What Manufacturers Can Learn from the Digital Transformation of Other Industries

As manufacturers are busy digitizing operations and processes, it can be beneficial to learn from those that have gone before down this road. There are numerous examples. One that comes to mind is the music industry’s digital transition from analog LPs to digital streaming music services. This industry now operates with a digital supply chain, distribution channel, and retail point of sale infrastructure. With this transformation has come a changing of the guard. Traditional manufacturers and supply chain providers can learn from history to better navigate this point of transition in their industry. 

A Brief History of the Music Business

According to an article published by Spencer Stuart, the heyday of the music business was in 1999 when revenues totaled $27 billion. Here are a couple of data points to provide perspective:

  • The most successful album was by Backstreet Boys and sold more than 20 million copies
  • Singles made up just 4 percent of industry revenues
  • 1999 was the year Napster made its debut

Fast forward to today, and we have a music business that generates half the revenue, at about $15 billion. Half of all revenue is attributed to digital, which surpasses every other industry’s percentage. For example, 14 percent of the book industry’s revenues are now attributed to digital products (which shocked me, given the multitude of e-book readers).

Brave New World

In contrast, the exposure musical artists have now achieved is spectacular, to put it mildly. Today’s top video of all time is a music video, “Luis Fonsi – Despacito featuring Daddy Yankee” has been watched 6.6 billion times as of the writing of this article! There are another 30 videos that have been watched over 2 billion times (source).

This type of exposure is nothing short of spectacular. The ability to find an audience across the world has never been easy, but it is at least easier today. This type of awareness was hard to even conceive 20 years ago. The reach of digital is far and wide, given the lack of constraints to share and watch on virtually any device, at any time, in any location. This is what happens with a digital transformation. Greater ease of use, sharing, and distribution. Those organizations that understand the end game are the ones who have the right vision to survive the change.

The Alliance Path

“Build vs. partner” is a decision most business owners or leadership teams must consider at one time or another. This decision must also be contemplated as part of your digital strategy. 

There are many options when it comes to engaging in a digital marketplace. Tech giants offer manufacturers an easy path towards digitization. It could be as easy as just installing new software or logging into an account. A digital marketplace can provide instant access to all the capabilities of a digital platform without taking years to build it yourself, launch, and then promote. 

Of course, the flip side of embracing this strategy is that you may soon have less connectivity with your customers or end users. 

For example, the implementation of Augmented Reality (AR) systems provided via goggles or glasses can improve workflow execution or maintenance efficiency, further enhanced with the IIoT. Those in a role of inspecting machinery or capital assets can view an overlay of engineering As-Designed drawings, work instructions, or other intelligence to help in detecting potential problems or completing tasks. Advanced systems even offer a 3D view i.e., as the person moves around the machine, the AR system aligns physical and virtual images. 

Some of the tech giants now provide these digital services via their own platforms – which is impressive. In exchange for these companies making such a sizable investment, your new partners will now be an embedded as part of your value chain. 

What is the Right Direction?

By now I suspect you are thinking about what option or strategy is best? Compete with other digital marketplace providers directly by building your own as part of your digital transformation strategy, or perhaps is it better to partner with these providers instead? 

Some sort of partnership or alliance strategy is likely in your future. As digital transformation takes hold, the world gets smaller, or “flatter.” In his book first published in 2005, The World Is Flat, Thomas Friedman reflected on a journey to Bangalore, India, when he realized globalization has changed global economic concepts. 

Today, his story can be heard in many ways, various price points, and with shared recommendations from other readers (source):

In this case, Amazon is the marketplace Mr. Friedman decided to partner with. He worked with his supply chain to prepare and publish his book in hardback, paperback, audio book and Kindle formats. And, buyers can purchase it either as a brand-new product or from the secondary used market. In the end, his story can now be told to tens of millions of people across the world. 

Deciding what is the “right” path for your digital transformation journey, manufacturers should first start with deciding what it is that you know and do best – and then focus on being the best you can be in those capabilities. 

