Helping to demystify industrial
digitalisation in UK manufacturing

Reset 2020: Building resilience in manufacturing

29 July, 2020

As the world is uniting to bounce back from the setback, global industries are also crafting strategies to emerge stronger after the economic slowdown. The current developments are affecting companies across the globe and shaping the future of innovation. In these challenging times, there is an urgent need to develop growth strategies. Coping with uncertainty is the new normal, and now is the right time for a change of perspective.

 

Unprecedented Impact

Local governments across the globe have been trying to mitigate the effects of the outbreak by providing state aid and other forms of support for businesses. Some industrial companies have taken a creative approach - reshuffling resources, seeking short-term financial solutions, and temporarily repurposing their production lines. 

Reaching the tipping point of the current developments is an opportunity for a restart. Yes, it is a shift in how organisations operate, and the business transformation has its own challenges. At the same time, it is also a chance for building resilient business models and taking a step towards stability. 

 

A Lesson in Resilience 

The downturn is fueling a widening gap between digitally-enabled businesses and legacy organisations. As advanced technologies are creating new opportunities for enhancing productivity, digitisation becomes a game-changing asset that enables scaling, automating, and developing new business models. 

Additionally, the traditional CAPEX approach has proven vulnerable to a cyclical economy - less free cash flow due to capital expenditures leads to a halt in short-term operations. And let’s not forget the critical importance of customer intimacy for sustaining and rebuilding your business. Thus prioritising customer retention in difficult times turns into a crucial business tool.

 

The Way Forward 

How to become a resilient company that can survive an economic downturn and grow faster after that? The industrial Equipment-as-a-Service (EaaS) business model offers benefits for both manufacturers and end-customers. 

Although the as-a-service model in manufacturing has been around for a while, it has never been more relevant than it is now. Its main strength lies in guaranteed revenue, predictability, and customer retention. In comparison to one-off transactions, which are highly scrutinised at the moment, recurring revenue is a resilient force.

The most recent data provided by the creators of this index, Zuora, clearly shows that subscription companies have proved their resilience. The COVID-19 Subscription Impact Report found that 53.3% of companies have not seen a significant impact to their subscriber acquisition rates, 22.5% of companies are seeing their subscription growth rate accelerate, and 12.8% of companies are seeing slowing growth, but are still growing.

In sharp contrast to the one-time purchase, the EaaS model offers the possibility to receive recurring revenue through the whole duration of your equipment’s life cycle. What does that mean for your business? 

 

Learn more about how to gain a competitive edge by downloading relayr’s Power Up Guide.

 

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