Only Digital Manufacturing Can Create the Smart, Customized, On-Demand Products Consumers Want

April 30, 2018

By Vicki Holt

Consumers today want products that are smarter, more customized and available on demand. Companies and manufacturers must create a new business model that applies digital manufacturing strategies to iterate faster, customize more, reduce lead times and respond more quickly to market changes.

Ask someone to describe manufacturing today, and theyll probably describe giant machines operating in tandem along an assembly line putting together a product in vast quantities.

But as someone who works in manufacturing today, I can tell you that mass productionwhich has dominated how weve made things since the Industrial Revolutionis no longer the predominant manufacturing model.

Consumers today want products that are smarter, more customized and available on demand. The only way companies can satisfy this need is by creating a new business model that applies digital manufacturing strategies. Digital manufacturingwhich combines software with physical manufacturingcan help manufacturers iterate faster, customize more, reduce lead times and respond more quickly to market changes.

Consider how this plays out in two of todays biggest corporate challenges: shorter product life cycles and demands for greater customization.

Shorter product life cycles: We may not always need the latest and greatest technologies, but we want them. Studies have found that consumers replace about one-third of their home appliances with a better product even though the old appliance still works. And that number goes up to 60% for TVs.

Companies that want to be part of these purchase decisions need to have new products ready as quickly as users demand the latest model. Digital manufacturing makes it feasible for companies to quickly develop new products and get them to market faster than their competitors.

For example, front-end engineering is an essential part of new-product development, but it can be time consuming and costly. Digital manufacturing can help automate this process in ways that accelerate the design phase and take cost out for product developers.

When quoting custom parts, for instance, a digital model can reduce manual steps and the need for human interaction. And it can give companies critical design feedback within hours, instead of the days, weeks or even the months that traditional manufacturing suppliers can require.

Greater customization: Creating customized products is neither efficient nor cost effective with current mass production strategies. But digital manufacturing can help companies meet more targeted consumer and industry demands.

Consider drones as one example. A company may produce a variety of drone models for different applications, like tracking warehouse inventories, providing security surveillance and monitoring livestock. And each model may require slightly different hardware or systems. This, in turn, requires multiple short production runs to make each drone model.

With digital manufacturing, companies can use software to manage through production complexities. This makes high-mix, low-volume production runs for each drone model much more economical.

Companies can also use digital data sharing with contract manufacturers to quickly get parts, in the exact quantity they need. So, if an engineer needs 1,500 molded components, she can order that many. She doesnt need to place a financially risky minimum order (in the tens of thousands) as required by a traditional mass-production model.

New tools for a new world

Consumers want products that are smarter, more customized and available on demand. But consumer product, manufacturing companies and supply chain partners simply cant meet this demand using the same business model weve used for decades. Instead, we need to understand and apply digital manufacturing strategies and embrace new tools that streamline operations. This way we can stay better connected to our customers and suppliers and focus on innovation on our journey toward Industry 4.0.

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5 Technologies Disrupting the Supply Chain

Indian Manufacturing News

April 30, 2018

In many ways, the supply chain has always existed as a fluid, evolving system. It has a long history, and is also a necessary component of our modern economy. Although its easy for a supply chain manager to become accustomed to the nuances of the current supply chain, its wise not to get comfortablethere are plenty of major disruptions ahead.

  1. Blockchain

  2. Cryptocurrencies like Bitcoin have been gaining much attention over the past few years, but interest in these alternative monies exploded in 2017. Although the initial excitement of cryptocurrency has waned a bit, supply chain managers are beginning to realize the value in blockchain technology within the modern supply chain.

    With many blockchain testing programs wrapping up and entering their respective roll-out phases, supply chain managers will see a widespread shift toward blockchain-backed apps and systems in 2018.

    IBM announced a new partnership with Maersk in January 2018, which will implement a blockchain-backed electronic shipping system on an international scale. The system has the potential to cut billions of dollars in annual spending on behalf of the global shipping industry.

    A key selling point of blockchain is the indisputable recordcomplete with a timestampthat lets all parties verify transactions. Its a highly efficient means of tracking nearly all forms of datashipping information or otherwisein the digital age.

  3. Data analytics

  4. Data analytics play a major role in the modern supply chain. Real-time data processing and monitoring result in new tools for todays supply chain managerbut they have to know how to interpret them:

  • Supply assurance: One of the earliest and most impactful applications of real-time analytics is seen in supply assurance. Data analytics makes it easy to track production timelines and milestones, enforce safety and compliance standards, identify market patterns and more.
  • Product lifecycle management: The field of data analytics also affects product lifecycle management. Risk mitigation, process optimization and competitive intelligence are made easier via next-gen analytics.
  • Order visibility: Like blockchain technology, data analytics are useful for tracking and verifying transactions, too. Sensor data is easily tracked to determine a shipments exact location or even its current condition.

