Industrial Products

Global industry agenda


Industrial product providers with the insights to understand the future will be the ones who shape it.

Rapidly changing customer expectations, ecosystem collaboration and new technologies are defining the industrial product industry’s future, and straining legacy systems and models. Success in the industry of tomorrow demands market innovation, a sound transformation strategy and differentiated implementation.

Disruptive forces

Powerful global forces outside the control of any one company are compelling rapid change for producers, organizers and providers.


Digital technologies

Redefining possibilities in the industry, digital technologies will compound disruption and have hyper-exponential impact.


AI icon

Artificial intelligence and analytics

AI icon

Artificial intelligence and analytics

  • Supports staff to make decisions
  • Identifies business-critical operational improvements

Robotics icon

Automation and advanced robotics

Robotics icon

Automation and advanced robotics

  • Enhances productivity by working autonomously or in conjunction with staff
  • Increases worker safety

Additive mfg icon

Additive manufacturing

Additive mfg icon

Additive manufacturing

  • Creates new, more efficient products
  • Slashes manufacturing processes

Cloud icon

Cloud

Cloud icon

Cloud

  • Allows data to be stored and accessed, and applications to run remotely
  • Delivers cost-effective innovation quickly

Blockchain icon

Blockchain

Blockchain icon

Blockchain

  • Improves identity management and distribution
  • Enables transformational business model innovations

IoT icon

Internet of Things

IoT icon

Internet of Things

  • Equips physical assets with digital data
  • Optimizes existing operational processes

Cybersecurity icon

Cybersecurity

cybersecurity icon

Cybersecurity

  • Embeds safeguards into systems
  • Surfaces threats

Mobile icon

Mobile

Mobile icon

Mobile

  • Connects people with access to insights anywhere
  • Enables ongoing status updates and decision making

APIs icon

APIs and microservices

APIs icon

APIs and microservices

  • Rapidly creates new applications
  • Enables ecosystem partners to collectively innovate

Emerging consequences

Each manifestation of disruptive forces has the ability to shape a new future and affect the customer, the enterprise and the market.



Number 1 graphic

Customer impacts

Customers demand better
experiences, products and services

Customers demand better experiences, products and services


  • Buyer expectations are not being met
    Based on the average Net Promoter Score (likeliness to recommend), the quality of service of B2B firms is well below the threshold for what clients consider satisfactory, much less excellent. 1

  • Customers are not brand loyal
    B2B customers don’t stay loyal to a brand when expectations aren’t completely met. 2

  • Buyers want a better buying experience
    70% of manufacturers’ customers have high expectations today from their buying process experiences, 62% want a more convenient buying process and 58% expect a digital experience. 3

    81% of B2B buyers said they would choose a supplier that offers a consumer-like experience over an equally priced alternative that does not. 4


Number 4 graphic

Enterprise impacts

Customer-centricity requires enterprises to rethink their operations and organization

Customer-centricity requires enterprises to
rethink their operations and organization


  • Companies center their strategies on the customer
    KONE has entered a strategic phase for 2017-2020 called "Winning with Customers“ to drive differentiation by putting customer needs at the center of development. 13

  • Companies align operations around the customer
    CEMEX has launched CEMEX Go to provide a seamless experience for order placement and live tracking of shipments. 14

    CEMEX offers a suite of customer-centered, made-for-business mobile apps, providing workers with real-time collaboration and engagement. 15

    Metso uses visual sensors to enable clients to monitor bubbles in steel productions, which affects the quality of final product. 16

  • Companies reorganize to focus on the customer
    Caterpillar has changed the structure of its customer and dealer-facing divisions to be more customer-centric. The company’s Global Aftermarket Solutions Division focuses on aftermarket sales and service solutions and its Wear Components & Aftermarket Distribution Division emphasizes components availability and inventory improvements. 17


Number 7 graphic

Market impacts

The emergence of disruptors increases the competitive playing field

The emergence of disruptors increases the competitive playing field


  • New platforms connect the industry
    Kloeckner Connect is a digital platform with cloud-based applications that serve customers with real-time data, such as inventory levels, historical data and forecasting. 28   29

  • New materials and manufacturing change offerings
    Spiber is leading a shift in global materials manufacturing by using technology to improve DNA designs. The company has partnered with Kojima Industries, a supplier to Toyota, to supply artificial spider silk that will make cars lighter, more durable and more resistant to shocks. 30

