IDC Manufacturing Insights: 10 Predictions for Manufacturing in 2012

I attended the IDC Manufacturing Insights Predictions 2012:  Manufacturing conference call today.   I enjoyed this call as IDC highlighted the key 2012 trends within the Manufacturing Industry.

This was a global predictions call and was focused broadly on manufacturing industry wide predictions.  The IDC Manufacturing Insights team has scheduled other prediction calls going into more detail on topics like Supply Chain and Product Lifecycle Management.  There are also other calls coming up that focus on manufacturing related predictions in both Europe and Asia.   

Leading this conference call was the IDC Manufacturing Insights team of Joe Barkai (Vice President), Simon Ellis (Practice Director), Kimberly Knickle (Practice Director), Pierfrancesco Manenti (Head – EMEA), and Bob Parker (Group Vice President)

Summary

In 2012, the industry could be characterized as having cautious optimism.  Manufacturing is recovering but business will never be the same.  IDC showed spending forecasts for all major sub-industries with manufacturing and all industries show growth with the consumer oriented industries showing the most growth. 

The Ten Predictions

The 2012 predictions list below was sourced from the conference call slides.

  1. ‘Engaged’ Organizations. “Success in the intelligent economy will be achieved through “engaged” organizations”.
  2. ‘Four Forces’. “IT organizations will make foundational investments in the “four forces” that deliver both IT productivity and business value”  (note:  IDC says the four forces are Mobility, Big Data, Cloud, and Social Business)
  3. Supply Chain Alignment. “Manufacturers Focus on Clock-Speed Alignment across the Supply and Demand Sides of their Supply Chains”
  4. IT Support of Supply Chain. “The Requirement for Speed and the Ubiquity of Information Creates a New Landscape for IT Support of the Supply Chain”
  5. Lean Innovation. “Manufacturers Adopt Lean Innovation Throughout the Product Lifecycle”
  6. Product Lifecycle Visibility. “Greater Visibility and Deeper Understanding of All Aspects of Product Lifecycle Enable Context for Innovation”
  7. Factory of the Future: Capabilities.  “The Factory of the Future will be Driven by Capabilities to Fulfill Customer Demand Rather than Pure Production Capacity”
  8. Factory of the Future: Operations. “The Factory of the Future will Require a New Approach to Operations Applications”
  9. Culture of Learning. “Engaged Manufacturers Look Ahead by Creating a Culture of Learning”
  10. Sustainability. “Manufacturers Shine Environmental Sustainability Spotlight on the Factory as a Means of Getting to the Product”

For More Information

JWT: 10 Consumer Trends For 2012

A recent JWT press release 10 Trends That Will Shape Our World in 2012 caught my eye.  The press release announced the publication of JWT’s seventh annual forecast of key trends that will impact consumer decision making and purchase behavior.

This is a good annual list to take a look at for those in the B2C world.  Consumer behavior is shifting constantly and it’s important to understand why, how, and where those shifts are happening.

To research and develop it’s top ten list, JWT uses data gathered via quantitative surveys of consumers in the U.S. and U.K. as well as input from JWT employees, clients, and other influencers across a number of industries.

JWT’s Top Ten Trends:  Themes uncovered in the survey data include uncertainty about the economic future, the ongoing drumbeat of new technology in our lives, and and a new theme of shared responsibility with a focus on making better food purchase decisions.

Here’s my summary of the ten trends on JWT’s list…

  1. Navigating the New Normal:  Continued economic conditions force brands to develop new entry points for cost-sensitive consumers.
  2. Live a Little:  Overstressed consumers look to splurge once in a while or at least escape from the many worries of the day.
  3. Generation Go:  Enabled by technology, twentysomethings grow up and transform themselves, with many of them starting their own business
  4. The Rise of Shared Value:  Increasingly, some corporations are deciding that making a profit and being socially responsible can be achieved at the same time.
  5. Food as the New Eco-Issue:  The environmental impact of our food choices will become a more prominent concern.
  6. Marriage Optional:  Increasingly, women are taking an alternate life route, one that doesn’t include marriage as an essential checkpoint.
  7. Reengineering Randomness:  Greater emphasis will be placed on reintroducing randomness, discovery, inspiration and different points of view into our worlds.
  8. Screened Interactions:  Consumers are increasingly expecting to interact (touch, gesture, speech) with flat screens and surfaces
  9. Celebrating Aging:  Medical and cultural advances help seniors redefine what it means to grow old.
  10. Objectifying Objects:  Technology increasingly gets 1) embedded in all sorts of objects and 2) enables the creation of totally new products and services

