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How Smart Products Change Business Processes

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How Smart Products Change Business Processes
How Smart Products Change Business Processes

Video: How Smart Products Change Business Processes

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Video: How to Analyze a Business Process: Business Process Modeling Made Easy 2023, February

The expanded capabilities of the smart, connected products, which are currently coming to the fore, will not only have a drastic impact on market strategies and industry structures in the manufacturing sector. Practically each of the core functions, such as product development, IT, manufacturing, marketing or sales / service, is also redefined internally in the manufacturing company. Completely new functional areas will also be created. These changes in products and organizational structures are not easy and involve uncertainties. But companies that are making the switch will benefit greatly in the long term.

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Change is worrying for companies

These are the theses of Prof. Michael E. Porter (Harvard Business School) and James E. Heppelmann, President and CEO of PTC, who describe the organizational changes and challenges that the Manufacture and distribution of intelligent networked products in the company itself. For many companies struggling with the transition to smart products, the change is worrying or destabilizing, as it would bring internal adjustments, competition problems and security concerns.

Additional information on TIP The 7 basic principles for the development and construction of networked products

  • Variability at a low price: Variations are expensive for conventional products, since they each require a new physical component. The intensive use of software makes it easier and cheaper to achieve a variety of products for smart products. The agricultural machinery manufacturer John Deere, for example, does not produce different performance versions of an engine, but only produces a standard size. The horsepower can then be varied by software as required (Fig. 4).
  • Continuous further development of products: With networked products, it is no longer necessary to wait until the next product generation for improvements. The manufacturer can use software and often remote maintenance to bring a function of the product onto the market, the development of which was not yet completed when it was sold. Electric car manufacturer Tesla, for example, wants to expand its autopilot functions over time with software updates (Figure 5).
  • New user interfaces and augmented reality: digital user interfaces on tablets or smartphones give users more mobility than buttons, displays and switches on the device. With augmented reality, additional information on the digital product is displayed on the tablet or in special glasses, which makes maintenance or repairs easier, for example.
  • Continuous quality management: Networked products enable continuous feedback of performance data during use. This practical data can be used directly in the design and help to solve product problems that had not yet occurred in the prototype tests.
  • Networked customer service: Design must also take into account the need for additional instruments, data collection tools and diagnostic functions for condition and performance monitoring, which indicate impending failures in advance.
  • Basis for new business models: With smart products, the manufacturer is no longer able to simply sell the product, but rather its function as a service. A switch to the new business model service can then also affect individual design parameters. For example, different user data / consumption must be recorded so that the customer can be billed exactly.
  • Linkage with other systems: If the product is part of a larger system, the opportunities to simultaneously develop and improve hardware and software across product categories also multiply.

The authors describe a number of technical-organizational approaches as to how the transformation from the manufacturer of conventional products to the provider of sophisticated Internet of Things (IoT) solutions in the individual departments / functions of the manufacturing company affects or can be successfully managed. The focus is currently on the organizational structure, because the organizational charts that have been established for decades are beginning to break open and change (Fig. 2). The functional areas will work together in a new way and in any case will have to coordinate more closely than before. But you are only at the beginning and therefore there is still no silver bullet for realizing the new structures. (On the many examples of networked products in practice that can be found in the original article,can only be entered here and there for reasons of space).

Content of the article:

  • Page 1: How smart products change business processes
  • Page 2: Networked products change competition and manufacturers
  • Page 3: The goal is the automated, self-controlling factory
  • Page 4: Share of smart products still under 50% for decades

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