Enabling the Marketplace with Hyper-Personalization for Manufacturing

Traditionally, manufacturers have consisted of separated silos with each department gathering and storing its own data, without sharing it with any other department. This way of working is inefficient when faced with the outstanding efficiency and productivity offered by digital solutions including hyper-personalization, automation, and AI.

As manufacturers look for ways to increase their revenue and decrease their costs, they are increasingly finding that digitalization is the answer. This has led many to start to transform their operations, starting with the integration of resources across the organization.

So, what challenges are the manufacturing industry facing? How can digitalization, hyper-personalization and AI help? And what impact does this have on the marketplace?

Operational Challenges

As manufacturers push to become more efficient, the efforts of managers are being measured against KPIs that look at the agility of their organizations is and the optimization of its processes. This is driving the transformation of manufacturers from the traditional silo approach towards an integrated and digitalized organization.

When it comes to digitalization within the Benelux, manufacturers face three main types of challenges from an operational standpoint: customer-specific challenges, process concerns and IT and infrastructure issues.

Customer-Specific Challenges

Embedding customer needs in a manufacturer’s strategy can significantly improve decision making for both future organizational productivity and customer experience. Unfortunately, very few manufacturers in the Benelux have successfully achieved this. Furthermore, as the COVID-19 pandemic has increasingly driven customer interactions online, the lack of customer-centricity has become increasingly visible as organizations often seem to be uncertain as to who their actual end-customers are.

Process Concerns

Digital initiatives and processes implemented by manufacturers are often undertaken in isolation in a specific division or department without considering the possibility of harmonizing or integrating the initiative or process in the entire organization, which reduces the organization’s ability to be agile as the business situation changes. Furthermore, manufacturers often have a high level of administrative transactions, especially in the back office, which can be automated to increase efficiency and free up internal resources.

IT and Infrastructure Issues

Even though many organizations are looking how to digitalize, the digital maturity level of many manufacturers in the Benelux is low. This is often due to the entrenched silos found in many organizations and the uncertainty of top managers about how to start the integration and digital transformation.

A further complication is due to the fragmentation of existing legacy systems, as well as those inherited after a merger or acquisition. The data contained in all these systems needs to be evaluated to ensure that it is correct and usable before being connected so the data is accessible and transparent throughout the entire organization.

The Digital Transformation

Digital transformation is increasingly a top priority for manufacturers in the Benelux. However, for manufacturers to achieve the next level of digital maturity and integrate processes across the organization, management will need to use their view of the entire organization to implement a top-down approach to remove all internal silos, including those that surround individual production sites.

The drivers for digital transformation include challenges like competition from a new brand in the market, the desire to expand into a new target market, or disruptions such as competitors significantly changing their business model or delivery terms. In these situations, a digital transformation is the only way that the manufacturer can continue to compete.

In addition to the need for a top-down approach, there are several other questions that need to be answered for a successful digital transformation.

One Integrated Organization or Two?

Some organizations have already started their digital transformation towards Industry 4.0. However, these manufacturers frequently split the organization in two by implementing separate systems for the sales and marketing departments on one hand and for the manufacturing processes and supply chain on the other. To realize the full potential of digitalization, organizations need to integrate all departments and processes into a single system that encompasses the entire organization.

Who Owns your Data?

Within a traditional manufacturing organization, data is gathered, stored, and used by different departments, all working in isolated silos. As employees are unable to access the data from the entire organization, it is challenging for them to deliver a good, consistent customer experience.

This issue grows exponentially as the organization undergoes a digital transformation. The number of data sources and amount of data increases significantly because of the proliferation of IoT devices, new connections from legacy sources, and data gathered by different departments. Instead of each department being responsible for their own data, organizations need to identify one person or team to ‘own’ all data within the entire organization. While this initially falls under the responsibility of the Chief Information Officer, as the organization’s digital maturity grows, ownership is often transferred to the newly created role of Chief Data Officer.

Hyper-Personalization in a B2B2C Context

Manufacturers operate in a B2B environment, delivering goods that are used by other manufacturers or sold by retailers further down the supply chain, which makes it difficult to fully understand the end-customer of their products. This issue becomes more challenging when you consider the complexity of today’s supply chain where no single company owns or controls every aspect.

As mentioned before, as the COVID-19 pandemic has increasingly driven customer interactions online, the lack of customer-centricity has become increasingly visible as organizations often seem to be uncertain as to who their actual end-customers are. Hyper-personalization empowers manufacturers to move from a B2B to a B2B2C perspective, offering clear benefits.

Hyper-Personalization in Sales and Marketing

When it comes to sales and marketing, hyper-personalization can help manufacturers in three ways. Firstly, it optimizes the customer lifecycle value. Manufacturers need to have clear insights into what their customers want and desire, even if they don’t have direct connections through the market. This requires shifting from broadcasting marketing messages into a dialogue with the end-customers to uncover what they expect.

Secondly, hyper-personalization improves the customer experience. A satisfied customer is more likely to remain a customer, making every customer interaction important. One of the many options available here is to utilize AI in customer calls and give call agents guidance based on the intonation and emotions displayed by the customer.

Lastly, it expands the customer lifecycle from occasional customer through loyal purchaser to brand advocate. This requires bringing together customer lifetime value challenges, customer experience, and customer lifecycle challenges to achieve a successful outcome.

Hyper-Personalization in Production and the Supply Chain

Hyper-personalization can also make a difference for production and in the supply chain. To give a few examples, an organization can utilize data to optimize their capital investments to maximize productivity. Data can also be used in a digital twin (virtual representation of a product or factory plant) to model potential upgrades to manufacturing processes before they are put into production.

Additionally, combining an integrated digital solution with the data gathered to give a B2B2C perspective can assist manufacturers to predict and coordinate what their customers need and when they need it, which enables production optimization.

Hyper-Personalization as a Business Model

Manufacturers can use the data gathered by their digitalization strategies to adapt their business model. Instead of purely working within their organization, manufacturers can now share data and collaborate with other organizations in their ecosystem or supply chain, opening up new opportunities.

Hyper-personalization can further transform a manufacturer’s business model by selling the data they capture to other parties. For example, a car’s onboard computer captures information about the frequency and lengths of journeys, driving styles, preferred travel times, and more. This data is useful for city planners, car dealerships, public transport officials, environmental activists, public safety lobbyists, and many others.

Taking the Next Steps with Hyper-Personalization

As we have seen, when implementing a hyper-personalization strategy, manufacturers need to start at the top of their organization. Only when the C-suite fully understands and recognizes the strategic importance of data and the advantages of having accurate and connected data, can the organization benefit from increased efficiency, lower costs, and increased revenue.

Is your organization ready to benefit from hyper-personalization? Learn more about how AI can play an important role in staying relevant and seizing business opportunities in the future.