For More Information

A Primer on 3-D Printing: An Emerging Technology You Should Know About

A few days ago, the first 3-d printed airplane flew for the first time.  See the LA Times article “World’s first 3-D printed airplane takes to the skies”.

Although 3D printing has been around for a number of decades, the quality has increased dramatically in recent years and the prices are just beginning to drop, making it much more affordable for small and medium businesses.  And if you really want to explore 3D printing, they are even getting cheap enough for consumers to own.

The reality is 3D printing is a very cost-effective way to have an in-house rapid prototyping capability.  For a relatively modest investment, design engineers can use a 3D printer to catch design flaws earlier in the process lowering costs and shortening design cycles.

What is 3D Printing?

3D printing involves having the computer sending the coordinates for a 3D object to an output device (a 3D Printer) that employs the same ink-jet printer principle that is used to print on paper.  However, in this case the ‘printer’ deposits successive layers of material to build up a full-scale 3D model.   The material used can be powder, plastics, resins or even metals.

In the case of powder, the printer is actually delivering ultra-thin layers of powder onto a surface, one on top of another, until it produces a 3D model.  With each successive run of the ‘printer head’, the powder that is deposited is then given a spray of a binding liquid that' helps to harden the powder and help form a solid object.

The end-result of this process might be a model which designers can use to verify a product’s design qualities before full-scale manufacturing begins, or it might be an end-use specialty product ranging from a component in a complex aircraft engine to a consumer medical  or dental implant.

The big benefits of 3D printing is it’s low cost and speed.  The printers can generally produce models in as little as one-tenth the time it takes other types of machines.  3-D Printer-produced models are throwaway models that allow you to see things you would not be able to see as well on a computer with a CAD system.  The beauty of this approach is people can hold the proposed design, study it, and get a good feel for its shape.

Video Introduction to 3D-Printing

The video below (about 4 minutes) provides an introduction to 3-D printing.

 

 

Implications for Traditional Manufacturing

It is doubtful that this new generation of 3D printers can replace traditional manufacturing methods such as injection molding, machined or milled parts and manufacturing line assembly.  However I do believe that small and medium specialty manufactures should consider implementing 3D printing processes for individual steps or subsystems in a traditional line manufacturing process.  It is very possible that these new low cost printers would help reduce overall manufacturing costs.

Implications for Consumers

Many people in the 3-d printing industry fully believe every household will have a device that’s capable of printing any solid object, and even basic mechanical objects.  Imagine pressing the “bowl” or “cup” button on the 3D printer in the kitchen, followed by the “fork” or “spoon” button. It would even work for larger objects like cutting boards and colanders and laundry baskets — and it would be easy enough to provide fairly extensive customization, too: a stripy cup, with colors of your choosing, a narrower fork, a bowl that is perfectly tapered to support and grip an unwieldy watermelon, and so on.

Implications for Healthcare

Experts also see a bright future for 3D printing in the medical industry.  3D printing technology is currently being studied by biotechnology firms and academia for possible use in tissue engineering applications where organs and body parts are built using inkjet techniques. Layers of living cells are deposited onto a gel medium and slowly built up to form three dimensional structures.  Future applications include Organ printing, bio-printing, computer-aided tissue engineering.  

