The New CompetitioN
Connecting to the Customer
Manufacturing, Refined or Reinvented?
Industry 4.0 Dangers
Industry 4.0 ROI
In the manufacturing industry, disruption is more likely to come from outside than within. Tech-savvy outsiders have the potential to upend traditional manufacturing, whether through hyper-customization or transforming the economics of production. To stay afloat in a down market and ultimately escape commoditization, manufacturers must find new ways to stand out.
The New Competition
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From the Internet to mobile phones to social media, technology-enabled connectivity has changed the very fabric of human lives—the way we communicate, who we talk to and even the way we perceive the world. Manufacturers must respond to these evolving consumer behaviors and adjust their customer experience (CX) strategies accordingly, regardless of whether they’re B2B2C or just B2B.
Connecting to the Customer
Manufacturing, Refined or Reinvented?
With greater connectivity comes greater vulnerability to cyber attacks and data breaches. There has never been more information to harness—and to simultaneously insulate from risk. However, too much focus on security can hinder Industry 4.0 innovation efforts.
Industry 4.0 Dangers
An overwhelming majority of manufacturers say their Industry 4.0 initiatives to date have been successful, having cited revenue and profitability growth as a result of their investments prior to the COVID-19 outbreak. Realizing this ROI will likely better position manufacturers as they regain their bearings.
Industry 4.0 ROI
The 2020 BDO Middle Market Industry 4.0 Benchmarking Survey was conducted by Rabin Research Company, an independent marketing research firm.
Methodology
Executive Titles
Executive Titles
Annual Revenues
Annual Revenues
$751 Million to just under $1 Billion
44%
$1 Billion to just under $2 Billion
19%
$2 Billion to $3 Billion
9%
$501 Million to $750 Million
16%
$250 Million to $500 Million
12%
Annual Revenues
Tech
33%
Non-Tech
67%
Executive Titles
Chief Information Officer
20%
Chief Executive Officer
20%
Chief Financial Officer
6%
Chief Operating Officer
20%
Chief Marketing Officer
12%
Chief Technology Officer
13%
Line of Business Executive
9%
Customer segmentation
50%
Click each circle to learn more.
Connected
Manufacturing
2020 Middle Market Industry 4.0 Benchmarking Survey
A recent survey of C-suite executives at middle market manufacturers shed light on their Industry 4.0 plans, projections and maturity levels. Take a look at the 5 biggest takeaways.
Hyper-Customization
Servitization
Disintermediation
Commoditization
Disruptive Pressures
Commoditization ranks as the third biggest Industry 4.0 threat in 2020
58% are either currently deploying or considering deploying 3D printing technology
59% cite revenue diversification as a top Industry 4.0 objective in the next 18 months to
3 years
56% sell direct
to consumers
45%
Industry Outsiders
55%
Industry Peers
Manufacturers are most threatened by disruption from...
CX Priorities for Improvement
CX Priorities for Improvement
Current CX Strategies in Place
Current CX Strategies in Place
Current CX Strategies in Place
Integrated customer engagement
48%
Customer journey mapping
40%
360-degree customer view
37%
Customer co-creation
37%
Consistency
42%
User-friendliness
43%
Personalization
46%
Speed
48%
Quality
62%
CX Priorities for Improvement
Emerging Industry 4.0 Revenue Models
Subscription Services
Where customers pay a recurring fee for continued access to a product or service.
Convenience
Lower upfront investment
Faster access
Customer Benefits
Customer
engagement
Recurring
revenue
Behavioral
insight
Vertical supply
chain integration
Business Benefits
Pay-Per-Use
Customers are charged based on usage or consumption levels, offering them greater flexibility.
Greater flexibility
Lower upfront investment
Faster access
Customer Benefits
Low-cost experimentation
Market expansion
Supplemental revenue
Business Benefits
Product-as-a-Service
In its purest form, the service replaces the product: instead of purchasing a car, the customer pays for the ride.
Outcomes-based pricing
Frictionless
On-demand access
Customer Benefits
Improved customer
engagement
Lower
inventory
Recurring
revenue
Upsell
opportunities
Business Benefits
Data-as-a-Service
Data-as-a-service reimagines information as an asset that can be monetized by selling access via the cloud.
Higher data quality
Agility
Actionable insight
Customer Benefits
Cost-effective setup
Competitive differentiator
Supplemental revenue
Business Benefits
Subscription Services
Where customers pay a recurring fee for continued access to a product or service.
Convenience
Lower upfront investment
Faster access
Customer Benefits
Customer
engagement
Recurring
revenue
Behavioral
insight
Vertical supply
chain integration
Business Benefits
Cyberattacks and data privacy breaches are manufacturers' #1 digital and regulatory* threat
*Data from BDO’s 2020 Manufacturing CFO Outlook Survey
#1 Industry 4.0 ObjectiveS...
SHORT-TERM
Operational efficiencies
LONG-TERM
Diversify revenues
As Industry 4.0 becomes increasingly fundamental to the way business is conducted, more manufacturers will shift their focus from optimization and the bottom line—where it is today and will likely remain throughout the current economic downturn—to reinvention and revenue diversification.
CCPA
ICS Attacks
DoS Attacks
Emerging Cyber & Privacy Threats
The California Consumer Privacy Act is a stringent new data privacy regulation with applicability well beyond the state of California and consumer-facing organizations.
Industrial control systems are enabling automation— but also opening the door to attacks on operating technology, with real-world physical consequences.
Denial-of-service attacks can result in supply chain disruption—even if your organization isn’t directly targeted.
Does the CCPA apply to you?
Does the CCPA apply to you?
Results of 2019 Industry 4.0 Investments
25%
Increase by 10%+
Increase by 1-9%
48%
No Impact
24%
Decrease
3%
Profit
Profit
Revenue
Revenue
Profit
Revenue
Increase by 10%+
17%
Increase by 1-9%
55%
No Impact
27%
Decrease
1%
Increase by 10%+
25%
Increase by 1-9%
48%
No Impact
24%
Decrease
3%
Profit
89%
say their Industry 4.0 initiatives
have been successful
*Reflects revenue and profits in the 12 months prior to COVID-19
**Excludes respondents that did not make any recent digital investments
View our Industry 4.0 guide for middle market manufacturers
Click each tab to learn more about each revenue model.
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General
Energy
Financial Services
Healthcare
Technology
Retail
* This survey was conducted in late 2019, prior to the global COVID-19 pandemic.