Industry overview
High tech companies are transitioning towards a more sustainable and circular approach, stepping away from the outdated "take, make, waste" model to embrace eco-friendly practices. According to the U.S. Bureau of Labor Statistics, STEM occupations are set to grow by 8% by 2029, significantly outpacing the average. However, a forecasted shortage indicates that millions of these jobs may remain unfilled, highlighting a critical need for talent in over 3.5 million positions by 2025. In the high-tech sector, building trust in products means ensuring they can adapt to evolving privacy and security regulations, safeguarding user data and rights. For high tech companies, maintaining trust in complex, multi-tiered, and multi-vendor supply chains is essential. This involves ensuring product compliance, ethical labor practices, and the authenticity of components and firmware to prevent counterfeit and security breaches.
Companies adept at addressing these global trends and challenges are poised for success over the next decade, leveraging business model innovation, process enhancement, and a strong focus on customer and employee experiences.
4 major industry trends
Consumption-based business model
High tech companies are shifting towards becoming outcome providers, starting by transforming into solution providers. This transformation involves offering customers a combination of hardware, software, and services as a bundled solution. By leveraging extensive data gathered from sensors for rapid analysis, these companies can monitor the solution's performance effectively.
Expanding their analytics capabilities will further enable them to utilize this data to comprehend the value delivered to customers, paving the way for subscription-based models. In this scenario, it's the high tech companies, not their customers, who bear the financial risk if the expected outcome isn't delivered. To facilitate this transformation, high tech companies will evolve their business models to support a consortium of solution providers. This consortium will supply the necessary hardware, software, and services to achieve the desired outcomes. Achieving this requires a collaborative partner ecosystem capable of operating within a unified marketplace.
Siloed data and processes. Single plant view
Integrated operations management
Developing a dynamic supply network
High tech companies are set to overhaul their internal supply chains by fostering connections among stakeholders and ensuring seamless integration from strategic planning to practical execution. This overhaul includes adopting either a product lifecycle costing approach within the entire design-to-manufacture process or initiating ongoing component price renegotiations, leveraging machine learning insights to benefit from the price depreciation prevalent in high-tech markets.
In parallel with internal changes, these companies will also transform their interactions with an expanding network of external partners. The shift will move away from traditional linear and bilateral collaboration models towards dynamic, real-time, and secure supply networks. Blockchain technology will play a pivotal role in these networks, offering reliable data on the origin and current location of goods. The transformation will be deemed complete once internal and external networks are fully aligned. This includes the broader adoption of technologies aimed at automating tasks that do not add value and utilizing software to analyze data and generate actionable options. Such advancements will enable planners to concentrate on making decisions critical to the business.
Siloed data and processes. Single plant view
Integrated operations management
Digital smart products
High tech companies will begin by enhancing their innovation workflows using a unified, intelligent platform for product innovation, alongside standardized processes that span across different departments. This approach will allow them to efficiently harness and analyze a burgeoning array of insights related to market trends, product usage, and decision-making processes.
Following this, they will be able to automatically initiate and evaluate engineering modifications, assessing their impact and seamlessly integrating these changes across manufacturing, supply chain, and service operations. The final step in this evolution involves shifting their portfolio management and design processes to proactively forecast future customer needs and the incorporation of upcoming technological developments. This strategic shift means that not only will the operational efficiency of existing products be maximized, but the design and development of new products will also be predominantly informed by in-depth analysis of usage patterns of both their own and competitors’ products, coupled with early recognition of technological innovations.
Siloed data and processes. Single plant view
Integrated operations management
Fostering deep customer connections
High tech companies will initiate their transformation by adopting a comprehensive omnichannel approach, ensuring that they can seamlessly cater to their customers regardless of how they choose to interact. This strategy will be enhanced through the integration of insights gathered from previously utilized and purchased solutions. They will delve deeper into analyzing the usage, customer feedback, productivity, and overall health of their solutions.
The next step involves fostering genuine collaboration with both their direct customers and the end users of their products, including smart devices, to offer a differentiated experience by providing everything as a service within a fully integrated relationship. The principles of Industry 4.0 will be pivotal in realizing these objectives, enhancing the reliability of products through close collaboration with customers and end users. This includes leveraging real-time operational feedback to refine and improve product development processes.
BILLION
Internet of Things devices by the year 2025
Of the top manufacturers will rely on digital platforms that enhance their investments in ecosystems and experiences
trillion
Value creation potential of manufacturers and suppliers implementing Industry 4.0 in 2025
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