Vendors

For those of you wanting to learn more about products and services out on the market, here are a few vendor sites to visit

  • Desktop Factory  Makes a very small and affordable printers that truly fit on top of a desk.
  • 3D Systems   Provides mid-range solutions that employ a technology that film transfers photopolymer to build 3-D objects
  • Z Corp  Is widely thought of as providing top of the line printers for an office environment
  • MakerBot, an entry level machine, has sold more than 4,000 so far.
  • Ultimaker, a new entrant into personal 3-d printing

For More Information

Fourteen Social Media Disasters: Learning from the mistakes of others

Social media can work wonders for your brand, but it can also spell disaster.   A colleague recently asked me for a list of examples of where the wrong post or tweet has damaged a brand’s reputation.  I had a few examples on the top of my head, but thought I would do some extra research on the side to see what else I could find.

After some research, I produced a deck titled “Social Media 101: Social Media Disasters”.  I’ve loaded the deck to Slideshare and have embedded it here:

Examples of bad social media can be tracked back to a focus on social media governance by companies. 

  • Lack of real-time monitoring
  • Not responding to customer concerns
  • Lack of corporate social media policies
  • Employees not trained in company policies
  • Lack of professional Social Media managers
  • Too much focus on self-promotion (lack of relationship building)
  • Lack of due diligence before launching social campaigns

We can all learn from these mistakes.

  • Having a social media presence that represents your brand means responding quickly and directly.
  • You need to plan for the worst while expecting the best.
  • A professional and responsible manager should be in charge of all communication on the various sites and this person should be very well versed on the many risks of social media.
  • All employees are potential spokesmen for your brand. They (including executives) should be trained in the basics of good and bad social media communications.

There is a risk to participating in social media, just like there is a risk with any other channel or method used for external communications.  Smart companies acknowledge that risk, but have focused on limiting that risk by hiring professional social media managers on staff, putting in place proper social media guidelines, and ensuring that employee and management alike are trained in how to best represent the brand when participating in social media.

Growth Oriented Companies Pay Attention To Customer Goals

A few weeks ago I attended a 2 day conference jointly organized by the Kellogg Graduate School of Management (at Northwestern University) and the Marketing Science Institute.  The conference was titled Realizing Opportunities for Profitable Growth.  

It was a fantastic conference for me.  The agenda was packed with excellent presenters, I met many interesting people, and I felt like I was back at graduate school on the Kellogg GSM campus, my alma matar.   It was especially great to see one of my favorite professors, Professor Greg Carpenter, again.

I’ve had a busy couple of weeks since the conference so I am just getting around to organizing my notes from the conference.   Over the next few posts I plan on summarizing those notes and providing the most important nuggets of learning to you.

The first topic area discussed at the conference was how companies can go about the task of developing better strategies to achieve growth in a competitive marketplace. 

An obstacle to growth for many maturing customers is how they currently think about their customers.  Many companies can't grow a mature product until they put aside their traditional thinking about how and why their customers buy.  Many companies in mature markets have blinders on and have hard fast assumptions about their customers.  For example, they think that their customers have the following purchasing behaviors

  • Lower price is better
  • Buyers choose rationally
  • Buyers know what they want
  • More choice is better
  • Information improves choice

Growth companies tend to throw out those assumptions and ask: How can we think differently about our customers?   Companies that do a good job of developing competitive growth strategies in maturing product categories know that it requires a deep understanding of what customers value. 

To understand what customers value, we must understand how customers set goals…for goals are what drive customer decisions.  Goals are desired future states of being.  Customers set goals because they have ambitions about the future.   They set both short term and long term goals.   The goals drive customer wants, needs, and purchase behaviors. 

There are, of course, different types of goals, but from a marketing perspective, there are three important types of goals that customers have that impact purchasing decisions.  

  1. Emotional goals
  2. Functional goals
  3. Economic goals

Most goals are set high and are somewhat difficult to achieve.  So by the mere process of setting goals, customers are also creating problems that need to solved if they are to achieve the goals.   Thus goal setting quickly turns into a process of learning what problems they need to solve and then coming up with action plans to solve those problems.   As a result, customers place a high value on products and services that can solve their problems. 

Growth oriented companies who pay attention to their customer’s goals and help position products to help solve problems, can grow, even in mature product categories.  They can do this by helping shape how customers learn how to solve problems.