Regardless the choice you make, it is now necessary to put in the time, effort and resources to complete a digital transformation of your own operations first, to then be at par with the world’s other digital ecosystems. This option then empowers you to then be able to better evaluate future alliance partners, or to stay “solo.” Each option can deliver value. The key is to keep open your choices. 

Read my next post, Create a Digital Ecosystem by Taking a Cue from the Tech Giants, to explore a little deeper as to what else should be considered in picking the best strategy digital alliance and ecosystem strategy – especially those operating in the Aerospace and Defense, Industrial Equipment, and other complex discrete industries.

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Reduce the Risk of an MES Deployment by Thinking like a Venture Capitalist

Successful Venture Capitalists have one thing in common – they know how to effectively manage risk. Given the challenges and risks associated with implementing a Manufacturing Execution System (MES), perhaps manufacturers can learn from this community and reduce the risk of failure in an MES deployment? 

Three Ways VCs Mitigate Risk

Paul Cohn appears to be a pretty knowledgeable subject matter expert on how to run a Venture Capital firm. Based on his biography, he has been a VC/PE finance guy his whole career. His experience includes being a Managing Director and a member of the Investment Committee at Fort Washington Capital Partners, an investment advisory firm with a $3.5 billion of assets under management.

He published a blog post a couple of years ago and spoke to three ways that a VC can mitigate risk: 1) structurally, 2) through due diligence, and 3) by investing in a portfolio of companies. This advice makes a lot of sense. What follows is my interpretation of how these insights can be applied to an MES deployment, to see if this logic can transcend into the world of manufacturing, to learn from his insights.


1. Structure an MES Investment Through a Phased Approach

A common strategy that investors pursue when evaluating whether to put money into a new startup is to participate in a sequence of investment “rounds” as part of the overall funding strategy. Angel investors provide the first funds, typically coming from the founder, their family member, or a friend. This money starts the company but will only last so long. The Series “A” round comes next as a proof of concept to see if the company’s business model and strategy has merit. 

Manufacturers evaluating how to start a digital transformation of their operations could follow a similar structured approach. Instead of trying to architect, finance, and coordinate a large, multi-million-dollar implementation across multiple sites as one big project, they could instead choose to do a Series “A” round, or what I will define as a Pilot program.

The key to a success here is to clearly define the goal of the project, what is included, and how you will measure success. Most Pilots are set up to be implemented with a short timeframe to validate that the software solution under consideration can address the business challenges being faced. If it doesn’t, then you can “fail fast” and move on to an alternative solution. If it works, then deployment risk has been substantially reduced, increasing the chance that the desired outcome can be achieved. Or, in VC speak, opening the door to funding the next Series “B” or “C” rounds. 

2. Perform the Necessary Due Diligence

It is always a good idea to research new projects before committing. This preparation helps to avoid surprises and better plan for success. The same can be said of an MES implementation. Those that have done this type of due diligence know that much has been written about the potential pitfalls of completing this type of project. 

From a risk management perspective, one of the biggest challenges is that the project takes too long to complete – so it is never fully implemented. Project timeframe delays, scope creep, or share of wallet issues that arise out of an extended installation add considerable risk that an MES investment will not provide the necessary returns, negatively impacting your ROI.

To learn from VCs, manufacturers could limit this risk by choosing to first start with a small project, such as a Pilot. This type of program can be implemented quickly in 12 weeks or less, effectively reducing the risk of non-completion. 

3. Invest in a Portfolio of IT and OT Projects

Those tasked with implementing or upgrading software applications at manufacturing organizations can also learn from the VC community by adopting a portfolio strategy. Venture Capitalists seldom invest in just one company. That would be akin to playing roulette by placing your entire bet on 22 black. It is an “all or nothing” highly risky choice. 

CEOs, CIOs and other executives responsible for the financial performance of software investment could better hedge their annual budget by doing 10 Pilot projects, each with a budget of say $250,000. The risk that all 10 projects fail is very low compared to being “all in” with one project costing $2.5 million (that might take a year or two to implement). 


