David Chuter is CEO of the Innovative Manufacturing Cooperative Research Centre (IMCRC). The IMCRC provides matched funding from the Commonwealth to support industry-led university collaboration to develop advanced manufacturing projects. David’s team recently published a survey report looking at the state of advanced manufacturing across its contact base.
The Report urges manufacturers to look beyond the day-to-day to get structured and organised – in other words develop the strategic skills needed to support growth.
There are 3 components:
1. Data through digitisation
How is value created?
The idea is that if you don’t know how your business makes money then it is difficult to prioritise where to invest or the financial benefits it will deliver in revenue growth or margin growth through productivity or efficiency. Measuring key business processes allows you to baseline the impact (financial and competitive) of investing in new technologies including digitisation and data.
If you don’t know how customers expect your product to perform, and then measure that performance when customers use your product, then you cannot develop valuable service offers to replace / complement sales of your product.
Data literacy is a key issue.
Only 33% of survey respondents reported that they knew how to create value in their businesses, and only 20% had a digital strategy or measured key business processes.
2. Customer insight
How do you become an order-maker rather than an order-taker?
The idea here is to develop strong observation and customer listening skills in your executive teams and sales and marketing teams so that they can gather customer feedback and then collectively filter that feedback to distinguish (value-creating) signals from the noise.
How any businesses truly know their customers, the challenges their customers are facing rather than just the problems their products solve?
How many businesses have structured customer engagement processes?
How many businesses train their key personnel to observe and listen for value creating signals?
3. Strategy skills
Where are you today? Where do you want to be in 1,2,5 years? What actions will you get there? Is everyone on-board?
40% of survey respondents said they had a strategy, but only 15% had discussed this with their employees. 66% say they are driven by day to day operational or financial imperatives. (Order-taking.)
That said, 66% said they could be more innovative. 40% cited time and skills as barriers to innovating. Most innovating energy is spend on optimising production and processes not in developing new products (or implicitly engaging with customers).
Only 50% say that their products or what they do has some uniqueness..
Getting a plan that everyone agrees on, prioritising actions to get you from today to where you want to be in 1 ,2 and 5 years, and then having the discipline to implement and stick to it is a skill and competency.
But if you don’t have a plan you are on the road to nowhere.