As they go about solving problems, customers seek knowledge.   All customers have a process for how they go about learning how to solve problems, and eventually, making decisions.  Based on learning activities they choose participate in customers form their own sense of reality.   Growth oriented companies develop marketing strategies that are designed to influence what and how the customers learn …and therefore impact customer’s perception of reality.

Growth companies look to create new learning paradigms around maturing products by innovating uniqueness in their products.   By innovating uniqueness into maturing products, growth companies cause customers to seek more knowledge.  But you also need to keep things simple as customers need to know just enough information to solve their problems…not much more than that.

It is also worth noting that customers have an unlimited supply of goals.  As goals are achieved, new goals are created.  So this leads to a unlimited supply of problems customers must solve. 

As I said above, look for a few additional posts in the near future summarizing some of the other key thoughts from the conference.

Thanks to the Marketing Science Institute for putting on such a great conference!!

IDC: Worldwide SMB Market Top 10 Predictions 2010

IDC SMB 2010 Predictions I attended IDC’s Worldwide SMB Market Top 10 Predictions 2010 conference call today.  The call was led by Raymond Boggs, Vice President, Small/Medium Business and Home Office Research, but included a long list of analysts from IDC’s Small Business team.

IDC predicts that while SMB IT spending will recover, the impact of the recession will linger, impacting spending.  The conference call provided insights into how SMB spending on IT is changing by company size, by geography, and by technology.

Here’s a summary of the top predictions as presented on the conference call.

  1. IT Spending Recovers, But Not Enough To Make Up For 2009 Decline:  IDC forecasts SMB IT spending will grow 3.7% over 2009 (decline in 2009 was 4.3%).  Total IT spending by SMB will reach  $509.6 billion in 2010.
  2. Developed Regions:  SMB spending recovery will be more modest in developed regions.
  3. Developing Regions:  IDC forecasts that we’ll see more dramatic SMB spending gains in developing regions, including CEMA at +9.9%, Asia/Pacific (excluding Japan) at +7.3%, and Latin America at +7.1%. 
  4. Mid-Sized Firms:  IDC says that IT spending growth in mid-sized firms will outpace spending in smaller firms. .
  5. IT Spending Categories:  IDC says all IT spending categories will benefit from the increased SMB spending in 2010.  IDC expects services, software, and PCs/peripherals will benefit most, with 3-4% gains.
  6. Workforce Productivity:  IDC expects growth in spending for productivity tools to support remote workers and mobile employees.
  7. Cloud Computing and Software-as-a-Service: IDC says spending for Cloud and SaaS will gain traction in 2010, especially among medium-sized businesses. .
  8. Social Media:   IDC predicts that the use of social media will rise as SMBs figure out how to use it to reach new customers and learn about new technology.
  9. Focus on Innovative Solutions with Near-Term Benefits:  IDC says SMBs will be looking for alternative approaches to solutions and productivity tools that can provide near term benefits.  Social computing, mobility, personal storage, advanced networks, Cloud computing and SaaS all can add new productivity capabilities to SMBs, but SMBs will be looking to implement those solutions that can provide quick benefits.
  10. IT Infrastructure:  IDC expects that SMBs will continue to focus on building infrastructure capabilities (storage, security, and network resources) in order to support initiatives.

I have a big place in my heart for SMBs as that is the market where I ‘cut my teeth’ in the early 80’s when I joined IBM as a S/34 Systems Engineer and worked later as a Sales Rep.  Back then there were many, many SMBs that I called on that did not even have a computer in house.  Getting some of them to install GLAPPR and BICSARSA applications was a major sales effort.  There’s no question that the market for selling and servicing SMB organizations has totally changed since the early 80’s!!

For more information:

  • You can listen access a replay of the conference call Worldwide SMB Predictions 2010
  • Watch the IDC website for the release of the document Worldwide SMB 2010 Top 10 Predictions: Challenging Economy Will Sharpen Technology Focus on Near-Term Productivity Gains
  • Check out the SMB IDC website “Solving the SMB Puzzle

Midsize Companies Must Work Smarter, Leaner

A new IBM-sponsored study, “Inside the Midmarket: A 2009 Perspective”, found that although the economy is driving midsize companies to work smarter and leaner, many of these midsized companies are not actually decreasing their investments in IT, but maintaining current levels or increasing their IT spend to focus on strategic areas.

