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Manufacturing the Experience Economy with Digital Technology

It is being said that we are entering the Experience Economy where customers are most interested in building memories, rather than in owning products or receiving a service. Economists and pundits alike are noting this major change in the business world to be as significant as the changes from an agricultural economy to the industrial age and from the industrial age to the service economy, that the developed world has traveled over the last two centuries.

Whether or not you agree that the evolution of the experience economy is of that level of significance, it’s hard to deny that customer demands and expectations are changing and producers must respond to those changes quickly and appropriately or be left behind by more nimble competitors.

Customer service is more than just having the right product at the right place and time, with the right packaging, of good quality, and at the right price. The product, from the customer’s viewpoint (and what other viewpoint matters?) also includes the process and the relationship involved in buying the product including what occurs both before and after the actual purchase. Call that the buying experience. How easy is it to research your product and learn about its attributes and value? Was the buying process pleasant and efficient? How about installation, unpackaging or preparation for use? If the buyer has a question or a problem, was it easy to get information or support?

Companies are harnessing customer relationship management (CRM) software to gather and manage information to support smooth, pleasing interactions with customers and prospects throughout the sales and support process and beyond. Many CRM systems also support (or integrate with) knowledge management systems that drive internet self-service support as well as call center service efficiency. These technologies directly address the non-physical product part of the customer experience.

More products are incorporating an information element that adds to the “experience” element of everyday things. The essence of the Internet of Things (IoT) that you are reading so much about is the proliferation of Internet-connected sensors and smart devices everywhere in our lives and how that is changing the way we think about and use everyday objects. We are all aware of the computerization of the automobile and the rapidly approaching world of autonomous cars and trucks, of course, and most of us have heard about smart home appliances like a refrigerator that monitors when your gallon of milk is going bad or when you need more mustard – a dubious benefit, in my opinion. More strikingly, IoT technology is pervading small and common objects as well – sneakers that communicate with your fitness monitor, inexpensive toys that actually interact with your child, smart thermostats and lightbulbs that save energy and optimize your environment, tiny cameras and sensor everywhere, and much more. The point is that physical products are becoming hybrid digital products and physical product manufacturers are adding electronics and software to all kinds of products, enhancing the experience of owning and using the products.

Changing customer expectations always drive changes to products and the emerging experience economy is driving those changes in the direction of data and intelligence in places where it never existed before. In the process, product cycles continue to shrink and product proliferation (more products and variations at smaller quantities) continue to challenge manufacturing and distribution. Companies must be agile – able to change products quickly to respond to changing demand. Development lead times must be short, production must be flexible to accommodate short cycles and fast changeover. Distribution must be fast and efficient – you can’t be caught with large stocks of suddenly obsolete product in the distribution chain while missing the market for the next craze.

Digital manufacturing technology is the primary weapon for achieving these objectives. IoT-based supply chain visibility helps monitor demand trends and product performance in the field. The Digital Thread managing engineering information and product master data through the lifecycle reduces time-to-market and enhances product design and re-design efforts while improving quality and supporting manufacturing flexibility.

The successful manufacturers of tomorrow are building their digital manufacturing backbone today in engineering, in production, and in customer service.

This post was originally published By  Dave Turbide on the https://blogs.3ds.com/northamerica/manufacturing-experience-economy-digital-technology/and is being reposted here.