, connected, predictive and fast.
Johnson & Johnson is one of several global health organizations I have worked with on exactly this question: how do you keep innovating at the speed of the science itself. You can browse more of that work in the case studies collection here.
Accelerating the Auto Industry – and the Challenge of Change!
I’ve been doing a number of keynotes in the automotive, trucking and transportation sector. Groups such as Volvo/Mack Trucks dealer conference; the Colorado Transportation Summit, the National Association of Truck Stop Owners, Chrysler, and various motor vehicle dealer association conferences. I’ve also had some fairly widespread coverage in the media. There are a large number of blog posts about my observations in the Automotive & Transportation section of my blog.
This is a FAST moving industry, with SEISMIC changes underway.
Basically, vehicles have been built the same way for the last 100 years — they run on carbon, are driven by people, don’t connect with other vehicles, and operate independantly. The business model has involved “car dealerships” and “car salesmen” and consumers frustrated with what they’ve always perceived to be a one-sided relationship.
Now, for the first time in 100 years, massive change is underway — more vehicles will not be carbon based, but based on alternative energy sources. A growing number will drive themselves. And they will interconnect with other vehicles and intelligent highway infrastructure, with profound implications on efficiency, traffic, urban and highway design, not to mention safety. A future in which a large number of the next generation might not actually purchase a car — but simply use some type of vehicle sharing service. If they do purchase a car, they will likely do it online.
You couldn’t have a bigger change than that!
And it promises a massive shakeup as the speed of innovation is shifting from automotive/trucking companies to Silicon Valley. Consider one implication: one estimate suggests that “connected cars are expected to generate $131.9 billion by 2019 with a compound annual growth rate (CAGR) of 34.7% from 2013 to 2019.” (Connected Cars: Legal Hurdles and Issues Monitor Worldwide. Oct 2014)
The challenge is this: the auto industry is somewhat ill prepared to cope with the speed of change. They are still of a mindset that involves palatial automative dealerships, when an increasing number of consumers simply want to purchase a car that they’ve already researched online. Car dealers who cling to the same way of doing business that was in place in 1960 and 1970 — a very frustrating experience for most consumers.
At the same time, we see Tesla Motors selling cars online, and setting up ‘showrooms’ in shopping malls — and various state car dealer organizations fighting back in the courts. (The casket industry tried to fight a battle against people selling caskets online. It didn’t go well!) We see Uber indicating that its ultimate business model might involve being the car service for everyone, in a world in which few people actually buy cars!
That’s why senior auto executives, motor vehicle dealer associations and others in the industry need a good, frank discussion around the future of their industry, and what they need to do to turn these perceived threats into opportunity.
That’s what I’ve been doing a lot of lately — and so if you are reading this and are in the industry, give me a call!
Article: 6 Ways the Real Estate Game will be Different in 2045
I just remembered about this article; Real Estate Australia (the national association for realtors) interviewed me about future real estate trends. You can find the original article here.
6 ways the real estate game will be different in 2045
by REA , 26 JUN 2014
Close your eyes for a minute and just imagine how modern life, and modern real estate would look like to your old boss in 1985… (That is if you had a boss in the ‘80s, or were even born…)
While this new world of connectivity makes perfect sense now, much of the way we live, and the way we buy things for example, would have seemed absurd back then. Considering we’re still living in an age of paper rental applications, the real estate industry is often a late adopter when it comes to new technology. Sure, we’ve made some fundamental reforms over the last decade, with agencies embracing online profiles, mobile apps, and online lead generation. However, the industry is expected to undergo some major shifts in coming years.
The point is, agents need to be not only keeping up with tech trends but staying ahead of them. We speak to one of the world’s most famous futurists Jim Carroll and ask what the industry should expect over the next 30 years? Prepare to suspend your disbelief and your sense of what is possible…
1. Agents in jeopardy?
When asked whether the role of the real estate agent was in jeopardy, Carroll remains non-committal. “Will more clients opt to use private means of purchasing and selling property? Maybe. Maybe not. It depends on the agent.” Adaptation is the name of the game, with Carroll saying: “If you view the current trends towards technology, private sales, and other disruptors as a threat, you are in the wrong frame of mind. Some people see a trend and consider it a threat. Innovators see the same trend and see an opportunity. Your frame of mind on how the business is changing will define how you will reinvent yourself to turn it into opportunity.”
2. Farms in the sky?
The way future cities are developed (i.e. increasing urbanisation, higher density housing) will affect the real estate game, and Carroll brings up one of the major trends he perceives affecting real estate in the future: “Vertical Farming. My research tells me that 21st century farming infrastructure will involve towers – 25, 50, 100 storeys – that are dedicated to crop production. Why? Year-round crop production and increased productivity – 1 indoor acre is equivalent to 4-6 outdoor acres or more, there are no crop failures, and it adds energy back into the grid. Already there are 800 million practicing urban agriculture called ‘city-farmers’ according to UN statistics. So yes, cities are going to change. And real estate agents should be ready to sell farming listings in the middle of a city.”
3. Your patch of dirt?
Carroll denies that property ownership will become an unaffordable fantasy for much of the middle class in 2045. “A patio, a cold beer, and kids: It’s a dream for everyone. It always will be. People aspire to space. The space may change, the method to buy it, but the fantasy won’t.”
4. Suburgatory?
What will become of suburbs – will they continue to expand, or fall into slow decline, much like many shopping malls? “I heard this question 20 years ago. People change, design changes, and right now, there is some kid in a garage somewhere defining the suburb of the future. I have no idea what that kid is thinking, other than that her mind is wired unlike mine. She’s grown up in a world with Internet 24 hours a day. They will reshape the world – and their neighborhood – in their image.”
5. Senior housing?
In residential real estate, Carroll argues senior housing will be “one of the dominant trends”. “People are living longer,” he says. “The typical baby born in western society today will live to be 100. Longevity for a part of the population is one of the challenges of our time. Society won’t be able to build all the seniors homes required; and so they will live at home. Technology will lead to “bio-connectivity. Hospitals going virtual – a doctor will be able to monitor non critical care senior patients from afar using connected medical devices.”
6. The constants?
It’s easy to look around and wonder what elements of the business will disappear or lose relevance. Will open for inspections, auctions, or cold calling go the way of the fax machine? Carroll argues that while the minutiae of the business will undoubtedly change, the core elements will remain unchanged. In other words, “People matter. People will always matter. Trust, reliance, reputation. Keep that, and you’ve got what matters. But only if you are open to the future.”
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