A common saying I hear at many conferences across shipbuilding and other industries is that there is so much value in <Enter Buzzword Here> (Digital Twin, Digital Thread, Standards, PLM, Simulation, 3D printing, IoT, Big Data, etc.), but customers need to push to drive it. One of the recent conferences I attended featured lots of discussion about the Digital Twin and how it is not being adopted very quickly in shipbuilding. Out of those discussions, two key comments came up about the Digital Twin, both of which I agree with:
- It has tremendous value that will significantly improve the business of shipbuilding
- It is not being adopted fast enough.
However, what I disagree with is the general thought that the reason the Digital Twin has not been adopted in our industry is because the customer (being the shipyard or ship owner) does not fully understand the value, and until they do, our industry is stalled. There are two reasons why I disagree with this statement.
I Disagree with Statement “Customers do not understand the Value”
For any new digital technology or methodology there are many aspects of how it can improve businesses. This can be what we create, how we create our products or even reinventing new business models. I do not think any one person or company fully understands how the new digital world will fully affect our business. As the saying goes:
We overestimate the value of technology in the short term but underestimate the value in the long term.
From my perspective, I have seen monumental growth in our industry of our understanding of new technologies and the promise they have to reshape our industry. Even when compared with other industries, shipbuilding is not that far behind in understanding these technology trends. But understanding is different than implementing these technologies into production in a way that drives real business value.
This is the source of why I disagree with the concept that we are slow to adopt technology because of the lack of understanding from the customers. Just because customers are not implementing the new technologies does not mean they do not understand.
Implementing these new technologies is difficult. It often requires a different way of thinking and doing our business. If it was simply just incorporating the technology with the way we do business today, that would be easy; however, many that have tried to do that have failed miserably. This practice is one of the reasons why most digital transformations fail. I have discussed this in previous blog posts:
Business vs. Digital Transformation
Who Really Wants a Digital Twin?
Customers understand that there is more to this technology than just a better way of creating the same widget. This is why they need to take a more holistic view on this. The business of shipbuilding has many factors which need to be considered and it is not rip and replace of old systems, processes etc.
False Promises
Technology is a great thing and many of us see it as a way to solve many of the tough problems our customers have; however, the reality of the situation is that many of us, including customers, have previously been sold on the promise of a new technology or process which unfortunately did not even come close to our expectations. This is unfortunate and while I am sure everyone that is reading this blog has never sold false promises, many others have.
This has created an environment where, even though the technology today would improve our customer’s business, they are rightfully skeptical because it sounds too good to be true. You probably react the exact same way within your business.
In the business of shipbuilding, making even a single bad decision on a new technology or digital strategy can significantly negatively affect the business. Many companies in the business of shipbuilding are getting financed milestone-to-milestone and the schedules for shipbuilding are so tight that there is only a small margin to make mistakes. This means that customers can only take a certain level of risk, making it difficult (but not impossible) to change a technology system or process.
Just because there is risk does not mean businesses will not take risks, they are just trying to take extra precautions. From my discussions with many executives on various aspects of our industry, many are ready to invest and transform their business. They are just taking extra precaution in deciding which path they should take.
I want to be crystal clear that I am not saying customers do not play a role in driving our industry forward. What I am saying is that every single stakeholder in the value chain, from software vendors, classification, design & engineering agencies, shipyards, suppliers, governments, owners and operators, has a part to play. Ultimately, the lack of implementation in our industry is not because of customers lack of knowledge or understanding.
Everyone needs to take ownership.
I am a huge believer in the philosophy of taking ownership and not having a victim mentality. If <<Enter Buzzword or Technology Here>> truly has value, then we should be able to show it even if it is one small step at a time, this is what we all call Agile. No matter whether your customer is from an engineering or design firm, supplier, shipyard, owner or even the operator, we are limited to delivering the whole benefit of our product, but that is not always needed to get value from a digital process or technology.
In most cases, it might take some investment on our side before getting your return on investment, but this is what great businesses do. Doing something or waiting for a customer to ask for it is just simply too late in today’s environment. If you truly believe in what you are saying, then taking some risk and investing in it is the smart thing to do. However, by making your investment in an incremental way, your customers start seeing value, but you can pivot if the need arises.
If you truly believe in what you are saying, then taking some risk and investing in it is the smart thing to do.
Closing Remarks
We, including our customers, see the amount of potential that all this available technology and digitalization has for us and our customers’ businesses. This can manifest itself through the creation of different or new products, new methods of creating the products or even redefining new business models.
With all the promise of what all these new digital driven technologies can provide, we cannot assume that because customers are not asking for it or not implementing it, that it is the customers fault.
It does not matter which part of the value chain you are in software and technology, manufacturing and robotics, engineering and design, supplier, shipyard, operator or the owner; each stakeholder in their sphere of expertise can make a difference and propel our industry forward.
We need to stop saying that “We cannot do ‘X’ until the customer asks for it.” If we truly feel that there is value in a new technology or strategy, we need to invest our own resources (time & money) to start providing or showing customers the value – before they invest in us. There is risk, but all great decisions have had some level of risk.