Gartner’s top five business trends in manufacturing for 2021

trends in manufacturing

Digital and product experience, data monetization and ecosystem partnerships are among the key business trends affecting the global manufacturing sector in 2021, according to analyst firm Gartner. The company has identified these trends as driving business disruption and widening opportunities for manufacturers.

“The first response to the global pandemic for many manufacturers was to go digital in their operations as fast as possible,” comments Michelle Duerst, Research Vice President at Gartner. “While going digital is the right path, it is not enough. The trends identified by Gartner can help manufacturing CIOs prepare for similar future disruptions in the long run and mitigate challenges such as lack of customer touchpoints, entering new markets or product lines and financial distress.”

CIOs can use the following five strategic business trends to improve top-line growth by providing better experiences, according to Gartner.

Trend 1: Digital + product experience

Digital + product experience is the combination of physical products and digital services for unique product offerings to B2B customers and consumers. The pandemic limited customer engagement touchpoints due to strict lockdown restrictions worldwide. The combination of digital and product can help by providing an engaging platform that matches consumers’ expectations. This is not just about an additional service, but the ability to have a new digital business model which enables manufacturers to maintain a connection with consumers even after the product is sold, by connecting more with the brand as well as with brand experts, other customers and advanced users.

Gartner predicts that by 2025, the top 50 consumer goods manufacturers will have invested in a brand app that uses artificial intelligence (AI), embedded technology in the product, videos as a digital asset and/or integrated innovation with IT and R&D teams.

Trend 2: Total experience

Total experience is about how CIOs can use technology and interactions to advance, empower and embolden both customers and employees to improve their lifetime value. Using this approach, CIOs can identify the right platform that connects customers, partners and employees – such as an employee acting as a brand expert or customer service agent for a consumer and answering questions.

According to Gartner, organizations that provide a total experience will outperform competitors by 25% in satisfaction metrics for both customer and employee experience by 2024.

Trend 3: Ecosystem partnerships

Organizations can leverage ecosystem partnerships as an opportunity to grow, not only in mature markets but also in developing ones, according to Gartner. In the manufacturing sector, such partnerships can enable all kinds of initiatives, such as eco-friendly packaging, enablement of underdeveloped/underserved communities, and emission reduction through the remote work capability.

Gartner predicts that by 2024, 75% of the world’s top 20 consumer goods companies will engage in ecosystem partnerships that contribute to growth and sustainability goals.

Trend 4: Data monetization

Data monetization gives manufacturing CIOs the ability to generate revenue by digitizing their products and services, Gartner believes. Rapid digitization within manufacturing organizations creates large amounts of data. CIOs can share and monetize this data across the ecosystem. Using this approach, CIOs can use information as an asset and create new services or implement new business models. This can ensure continuous revenue, even in the face of disruption caused by external factors such as supply chain challenges or human resource shortages.

By the end of 2024, Gartner expects that half of the global heavy equipment manufacturing organizations will have succeeded in monetizing their data.

Trend 5: Equipment as a Service (EaaS)

EaaS is a commercial model in which companies pay for operational assets through recurring operating expenses rather than by purchasing equipment. In this model, CIOs use embedded Internet of Things (IoT) technologies that leverage common IoT design patterns and industry frameworks to ensure asset effectiveness and find solutions to asset non-performance.

Gartner estimates that 20% of industrial equipment manufacturers will support EaaS with remote industrial IoT capabilities by 2023, compared to close to zero today.