Start with the customer
We talked about „rising customer expectations“ since years. But what do they expect?
Amazon‘s ease and endless choice making them the ultimate one-stop shop?
Airbnb‘s (initially) unbeatable prize, and its individualism & lifestyle – compared to a classical business hotel?
Or Apple‘s style & design making their products an object of desire rather than tech gadget?
Who will uberize the building product industry?
One common strategy approach is to transform the offering – from product to subscription to service.
Another one to complete the offering and become a one-stop-shop for a category – like providing not just tiles or faucets – but the entire bathroom „solution“, simplifying the interaction with architects, specifiers, contractors.
„We want to become the Amazon of XYZ.“ is another strategy I frequently hear. Replace XYZ with home improvement, DIY, or even metal products.
Steel trader kloeckner & Co drives their digitalization for the steel industry through kloeckner.i Their claim is to make every interaction with Klöckner simpler and faster.
Look outside your industry - for attackers, markets & inspiration
thyssenkrupp enters into new markets by selling tubes, profiles and metal sheets directly to DIY and home improvement customers in smallest quantities. They have been doing this successfully already in the UK and Spain, and will offer a new German online shop „Materials4Me“ starting in April.
Startup Acre Designs intends to revolutionize the way we buy and build houses. It’s not just the product – building zero-energy homes outfitted with the latest technology. But they blend into the business model a fair bit of Amazon and IKEA:
- Similar to IKEA - they assemble all parts to build the house in their warehouse and pack into a single shipping container.
- Like Amazon – they sell online. Buyers will select and configure their homes online.
- Unlike IKEA, you will not be left alone assembling your house. Acre Designs will work with local contractors to build the house.
How will potential buyers experience and „test-drive“ their home - before considering to buying it online? One idea the company has is to have existing owners open their doors through Airbnb.
(Reminding me of Geberit: they suggest hotels with Geberit`s high-end shower toilet.)
Look-out for emerging trends & technology
Breathing houses & modular housing units for refugees
The Refugee Housing (RHU) project was a finalist in 2014’s „World Design Impact Prize“ – organized by the International Council of Societies of Industrial Design, and financially backed by the IKEA foundation. RHU aims to provide temporary but robust housing for refugees that would replace the traditional tents. The idea behind this project came from the realization that the average lifespan of a refugee tent was 6 months while refugees remained in camps for an average of 12 years
The Museum of Finnish Architecture organized a similar competition „From Border to Home“. Smart architects approached the refugee crisis with repurposed office space and "breathing" homes.
Whether the Syrian refugees stay in Jordan, Turkey, or enter the EU - they will need shelter. Take a look at the numbers, and consider whether your company can contribute or benefit from the crisis.
The transformational impact of 3D printing and laser cutting
3D printing for the engineers
3D printing has inspired many smart engineers to push the limits of feasibility, and the internet is full of new applications:
- Using 3D printing to manufacture spare parts on demand in remote locations
- Accelerating prototype developments through 3D prints
- Printing otherwise impossible shapes & characteristics e.g. interior cooling channels in gas turbine...
- 3D printed ceramic molds for metals casting
- or even synthesizing entire chemical molecules
Incredibly beautiful and individualized products
As a consumer, I don’t care about the manufacturing process. Remember customer expectations, and think „Apple“ as a synonym for aesthetic design. It was love at first sight. I saw „her“ first in the art museum „Centre Pompidou“ in Paris, and I had to take „her“ home: David Trubridge`s „Floral“ lamp.
Organic repeating beautiful shapes, illuminated from within, casting leaf-like shadows on my living room ceiling and walls. Interestingly Trubridge’s lamp is handcrafted.
Nervous Systems is a design studio that heavily uses 3D printing and laser cutting to manufacture a design focused product range including house wares, lamps and jewelry. They design, provide concepts, and even offer to download design for home 3D-printing.
Likewise Trubridge they deliver excellent design, but Nervous Systems adds the digital element to the busines model. One of their projects, Xylem Trellis, is a beautiful leaf-inspired design for a facade manufactured made of laser cut plywood.
Like for Adidas or Nike, digital transformation through 3D manufacturing allows for perfectly individualized products at mass-production efficiency, and even with less waste. Nervous Systems combines 3D-printing and laser cutting in manufacturing with artful design. Interestingly they work with a wide range of materials such as stainless steel, brass, silver, rubber and even wood.
3D printing for construction projects
3D printing an entire building or large scale structures has been proven feasible in a number of prototypes and early applications.
Chinese materials firm Yingchuang New Materials has built 10 demo houses in one day using a huge 3D printer spraying a mixture of quick drying cement and recycled raw materials.
While this is conceptually interesting, the prize tag to develop the printer is rather frightening: 20 million yuan (approx. 3 million USD).
Consistent with this trend is CyBe Construction’s announcement to sell 3D printable mortar in 2016. They are even offering concrete 3D printing services to local designers and contractors.
Engineering firm Arup has produced prototype 3D-printed steel construction joints. They expect to significantly cut waste and cost, at the same time enabling a very sophisticated, elegant design.
Another start-up, MX3D, plan to 3D print a steel bridge in Amsterdam. Their robots draw freeform metal lines.
Admittedly, these construction examples are prototypes and start-up ideas - but they indicate a new type of players entering the market.
Conclusion
Digital transformation happens all over the place. Industry giants are disintermediating their former channel partners, others diversify to become the Amazon of the building products & DIY industry, and creative start-ups from the maker movement attract the attention of the architect and design community.
How early do you engage with specifiers and architects & how digitally complete is your offering today?
Essential capabilities to win in the digital domain include superior customer experience, the ability to individualize & orchestrate from web shop through manufacturing to supply chain.
Are you ready for this?
Automation & customer proximity shift the entire cost structure – especially for lot size 1 production. Large scale industrial 3D printing is still more expensive than mass production. But almost waste-less manufacturing and advanced designs may provide long-term advantages of 3D printing over classical manufacturing.
How ready is your supply chain an manufacturing for lot size 1?
Finally, please also keep the digital giant Amazon on your radar. Already in 2014, Forbes magazine predicted Amazon entering the 3D-printing race may shift the landscape. In 2015, Amazon filed patents for truck-based 3D-printers. This is no small start-up experimenting with prototypes.
Digital transformation can be confusing and intimidating. But it also presents a world of new opportunity – to get closer to your customers, move with greater velocity, and create innovative offerings. Transformation is beginning also in our industry, and the impact can be revolutionary.
We’re ready to help you define your roadmap to digital transformation, and be ready for the possibilities.
Want to learn more? Attend the SAP Manufacturing Industries Forum 2016 on June 14-15 in Lombard, IL. For details, please visit the forum’s website.
Stefan Weisenberger is director, Mill Products at SAP.
Follow Stefan on twitter @belobregovic
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