While the recent explosion of data is a boon for tech-savvy analysts, the amount of data makes it difficult to separate meaningful facts and statistics from useless or irrelevant information.

  • Transportation automation

  • Transportation planners are on the frontlines of the latest supply chain disruptionand theyre making significant progress in more ways than one. Although many think of autonomous vehicles when it comes to the next generation of transportation, supply chain managers have a myriad of applications for advanced robotics and automated systems:

    • Smart traffic management: The city of Nanjing, China recently introduced a traffic flow management system that incorporates real-time data as well as predictive analytics and forecasts to help travelers plan their routes on a day-to-day basis. Such a system is easily extrapolated to the supply chain by providing information on traffic delays, detours and even weather conditions.
    • Enhanced safety mechanisms: While some are concerned with the safety issues presented by autonomous and driverless vehicles, others focus on human drivers. New systems can estimate a drivers fatigue by monitoring various vital signs to help avoid accidents on the road.
    • Aerial drone delivery: Remote-controlled aerial drones are already popular among consumers, so it makes sense that theyre being considered for product deliveries and shipments. Amazon has already unveiled a proof-of-concept and demonstrated a potential delivery servicebut limitations in current-gen technologies mean these drones are only viable for local shipments.

    Most experts agree that we will see driverless and autonomous vehicles in the futurebut were not there yet. Until then, its important to focus on one of the strongest aspects of the supply chain: the human workforce.

  • Workforce technology

  • With growing concerns over increased automation and the potential for lost jobs, its critical that supply chain managers work with their teammates to instill a sense of trust and job security.

    It all starts with the initial recruitment phase. There is a proven strategy, a five-step process, which is incredibly helpful when it comes to finding and hiring the right candidates.

    But recruitment is only one part of the process. Its also crucial to retain quality employees and offer promotions and advancements as warranted. Modern solutions in workforce technology fill all of these duties and morebut there are some obstacles to overcome before all of the benefits can be realized.

  • 3-D printing

  • It wasnt long ago when the current generation of 3-D printers was seen as nothing more than niche products. The small size of the hardware, coupled with low quantities of raw materials, relegated these devices to custom products and small production runs.

    But times are changing. GE already has a plan to 3-D-print 40,000 jet fuel nozzles by 2020. Theyre so confident in the future of 3-D printing that theyve invested $1 billion into the technology in 2016 aloneand theyre planning to invest another $1 billion over the next few years.

    Other brandsfrom nearly every industry imaginableare also exploring 3-D printing. UPS is in the midst of launching more than 60 facilities across the United States to fulfill a new parts-on-demand printing service.

    Accommodating the evolving supply chain

    Breakthroughs like this arent just trying to disrupt the supply chaintheyre looking to revolutionize it. From the impending embrace of blockchain technology to the industrialization of next-gen 3-D printing, supply chain managers will have their hands full in the coming weeks, months and years.

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    Humana Creates Program to Reimburse Hospitals That Improve Quality

    Pharma & Healthcare Monitor Worldwide

    April 27, 2018

    Humana on April 25 unveiled its new program that will reimburse hospitals for improvement on quality measures related to patient safety, experience and outcomes.

    The hospital incentive program, which went into effect in January, is Humanas first value-based model that focuses exclusively on hospitals inpatient admissions. Humanas other value-based programs like the total joint replacement episode-of-care model focus on primary or specialty care.

    This is a natural extension of our other value-based models that are already out there, said Ben Lunsford, vice president of value-based strategies at Humana.

    The program is available to all general acute-care hospitals that contract with Humana. Several hospitals are currently enrolled in the program, but Humana declined to disclose the specific number.

    Humana will give participating hospitals annual payment rate increases based on how they perform on quality measures over a 12-month period compared to other hospitals in their region or nationally. The payment rate increase will vary for each hospital. Hospitals will not be penalized if they fail to improve on the measures under the program, Lunsford said.

    Humana has partnered with the Joint Commission for measures in the program regarding care coordination and palliative care. Hospitals will qualify as meeting performance standards for those measures if they receive integrated care certification and palliative care certification from the accreditor.

    The Joint Commission entered a similar partnership with Anthem in 2016. Hospitals that receive integrated care certification can be reimbursed as part of Anthems hospital incentive program. One hospital has currently achieved the certification, a Joint Commission spokeswoman said.

    Humana has created its own standards around palliative care and care coordination if a hospital doesnt want to pursue certification from the Joint Commission.

    Humanas program also uses 30-day risk adjusted readmissions rate, risk-adjusted length of stay, follow-up appointments after discharge and results from the hospital consumer assessment of healthcare providers and systems survey. Hospitals performance on four infections central line-associated bloodstream infections; catheter-associated urinary tract infections; Methicillin-resistant Staphylococcus aureus and C. difficile are used as well.

    Lunsford said Humana gathered insight from its clinical leaders to decide which measures to include in the program. We looked at best practices around quality, he said.

