“I believe we need to improve our data sharing capabilities and become better in collaboration with our partners, but can you tell us how much money we will save? Where will we gain and by how much? What range in ROI are we looking at? Is it worth investing?” – these and similar questions, we hear frequently in our business discussions.
At Eurostep we have our own data but in searching for 3rd party reference data we came across a recent paper published at the beginning of this year by the World Economic Forum. Partly based on research by Boston Consulting Group, the White Paper is called “Share to Gain: Unlocking Data Value in Manufacturing” and identifies cases for improved data sharing.
The world, and every company, is becoming more and more driven by data. As most companies still focus on data sharing within their companies, a vast potential is not addressed. The potential of sharing data across companies, with business partners and suppliers, across the value chain. 100 Billion USD is mentioned in the paper as the potential value for sharing with a focus on manufacturing process optimization.
The report from WEF confirms much of what we are seeing at Eurostep. It states that data sharing in manufacturing provides value in five main areas by:
- Enhancing asset optimization
- Tracking products along the value chain
- Tracing process conditions along the value chain.
- Exchanging digital product characteristics
- Verifying provenance
The report continues, for collaboration and data sharing to be successful, stakeholders need a good understanding of how to promote value together. In the five main areas or application domains identified, three factors promote success:
- A clear value proposition and rationale for data sharing
- Mutually beneficial agreements
- The use of secure technologies and common standards.
We enjoyed reading the report and we recommend all to do so. Below are some reflections and additions from Eurostep to the material in the WEF report.
In our experience, improved data sharing capabilities will deliver the following benefits:
Reduction or elimination of manual work – saving millions of USD per year for a midsized company.
Being confident about the shared data eliminates efforts to check over and over again what is being communicated with external partners. When data shared is clear, concise and valid “miracles” started to happen. Check, double checks and triple checks are eliminated. The business can operate at a different pace and increase the level of automation. The picture below clearly depicts the value to the organization adding the last percentages in completeness and accuracy with the last 5% adding more than 30% in employee effectiveness.
Speed of doing business.
One of the tools commonly replaced by ShareAspace is Excel, used as a “collaboration tool”, typically designed for initial limited use and then becoming a showstopper for acceleration business. Single user and with time slots made available to update Excel is not uncommon. Blocking business growth can easily lead to lost business of millions of USD and giving competitors a chance to deliver instead of you. A benchmark and research study performed by LNS Research, US Navy Naval Air Command and NIST report a 74% reduction in design, manufacturing and inspection cycle time and response time from suppliers is reduced by 77%. Both these refer to the value of Digitalization. Working collaboratively, in the extended enterprise, these digitalization benefits should be “re-used” across the value chain and make the case for the Digital Thread in external collaboration.
This is huge. The cost with a serious mistake is initially measured by the cost of fixing it. A yacht engine that turned out too big on the day of installation. A new manufacturing machine that was bigger than expected causing a factory wall to be moved with delays in time to deployment. The business world is full of such examples and the plan is of course that it will never happen again. But mistakes will happen again. Add to the cost of fixing the problem also the lost goodwill resulting in: “I will never again buy from this company”. The cost when these mistakes happen could easily be hundreds of thousands to even millions of USD with the loss in goodwill to be added.
Avoiding exposing sensitive information to the wrong persons.
The extreme example is penalties due to violating Export Control rules and ITAR. The penalty could in some cases be more than 100 million USD with blacklisting of the company added on top. But any loss of IP is bad.
Being a good B2B partner.
Business is conducted in networks. Networks are based on trust with increased concerns of IP protection, but zero-trust networking needs to perform too. Controlling the collaboration in a secure hub will make your company attractive as a business partner with possibilities to be invited and scale in highly demanding industries and markets. The value of this is also significant.
We would be very interested to hear your stories and, particularly, cases with numbers, so please do not hesitate to contact us!
Eurostep have published several papers on the topic of collaboration. We recommend reading the following papers:
- Improving Collaboration with Suppliers of Complex Components. 5 Things you Need to Manage
- Having the Correct Supplier Documentation is More Important than you Think!