    Plethora is a fully vertically integrated manufacturing startup. Plethora employs advanced 3D printers, robots and traditional milling machines to contract manufacture quickly and cheaply. Users send Plethora CAD files of what they need made and the company manufactures the parts as soon as the following day. 31   32

Number 2 graphic

Data monetization enables customer intimacy
and new revenue models

Data monetization enables customer intimacy and new revenue models

  • Data from sensors allows companies to reduce downtime, improve maintenance efficiency and enhance predictive maintenance
    AngloAmerican is focused on a smart, connected, learning mine with predictive, condition-based monitoring and maintenance. 5

    Caterpillar has partnered with Uptake to build a platform for predictive diagnostics to help customers monitor and optimize their fleets. 6

    Komatsu provides a system that incorporates sensors and GPS into its products to provide real-time utilization, maintenance and fuel consumption information. 7

  • Market data is used to manage volatile commodity prices
    For Reliance Steel, successful execution is helping to monetize macro trends on demand, and keeping track of commodity price data is helping the company improve pricing. 8
Number 5 graphic

Enterprises shift from products to services for customer lifetime value

Enterprises shift from products to services for customer lifetime value


  • Companies address their customer base
    Through its “Across the Table” program, CAT works to improve its dealer performance and collaboration – a vital component of customer satisfaction and revenue generation. 18
  • Companies add services
    Rockwell Automation has a parts management agreement for its machine and equipment spare parts. Customers have online access to spare parts, while Rockwell Automation owns and manages the inventory for a fixed fee. 19

    IDC estimates by 2017, 30% of mining companies and their major OEM partners will utilize cloud to access and manage equipment data and improve maintenance practices. 20

    Rio Tinto’s Mine of the Future program aims to equip frontline employees with intelligent tools, helping them make decisions that improve performance based on contextual knowledge. 21

Number 8 graphic

The growth of shared economy offers flexibility and efficiency

AThe growth of shared economy offers flexibility and efficiency


  • Shared intellectual property increases manufacturing efficiency
    NOVO Optimized is a set of digital tools that provides near-real-time guidance to customers on how to set machines and tools for maximum efficiency and output. The NOVO company brings users into a community, harnessing expertise and providing fast access to best-in-class process knowledge. 33   34

  • Shared data improves efficiency
    MachiningCloud is an industry platform that provides catalogue, best practices and marketplace capabilities for cutting tool manufacturers. Pricing, availability, quoting and purchasing functions, in addition to product information and integrated guidance applications, help improve shop floor worker productivity and time savings. 35

Number 3 graphic

Increased demand for pay-as-you-go services drives asset usage

Increased demand for pay-as-you-go services drives asset usage

Peer-to-peer rentals have expanded

    • Caterpillar acquires Yard Club, a marketplace for construction equipment. Yard Club has worked with the dealers in the Caterpillar network and helped rent equipment to contractors and construction crews. Yard Club processed USD 120 million in transactions across 2,500 contractors and rental companies in 2016. 9

    • Hilti offers Tool Fleet Management, which allows customers to access power tools at a fixed monthly rate for a defined period. Hilti also helps track, repair, replace and upgrade tools at no additional cost. 10

    • AnyQuip is Canada's peer-to-peer equipment rental network. Companies connect on AnyQuip to get underutilized heavy equipment. Owners can earn revenue on their idle equipment, and renters can find equipment at lower rates. 11

    • Dozr facilitates the short- and long-term rental of heavy equipment across Canada and the eastern United States. The DOZR platform enables business owners to earn additional revenue from their idle equipment and allows contractors to rent equipment at lower rates than traditional rental companies. 12
Number 6 graphic

Emphasis on continuous innovation drives excellence

Emphasis on continuous innovation drives excellence


  • Innovation is top of mind
    51% of industrial products executives cite increasing innovation as a top business initiative. 22
  • Companies apply new techniques for innovation
    Unearthed organizes open accelerator programs to generate innovations for the mining industry and has engaged 2,000 industry experts to formulate new solutions. 23

    A major aluminum producer is using cognitive computing to discover new materials. 24

