Transform the Future of Manufacturing from All Angles

Manufacturing

Dec 2

Case Study: A Digital Transformation Journey in the Manufacturing Industry

Introduction

This company undergoes a 15-years of digital transformation journey and has been set a higher bar for the rest to catch up. It aims at future development and not merely for the sake of digital transformation. It wants to establish an identity in the digital world and not a short-term investment with an immediate payoff in financial terms. By following the footsteps of their customers and sensing the minute changes in the construction ecosystem, new strategic options give rise to fruitful business opportunities and digital strategies.

Steps of Digital Transformation

1. Transformation Objectives. Any business issues encountered?

Digitalization is everywhere in the construction industry, and it was time for the company to leap from the digital optimization phase to a full digital transformation. In the optimization phase, the IT infrastructure has become diverse with silos in the enterprise. The demands and needs of the customers were continuous changing due to everchanging technology advancement. There were challenges in both sales and customer support in terms of inconsistent service quality and weakness in communications. The company was in need of ensuring the unified customer experiences around the world, and integration in the business processes.

2. Set Goals

Need to work closer to the customers since many decisions and changes are made long before construction begins
Need to allow flexibility within the operational processes and the enterprise structure to leverage the established digital potential
Set the goal of transformation for the sake of business opportunities
Reimagine business model, the IT organization, sales processes (decentralized), and enterprise-wide management structure

3. How to implement

Instead of just selling products, the company develop innovative products with software and service solutions for its customers
By following the needs of customers, the company found a new business model of leasing power tools with the creation of the new Fleet Management
The company offers e-procurement platforms to customers with capabilities like online ordering and custom procurement, and in which it integrates 50+ e-marketplaces and e-procurement platforms. As a result, it makes procurement transparency and efficient.
Create a digital training platform, Account Managers, to provide customer support and streamline sales processes, such as advice about specific products or solutions, tailor-made service, and test before buying

4. Technology Tools

By using RFID technology, the RFID chip is embedded in the tools, which allows for tracking its usage and its location. Customers can pay a monthly subscription fee to get tools on-demand instead of buying them.
Implement digital platforms, such as ON! TRACK (Asset Management), CONNECT app (tool maintenance), to streamline customers' needs and connect with all equipment and tools
Use NFC and Bluetooth technology to connect between a mobile app (the CONNECT app) to the NFC tag on the equipment
Offers BIM/CAD services, which give the customers the precise and detail 3D model of the item that you interested in. It includes the 2D/3D object library, which enhances the design efficiency when creating bills of materials and other needs.

NOTE

BIM - Building Information Modeling is a digital representation of the physical entity. It is like a complex content file that describes the process and structure of the construction. What is BIM? Understand Building Information Modeling

5. Process Review

Increase sales by 26 percent and its operating profit by 12.1 percent from the fleet management system alone during the global economic crisis of 2008-2009.

Increase productivity and profit in the construction business to minimize lost time in finding tools or track its location
Monthly performance reports on Key Performance Indicator (KPI), such as digital marketing, health and safety, CO2 emission, and quality assurance metrics

Digital Strategy Analysis

Digitization in the global construction industry has forced the company to renovate its business model. The advancement of technology has dramatically made many changes in the building projects since additional tools and data allow the decision been made prior to the actual construction. The company focuses on the needs of the customer, rather than continuing its existing business model, and the company reimagines a new business model by expanding its core business into a service-based business. The company believed that by following customer's needs closely, it becomes clear to creating a new business opportunity that provides values to customers and increases their productivity. Indeed, this gave the company strategic options to reimagine the business model and formulate digital strategies.

There are 3 digital strategies:

Discover new opportunity through partnering with the University of Liechtenstein and other universities around the world to envision possibilities: a new type of services, apps, and sales process
Think about how new technologies like IoT, Big Data, wireless can be implemented and used in their tools
Think of ways to improve customer interfacing in areas such as ordering, product support, introduce a new product (a new sales channel)

Results

Hilti's journey of digital transformation is an excellent example of digital innovation. In 15 years, it has created a robust information system infrastructure that makes a plethora of digital products to streamline the operations and customer services. Today, Hilti is not only a manufacturing company but also a service company. After revamping the sales process, the company has created a seamless integration of all sales channels. From the fleet management system alone during the global economic crisis of 2008-2009, the sales were increased by 26 percent and its operating profit by 12.1 percent.

Hilti has met with the increasingly complex needs of customers by extending their business and developed its new service business from the manufacturing business. The fleet-management is a great example of successful service innovation that accounts for 40% of total sales generated in the individual markets.

About the Company

Hilti is a manufacturing company that develops products include tools to support construction, building maintenance, energy, and manufacturing industries. This is a global company, which was founded in 1941 in Schaan, Liechtenstein, and now is headquartered in Plano, Texas, with 24,000 employees in more than 120 countries.