The digital manufacturing revolution promises increased productivity and operational cost efficiencies. But according to UPS’ vice president of Customer Solutions, Charlie Covert, it could be much more: a catalyst for innovation and top-line revenue growth.
“Companies tend to underestimate the potential return on their investments in more digitally driven operations,” says Covert. “Digital initiatives should absolutely drive efficiency, but you should also expect those enhanced capabilities to make you some money down the road in terms of process or product innovations.”
Covert provides an example of UPS technology initiatives that improved the global visibility and flow of packages through its global network while leading to customer service innovations like the UPS Access Point™ Network of local drop-off and pickup locations, and UPS MyChoice® that gives consumers more control over where and when their packages are delivered.
Says Covert, “Visualize what your new digital capabilities can do in the way of operational improvements, certainly, but don’t stop there. Think bigger. Think broader.”
The best kept secrets of digital transformation (DX)
The UPS example notwithstanding, innovation and growth remain among the best-kept secrets of digital transformation. The reason: amid cost and speed-to-market pressures, and the substantial time and financial investments required to make those improvements, manufacturers are motivated to move fast. But Covert cautions against shortchanging the business case.
“The very nature of digital transformation requires that companies break down the technology islands that have sprung up to serve isolated work groups,” he says. “This vast connected network should weave through every area of the enterprise. It stands to reason that areas like customer service and marketing have as much stake as operations or finance in what the technology can do.” He adds, “Getting new perspectives is often what leads to unexpected opportunities for topline sales growth.”
Covert shares an unlikely example of 3M’s Post-it® note to demonstrate the power of collaboration. Although a 3M chemist invented the lightweight adhesive that adhered to surfaces without causing damage when removed, the chemist didn’t know how to monetize the invention. If not for his coworker who thought the sticky pieces of paper made excellent bookmarks, today’s so-called “sticky-notes” may never have come to be.
Covert acknowledges the Post-it note example may seem simplistic but the lesson is important: to get the most out of a technology investment, you should get perspectives from a wide range of user groups -- those using the tech directly and also those who will rely on data analysis to make business decisions.
“We tend to think about how tech implementation can improve our own sphere of the operation,” he says. “But what if collaboration with customer service leads to capturing data they can use to successfully up-sell thousands of transactions? Or what if inputs captured by salesforce productivity tools provides creative fuel to your product development and operations groups? Somewhere out in the organization is a Post-it note kind of idea just waiting to be found.”
The technologies underlying today’s industrial innovations are not only complex, they’re changing at an unprecedented speed. Few businesses are equipped to operate “business as usual” while also transforming, innovating and disrupting the marketplace with in-house talent alone.
The quest for innovation has largely led companies in one of two directions: they either initiate or become targets of vertical acquisitions; or, they assemble an array of collaborators from the worlds of business, technology and academia to beef-up and accelerate product development.
Covert urges manufacturers to add trading partners in the innovation huddle - suppliers, service providers, logistics companies, and so on. “Trading partners have already made investments that could offer a head-start on important aspects of digital transformation. Contract warehousing or distribution services, for example, may offer more advanced digital and integration capabilities that can help you scale up faster to meet new revenue opportunities.” He adds, “Or maybe you’d want to outsource service parts operations so you can go after business that’s more in your wheelhouse and positions you better for future growth.”
The implication in Covert’s comments is that observing from the sidelines and hoping to be a fast-follower will no longer work. “Start now,” he says. “Digitally-connected operations hold tremendous potential for savings and growth, but more so for those who test and learn and capitalize on that knowledge before the competition. Basically, if you’re standing still these days, you’re falling behind.”
Learn more about ways UPS can help you supplement your DX efforts.
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