Towards machinery as a service
In the next decade, the global machinery industry is destined to face disruptive changes. The underlying reality of the transformation processes reshaping the sector is digitalization, capable of creating business models, as well as the emerging data economy.
As regards the machinery industry, digital technologies on one side offer huge opportunities to successfully tackle the challenge of sustainability and environmental responsibility. Machinery companies are already changing their industrial models and supply chains to reduce greenhouse gas and carbon emissions in order to pursue the net zero objective.
On the other side, they are projecting the industry towards a world of services, up to Machinery as a Service. By the end of the decade, the percentage of profits originating from hardware will decrease from a current 31% to 23%, for the benefit of software, bundle services and solutions.
It is what emerges from the first “Global Machinery & Equipment Report” by Bain & Company, a US consultancy group that analyses trends redesigning the sector.
More Software, Automation and Value Added Services
Research data show that the major transition involving this industry pushes the sector towards services. It means offering machinery dressed up with software, automation and related services.
The main companies in the sector will sell machines just as part of a solution within large packages including software and service as well; by doing so they will supply made-to-measure solutions to meet a customer’s requirements, within new business models.
“Only those companies that will embrace change can seize opportunities connected with market growth percentages much higher than the current ones”, experts of the US company comment.
Resilient and Sustainable Supply Chains, with Digital Instruments
In the last two years, the global pandemic first, and the current Ukraine conflict have caused major disruptions in the supply chain with lack of materials and raw materials price movements that hit, among others, the machinery sector too.
The research by Bain & Company shows that managers in all sectors have re-directed investments to prioritize resilience and flexibility as against costs and speed.
Software to monitor and analyse data and technologies, like artificial intelligence will be paramount to ensure customers as resilient and sustainable supply chains as possible, since they can help manage risks of a supply chain, improve efficiency and measure environmental impact and costs in real time.
Hence, machinery companies will have to significantly increase the centrality of software and the automation of their products, while focusing on made-to-measure solutions for vertical sectors and adapting to new business models.