There is no doubt in my mind that these midmarket companies will play an important role in re-energizing the economy.  It is refreshing to see that these companies are not only resilient, but they are willing to invest in emerging technology areas that will position their companies for growth when the economy does improve.  

The study identified five important trends for midsized businesses:

  1. The highest-priority technology solution, chosen by 75 percent of respondents, is Information Management, which turns mountains of data into meaningful insights.
  2. The most pressing business challenges include increasing efficiency and productivity (80 percent), improving customer care (74 percent) and better use of information (72 percent).
  3. The impact of the economy on IT budgets has caused 53 percent to actually increase or re-prioritize their spending, with 37 percent reporting a decrease.
  4. Despite the economy, more than two-thirds of those surveyed are planning or currently implementing their top IT priorities.
  5. A majority of firms view their primary IT provider as a technology advisor or IT and business consultant, with 25 percent seeing the relationship as purely transactional.

And despite pressure to cut costs, the survey found that midsize companies are proceeding with IT investments in emerging technologies in areas such as information management, social media, and cloud computing.    Although these areas showed up lower on the scale of critical priorities, midmarket companies are actively pursuing these emerging technology areas to improve performance.  The survey shows that 79 percent intend to implement or have established goals to implement Green IT solutions, while 71 percent said they have plans to implement Web2.0/social media solutions and 69 percent said the same for cloud computing solutions.

IBM_Midmarket_Trend_Study

The “Inside the Midmarket study” was based on an online survey of 1,879 respondents in 17 countries, is designed to gain insight into the business plans and challenges, growth/innovation strategies, IT purchasing trends, and industry-specific pain points of midmarket companies (100 – 999 employees).  To download the study, visit http://www.ibm.com/press/attachments/ibm_midmarket_trend_study.pdf

eWeek: Five SMB/Midmarket Tech Trends to Watch in 2009

eWeek has weighed in with their annual list of top SMB / MidMarket IT trends to watch in 2009.  With IT budgets expected to be tight this year, eWeek says that small business owners must make wise investments in order to stay competitive.   And because of the focus on cutting costs and managing budgets, eWeek says that technologies such as cloud computing, virtualization and the latest notebooks/netbooks can be well suited for midmarket companies.

  1. Cloud Computing.  eWeek says cloud computing will continue to get traction, especially in the SMB marketplace.  
  2. Virtualization.   eWeek says because of the potential for cost savings, virtualization will be a key trend in 2009 for SMBs.  Plus, eWeek says, building a virtual infrastructure can often result in a higher availability of resources, better desktop management, increased security and improved disaster recovery processes.   
  3. Notebook/Netbook Adoption.  The attractiveness of notebooks and their smaller, less powerful cousins, netbooks, has grown as features such as battery life and structural durability has improved…making this a trend to watch in 2009.   
  4. Open Source Software.  While open source certainly hasn't become a dominant force in the midmarket space, as more SMBs adopt open source technologies for non-critical applications, it is likely others, particularly tech-savvy small business owners, will realize the cost benefit potential of open source technology.
  5. Online Social Networking.  eWeek says social networking has the potential to level the playing field for SMBs in a big way, but first need to understand what you want social media to do for your company.

Cloud computing is a trend I have been following for over a year and I'd have to agree that we will see increased interest from SMBs for not only SaaS, but Infrastructure as a Service as well.

The netbook trend is getting increased attention in the press.  It will be interesting to see how the mobile device market and the netbook market morph over time.

Online social networking is a trend that I think will get even more hype in 2009 as the focus moves from consumer (e.g. Facebook) related social networking to business (e.g. LinkedIn) related social networking.  With layoffs in the picture for 2009, people will be staying in touch even more via social networking sites.

To read the full article, go to the eWeek page:  Five Tech Trends to Watch in 2009