    AGCO brings cognitive capabilities to farming. 25

    Lafarge pursues solar energy cement manufacturing. 26

    John Deere offers Precision Ag Technology, which leverages information about soil conditions, water and equipment to help farmers. 27
Number 9 graphic

The end-to-end value chain transforms given ecosystem networks and platforms

The end-to-end value chain transforms given ecosystem networks and platforms


  • Ecosystems and partnerships improve customer intimacy and distribution
    By 2020, 60% of G2000 manufacturers will rely on digital platforms that enhance their investments in ecosystems and experiences, and support as much as 30% of overall revenue. 36

    BuildTraders is using e-commerce to coordinate the USD 150 billion unorganized construction industry across India. 37

  • The linkage of suppliers and customers enhances the supply chain
    By 2020, 80% of supply chain interactions will happen across cloud-based commerce networks, improving participants’ resiliency and reducing the impact of supply disruptions. 38

    BHP Billiton will use blockchain to record movements of wellbore rock and fluid samples, and better secure the real-time data generated during delivery. 39

    Schneider Electric’s Integrated Planning and Optimization Solution (IPOS) is designed to optimize supply chain efficiency for mining companies. 40

Pressing challenges

Acknowledge and act upon industry challenges
in the near term to stay competitive.


Sustain profitable business

Learn more

Sustain profitable business


  • Careful management of product mix and capacity utilization helps maximize profit
  • Use of exponential technologies helps create seamless operations and an integrated customer-driven value chain
  • New innovative and sustainable products and solutions are expected to be prerequisites for success

Become a customer partner of choice to avoid disintermediation

Learn more

Become a customer partner of choice to avoid disintermediation


  • Advanced analytics are increasingly required to tailor customer experiences and maintain relevance

  • Expansion from products to services and outcomes is predicted to accelerate

  • New distribution models are enabling customers to buy from their desired channels

Pivot to intelligence-based decision making and knowledge

Learn more

Pivot to intelligence-based decision making and knowledge


  • Shift from gut feeling to insights is expected to be a critical enabler for riding the market

  • Data ownership and monetization are projected to be a foundation for competitive advantage

  • Augmented intelligence is expected to distribute expertise and capture intellectual property

Transformational opportunities

Technology-enabled opportunities empower your organization to address pressing challenges and compete in the marketplace.


Drive manufacturing excellence and value chain efficiency in profound ways


Learn more

Drive manufacturing excellence and value chain efficiency in profound ways


Adopt Industry 4.0 principles to create highly flexible and safe operations across the integrated value chain

Implement autonomous operations, powered by AI and other technologies across the value chain, with minimal human intervention

Remove variability, uncertainty and value deconstruction – and never make the same mistake again

Go on the offensive – drive the disruption to exceed customer expectations and create new revenue streams

Learn more

Go on the offensive – drive the disruption to exceed customer expectations and create new revenue streams


Be the disruptor by leveraging your data and industry expertise to create new business models

Digitally enable your experiences for customers, clients and colleagues, and be the first mover to orchestrate new ecosystems to create new revenue streams

Create the next generation of easy-to-use smart industrial products and services

Create a learning organization through AI to drive continual innovation


Learn more

Create a learning organization through AI to drive continual innovation


Capitalize on your data to anticipate customer needs and provide personalized customer experiences

Exploit AI and man-machine collaboration to augment expertise, reducing time required for inexperienced workers to perform as experts

Adopt AI to create an environment that promotes learning and continuously challenges the status quo to drive innovation and attract talent

Start here to assess your readiness for
the future

Critical question 1

Customer experiences

  • How does your company find a way to surprise and delight customers?
  • What digital personalized experiences have you created for your customers?

Critical question 2

Ecosystem strategy

  • What are your distinctive assets – and just the “me too” ones?
  • How are you driving growth by partnering in digital ecosystems?

Critical question 3

Technology initiatives

  • What have you done to rethink operations and processes across your organization?
  • In what ways is your organization driving innovation to create new revenue streams?

Take action

Explore industrial products solutions

Discover how IBM's breakthrough technologies are transforming the industry with smarter ways to do business, new growth opportunities and strategies to compete and win.

Access more IBM Institute for Business Value industrial products research

Read business insights and recommendations in our library of industrial products thought leadership reports built on primary research and analysis.

Connect with industry experts

©2018 IBM Corporation
86019486USEN-00