    Humana will give hospitals updates over the 12-month period about how they are doing on the quality measures in the program.

    Humanas new program is in line with a broader industry trend: Commercial insurers are heavily investing in value-based payment models because of the potential for cost savings. The top five commercial payers, which include Humana, have together announced an estimated 184 value-based payer-provider contracts as of August 2017, according to the Health Care Transformation Task Force.

    The challenge for commercial insurers that launch these value-based payment models is the ability to attract enough interest from physicians and hospitals to participate that they will actually make an impact, said Andrew Wilson, research team leader at the Altarum Center for Value in Health Care.

    Providers who participate in the new Humana program are likely only going to be ones that care for a large population of Humana members. If (Humana) is a smaller proportion of your patients, whats the benefit? Wilson said. The investment might not be worth it.

    Wilson also pointed out that the measures under Humanas program are broad and hospitalwide, which makes them more challenging to improve on. Finally, the hospitals arent on the hook financially if they dont improve on measures, which mitigates the impact of the program to improve quality of care.

    At the end of the day, lets be honest, theres no penalty, he said.

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    What You Should Know About Privacy That Will Help Consumers Trust Your Brand

    April 27, 2018

    By John Hall

    Eighty percent of consumers dont mind if brands use information theyve directly shared in order to better personalize messages, according to consumer intelligence platform Vision Critical. These findings from the companys survey, which consisted of 1,000 people in North America who had made an online purchase in the past year, were released last week.

    Despite a recent uptick in public distrust in institutions generally, Mark Zuckerbergs recent appearance on Capitol Hill, and a steady two-week public discussion on data and privacy, the number of consumers willing to trust companies with their data remains high. In fact, two-thirds of consumers would comfortably share personal informationprovided brands are open about its use.

    With every public violation of consumer trust, be it through misuse of data or external threats, consumers today are paying more attention to the data they share, what organizations they share it with, and how it will be used, said Scott Miller, CEO of Vision Critical.

    In conducting this study, it was confirmed that customers are willing to provide personal information in exchange for highly personalized experiences, as long as companies are willing to be transparent and direct about how they collect and use it. With this knowledge, brands should use thoughtful tactics when sourcing personal information, ensuring that there is an equal exchange of value for consumers and businesses alike.

    How can you use this survey data to your advantage? First, as a company, start looking at data differently.

    Be transparent

    What this survey and consumer habits over the past five years tell you is that people are willing to part with their information if they know where its going. Thats a natural cost-benefit analysis every consumer makes. Vision Critical found that 58% of people respond much better if content is personalized, and brands need data to personalize content experiences.

    Yet consumers, even over the past six months, have become much smarter about data. The reason they want to know exactly what youre doing with it comes down to recent breaches of public trust. The incidents at Equifax, Facebook, Target, and other companies have made people aware that their data can be stolen and used for less than desirable reasons.

    When people want to know what youre doing with their data, they simply want to make sure its secure and not going anywhere they wouldnt like it to go. The simpler and more transparent you can make that transaction with the consumer, the more brand loyalty you can create.

    And the best part is that unless your business solely operates on trafficking data, this is not difficult to do.

    Create immediate benefit

    Forty-one percent of respondents to Vision Criticals survey said they are willing to share personal information to get more personalized service, offers, and faster conflict resolution.

    Another way to calm concerns is to make the payoff for sharing data happen immediately. The studys most interesting finding is that people are willing to give up data to get out of dealing with customer service. And if you think about it, that makes sense.

    I would gladly give up certain data about myself if it meant my wait time was shorter or the company was then able to better serve my needs going forward. Thats a win for the consumerand one that you can demonstrate immediately. But if consumers share data and dont see anything happen differently as a result, they may start to wonder why they did that or may be less likely to share next time.

    Get feedback

    The most important point for a company may be understanding where the line is for consumers. Dont be afraid to use a consumer intelligence platform to get insights about what data your customers would or would not be willing to share. This can help you better devise plans to create immediate benefits and be transparent about data use.

    Ultimately, Facebook and other companies that have had data breaches will be fine. The vast majority of users understand the trade-off for using free public communication tools.

    Where they will be less forgiving is if you lose their data, it falls into the wrong hands, and they suddenly get a credit card bill for five days and four nights in Acapulco. Even if the actual possibility of that happening is super-slim (considering how credit card companies monitor their services), its not impossible, and its a real concern consumers have.

    If consumers accidentally get an ad for Catster in their email, no big deal. The most interesting new development in this areaand the place where companies should get the most feedbackis voice-driven AI. Its unclear whether people are willing to ask Alexa about something and then see an ad for it on their phone four hours later. Personally, Im fine with it. But that will be the next debate between benefit and intrusion.

    The bottom line? Stay on top of this, be transparent, and ask for constant feedback from your customers, and youll still have access to plenty of data.

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