In conclusion, there is a very compelling logic to think like a VC when planning how to invest in new software implementations. The risk of total failure can be effectively mitigated to zero while the potential for upside and knowledge gain is quite high. A Pilot MES might be the perfect way to get started and move your digital transformation through from just a planning project to one that can deliver real results and an ROI. 

A new program was just launched by iBase-t whereby a pre-configured “solution in a box” can be deployed in just 90 days. With this option, you can test the waters with how an MES can perform and know quickly if it is the right option. 

Maybe now it is time to start thinking more like a VC and reduce your risk exposure? Include a higher number of Pilot programs in your investment plan knowing that you will either fail fast or identify a new path forward as part of your Industry 4.0 strategy.

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iBase-t Fast Value Program Challenges the Manufacturing Software Industry Status Quo with Accelerated Time-to-Value

New program delivers quick value from Manufacturing Execution System deployments in complex discrete manufacturing

FOOTHILL RANCH, Calif. – Dec. 04, 2019 iBase-t, a leading provider of digital manufacturing, MRO and quality software solutions, today launched an innovative program that streamlines how software solutions for complex discrete manufacturing can be deployed quickly to enable a much faster time-to-value. The program provides iBase-t customers software licenses, implementation services, training, and first year maintenance with realized business value within 90 days of initiation. 

iBase-t’s Fast Value program is most recently proven with business value delivered in 90 days to a Defense Electronics and Satellite Components Manufacturer.  Due to this manufacturer serving markets that require advanced technology and high reliability products, their need to achieve the highest level of compliance and efficient operations is paramount. Despite this complex environment, iBase-t’s Fast Value program helped simplify the implementation of a solution that provides complete track and trace containment as part of their compliance-led track and traceability program.  

Despite the high business value of implementing software solutions in complex manufacturing, manufacturers continue to struggle with identifying specific benefits to justify these investments. Deployments often stall due to a lack of executive commitment, integration challenges, or confusion over how best to manage the project.  

The iBase-t Fast Value program overcomes these challenges by prioritizing and delivering a set of pre-configured capabilities, such as incorporating engineering changes, identifying quality trends, or eliminating paper-based work instructions. These pre-defined program attributes help to deliver solutions that address complex manufacturing issues once deployed – typically in 90 days – virtually eliminating the risk of project delay for an accelerated time-to-value. 

Offered for a fixed price that includes software licenses, implementation services, and first year maintenance, the Fast Value program has transformed how manufacturing software project ROI will now be evaluated.

“Implementing a full MES system lays a foundation for customer-facing (and compliance-based) benefits, including electronic product lot and/or serial genealogy, and multisite orchestration of manufacturing processes. This can also be used to improve agility and speed in vertically integrated companies. One-third of survey respondents cited four specific areas that achieved benefits in three months.” * (Gartner “Survey Analysis: The Business Value of Manufacturing Execution Systems,” Rick Franzosa, Simon Jacobson, October 18, 2019. *2018 Gartner’s MESA Survey). 

“Fast Value is a great reflection of what iBase-t provides our customers – making the complex simple. This new program lets manufacturers start small, move fast, and scale up with a proven model that can deliver value quickly,” said Tom Hennessey, Vice President of Marketing, iBase-t. 


About iBase-t
iBase-t is a leading provider of software solutions for complex, highly regulated industries, like Aerospace and Defense, Medical Devices, Nuclear, Industrial Equipment, Electronics, and Shipbuilding. iBase-t’s Digital Manufacturing software streamlines and integrates Manufacturing Execution System and Operations Management (MES/MOM), Maintenance, Repair and Overhaul (MRO) and Enterprise Quality Management Systems (EQMS) for operations and Supplier Quality Management. iBase-t’s software is implemented by many leading industrial organizations as part of their enterprise Digital Thread initiatives.