The digital opportunity

The manufacturing industry as we know it is changing beyond recognition, and it’s being driven by technological innovation, as we discover in conversation with Microsoft’s Caglayan Arkan

IT developments such as the internet of things (IoT), big data and cloud computing repeatedly make the headlines as top trends to look out for over the next few years. But far from being technologies that companies can look forward to benefiting from in the future, Microsoft is keen to prove that they can be put into practice today, and yield impressive results.

“Technology is driving major business transformation across all areas of the manufacturing industry today,” says Caglayan Arkan, general manager of Worldwide Manufacturing and Resources at Microsoft. “It’s changing the way companies manage their operations and serve their customers, and it’s creating new ecosystems around the opportunities it presents.”

This year, Arkan and his team showcased some of the ways in which Microsoft is helping to drive these changes in manufacturing by exhibiting at Hannover Messe – one of the world’s largest industrial technology fairs.

At the event, the company demonstrated how it is working with the likes of Fujitsu, KUKA and Miele to ‘reimagine the enterprise in a connected world’. On show was an eco-management dashboard for tracking plant information and growing lowpotassium lettuce that can be consumed by dialysis patients and people with chronic kidney disease; intelligent KUKA robots that can sense their surroundings; and an oven that can be automatically programmed to set the ideal conditions for cooking select meals.

“What I’m proud of is how we’re engaging with senior executives at some of the largest manufacturing organisations in the world, demonstrating exactly why they should trust in us as a strategic partner and in very short cycles bring their visions to life,” says Arkan. “These are all incredible accomplishments and completely reposition Microsoft in the enterprise, allowing us to enable and empower our customers in a big way.”

On the back of what ended up being one of Microsoft’s most successful presences at an industry event, Arkan is upbeat about his company’s achievements and what this means for the future. “We’re seeing industries being redefined and reshaped by digital transformation, and Microsoft is taking a major leadership role in guiding them as their businesses evolve,” he says.

At the moment, Arkan explains that there are four key areas in particular that are impacting manufacturers: connected operations, smart products, service-centric models, and new sales and marketing experiences.

“We expect the level of automation in the industry to elevate and increase in a big way – whether that’s down to smart robots, 3D printing, the new levels of connectivity enabled by IoT or any other emerging innovations,” he says. “This will have huge implications in terms of the flexibility of manufacturing – barriers to market entry will be lowered, production could become more localised and levels of customisation will increase. Expect to see some major changes in this space in the coming years.”

The second major trend affecting the industry is the smart product. “In the past, at best, the most a manufacturer could know about the product they are building is who they are selling it to,” explains Arkan. “Now, products can report back on how they’re being used – which features and functions are being used relative to others, where they’re used and so on.The concept of smart products will allow the enterprise to offer new customer experiences and be more effective, cost efficient and mindful of how to provide and service the product.”

Arkan highlights the connected vehicle as being one of the best examples of this evolution of the smart product. “The industry has completely transformed the driver experience as well as the passenger experience, while at the same time avoiding major recalls, identifying maintenance patterns, and generally being far more proactive in terms of service delivery.”

These developments go hand in hand with another industry development: the ability to move from product-centric business models to service-centric models, where manufacturers can engage with their customers in a far more effective and meaningful manner. “This is being enabled by technologies such as machine learning and advanced analytics,” says Arkan. “Conditions-based maintenance and predictive maintenance – these are major capabilities for enterprises that manufacture or operate or service high-value assets. We will see many moving to predictive models and getting smarter in terms of how they engage with their customers and their smart products.”

The final area of focus is on how technology is enabling manufacturers to rethink their sales and marketing experiences. Microsoft calls it connected sales and marketing. “Essentially, once you know more about your customer and your product, you can then engage with that customer to upsell them while you are dealing with a repair or a problem – you run a campaign against them,” Arkan explains. “Going back to enhancing flexibility and agility in manufacturing, another thing you will be able to do is connect your dealers and your sales and marketing processes all the way back to your supply chain so that you can bring supply and demand together in a very different way. Moving away from mass production, you will be able to deliver customised products with acceptable lead times, at acceptable price points.”

These trends, combined with developments around the concept of the connected home – which, as consumers, is changing the way we think about appliances, security, entertainment and media, gaming, and becoming energy efficient, environmentally responsible citizens – are what Arkan believes will be transformational. “And then there’s the holographic experience in the design, engineering and innovation processes, 3D printing and additive manufacturing – there’s a lot more to come,” he adds.

In a nutshell, Microsoft CEO Satya Nadella defines Microsoft’s role in this new era as being in the business of empowering individuals and organisations to be able to do more and achieve more. “And this is a vision that applies to the here and now, not just the future,” explains Arkan. “For us, the future is today. We’re making things happen now for our enterprise customers that are providing them with competitive advantage, accelerated time to value and the ability to become more nimble, agile and cost efficient. Everything we’re talking about we’re already able to make a reality.”

For any business putting off any type of IT implementation or modernisation project, Arkan has the following words of advice:

“If you haven’t already, look to determine how technology will impact your business and form strategic partnerships to help transform your company into the manufacturer of the future, which we know is not going to be anything like what it is today,” he says. “In five years’ time, the industry as we know it will look completely different and what I would want to do is position my company as one of the first movers. Then I would look to technology and my strategic partnerships to make me more competitive, flexible, cost efficient and help me better connect with my customers and my supply chain. There is no right way of going through this digital transformation, but the one big mistake would be to not take action today.”