How contractors are reaping the benefits of their suppliers’ growing digital intelligence
By Ursula Grün
Amid the huge amount manufacturers are spending on digital transformation—$335 billion in 2019 alone, according to IDC—and all the talk about how those investments will ultimately benefit the customers of those manufacturers, including commercial contractor businesses like yours, you still might be wondering exactly how this wave of transformation will impact your company. When your suppliers become truly digitally intelligent, what will that mean for the customer experience, for the quality of the products and services they provide, and for the manufacturer-contractor relationship?
It turns out the benefits that end customers stand to reap from their building materials suppliers’ growing digital intelligence can indeed be substantial. Here’s a look at five areas where commercial contractors are most likely to experience those benefits:
1. Smart factories and digital supply chain networks.
Equipping building materials manufacturing facilities with IoT-connected sensors and linking those sensors to machine learning- and artificial intelligence-driven monitoring and analytics tools opens all sorts of customer-friendly possibilities. It enables manufacturers to respond in the moment to changes in customer demand by adjusting production accordingly, thus improving on-time delivery. It also enables them to gain predictive quality insights on products, to ensure customer quality expectations are consistently met. Smart factories also help manufacturers to reduce waste, which can translate into improved margins and also support sustainability aspirations.
When manufacturers extend that connectedness across the supply chain with digital channels that link their own operations with those of their suppliers and customers, they gain the ability to cost-effectively co-innovate products with customers and, perhaps, other entities along the supply chain. Let’s say a contractor has a need for a specially treated, hard-to-find lumber product that isn’t currently offered by its preferred lumber supplier. With a digitally connected supply chain, the lumber producer, lumber treatment chemical supplier, and the end customer could collaboratively and rapidly develop a lumber product that meets the contractor’s needs, first by creating an optimal formulation for the lumber treatment, then by automatically adjusting processes at the lumber manufacturing facility to accommodate production of the new offering.
The real-time flow of data across the supply chain also helps manufacturers to adjust material sourcing, production, product deliveries, etc., on the fly in response to transportation and supply obstacles, new tariff policies and other developments. This ultimately means fewer order disruptions for the end customer.
2. Customer centricity.
A series of acquisitions left Woodgrain Millwork, an Idaho-based building products manufacturer, with an unwieldy patchwork of legacy logistics systems that the company ultimately moved to simplify within a single digital freight management solution. Implemented as part of the company’s digital transformation strategy, the new system “has definitely given us abilities we didn’t have before,” says Woodgrain CIO Connie Moylan, including the ability to field customer orders as late as 3 p.m. and fill them the next morning for delivery.
Good things happen when a manufacturer and its contractor customers can easily exchange information and communicate in real time—and not just in order turnaround. When a manufacturer has the digital capabilities to gather experiential data from customers, such as via a brief survey linked to a product QR code where customers can easily provide feedback on their build-in experience with a product, it can use that data to improve the products and services they offer.
3. Access to small lot sizes and individualized products.
As frequently as construction projects require non-standardized building products, digital intelligence enables manufacturers to fill custom orders and produce small lot sizes in a way that’s cost-effective for producer and customer alike. Window coverings manufacturer Hunter Douglas is a case in point. In a business where the vast majority of products are customized, Hunter Douglas recently moved to a centralized digital system, One HD, that provides a transparent cross-brand view of all the products offered by the many brands under the HD umbrella, along with accurate pricing and order fulfillment information, in real time, right at the order entry point.
The Chamberlain Group, which manufactures commercial and residential door and access systems, engineered a similar upgrade to its LiftMaster dealer extranet website, giving users more robust self-service tools along with a more comprehensive and streamlined online view into the company’s product catalog, technical publications, and transaction history. The site also gives professional customers administrative rights so they can control whom from their company can access the extranet to place orders, etc.
4. New, customer-friendly value-added services and business models.
With convenience for the end customer in mind, Switzerland’s dormakaba Group leveraged its digital intelligence to innovate with a new cloud-based service called jay cloud that packages the company’s building-access products with software-as-a-service that enables building owners to manage building access and security directly from a mobile device, in real time. Internet of Things sensors built into the entry system hardware feed data to dormakaba’s cloud-based digital systems, which in turn feed building owners or tenants with valuable insights into the movement of people in and out of buildings. When a company hires a new employee, for example, it can use jay cloud to give the employee immediate and automatic access to the appropriate buildings or areas of a facility. It’s quite literally a turnkey service that delivers added value to the customer.
5. Doing business for purpose.
Regulatory compliance isn’t the only reason for companies to practice environmental stewardship and responsible use of resources. Companies also can leverage their commitment to sustainable practices and efficient, environmentally sensitive use of resources as a brand differentiator. For contractors, that can apply not only to your own company’s practices but those of the building materials manufacturers with which you do business. With enterprise-wide visibility and insight into energy and materials consumption during the production and transport of goods, along with the right predictive tools, your suppliers can identify ways to more efficiently use materials and resources.
Apparently, the billions of dollars manufacturers are spending on digital transformation are indeed paying off in tangible ways—for the manufacturers themselves, their customers, and the planet.
About the author
Ursula Grün is global lead for the Building Products industry at SAP. She is based in Germany. For more information, visit www.sap.com.
Modern Contractor Solutions, July 2019
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