CHAPTER 6 The Race for Remarkable Results Flashcards
What American company has been redesigning industrial equipment with digital functionality?
John Deere
What innovation did Deere introduce in the mid-1990s to help farmers?
GPS-steered tractor
What type of strategy did Deere pursue long before it became fashionable?
Agritech strategy
What kind of services does Deere offer to improve their customers’ bottom lines?
Fusion services
What is the purpose of sensors added to Deere’s machines?
To collect product-in-use data
What does Deere’s JDLink system allow them to do?
Learn from all machines of the same type across many farms
How many measurements does Deere collect per second from connected machines?
Between 10 million and 15 million measurements
What are the two types of analyses Deere focuses on to gain competitive advantage?
Predictive and prescriptive analyses
What key technology did Deere acquire from Bear Flag Robotics in 2021?
Autonomous driving technology
What does the See & Spray system allow farmers to do?
Selectively spray only on weeds
What is the benefit of Deere’s ExactShot technology?
Reduces fertilizer use by up to 60 percent
What does Deere’s digital architecture stack include?
- Hardware and software
- GPS-driven guidance
- Connectivity back to operations center
- Automation for machine IQ
- Autonomy
What is a significant challenge for industrial companies in delivering fusion services?
Convincing customers to participate in digital interlinking
What is the goal of Deere’s innovations?
Increasing farm profits
What do data network effects allow Deere to do?
Create new value with proprietary insights
What must industrial companies do to design products for fusion services?
Integrate them into customers’ operations
Fill in the blank: Deere’s See & Spray system generates a _______ map and a weed pressure map.
Spraying
What is the holy grail of industrial services according to the text?
Customization at scale and speed
What are the four key aspects of creating fusion services?
- Integrating into customer operations
- Employing datagraphs for analyses
- Leveraging algorithms for tailored recommendations
- Developing future value propositions
True or False: Deere has shifted from break-fix maintenance to predictive maintenance.
True
What is the first step for industrial companies to become fusion services leaders?
Architecting new services with digital hooks
What does the term ‘fusion services’ refer to?
Interlinking products with key business processes at customer operations
What is the main focus of Deere’s San Francisco laboratory?
Classifying grains using computer vision
What is a major benefit of Deere’s automation features in tractors?
Reduces operators’ strain and input costs
Fill in the blank: Deere’s innovations aim to enhance _______ and effectiveness of farming operations.
Efficiency
What do business customers typically prefer regarding industrial companies?
To stay detached from their operations
What is one way to begin the conversation about digital interlinking?
Align with a newer business priority, such as sustainability or supply chain resilience
What principle does Unilever follow for regenerative agriculture?
Have positive effects on soil health, water and air quality, carbon capture, and biodiversity
Name two companies that could use Unilever’s regenerative agriculture principle to interconnect data links.
- Deere
- CNH Industrial
- Bayer
- Cargill
How can industrials show the value of data hooks?
By enabling end-to-end visibility and revealing alternative ways to mitigate and manage supply chain risks
What is the flywheel effect in the context of customer interlinking?
Pushing a heavy flywheel to generate momentum until it starts spinning faster by itself
How did AGCO manage the initial days of the pandemic?
By aligning with new priorities of customers to trigger the flywheel effect
What can aid industrials in educating customers about the value of real-time data?
Examples from asset-light settings and simulations based on pilot experiments
Fill in the blank: Uber showed the value of real-time data in _______.
trucking and logistics
What is the purpose of offering discounts or subsidies for fusion services?
In exchange for proprietary data
What must incumbents demonstrate to compete effectively with digital startups?
- Depth of domain knowledge
- Capability to learn continuously from data
- Ability to provide actionable recommendations for machines in real time
What does the shift to a fusion services strategy change?
The competitive landscape
What should performance metrics be based on in the context of fusion services?
The buyer’s business, not the seller’s
What organizational change did Deere announce in 2020?
A new structure to drive an integrated product road map and related investments
Why is extending digital performance twins into customer operations important?
To obtain richer and fresher data
What is the role of CEOs in integrating digital twins?
Championing the integration of digital twins beyond their company
What is a tripartite twin?
Focused on how machines impact customer profitability
What is the critical step in delivering fusion services?
Shifting focus beyond machines and treating customer operations as an extension of the company
What is the minimum viable fusion services (MVFS)?
A prototype of how to cocreate the service offering with eager customers
What should the next phase after MVFS involve?
Developing a refined service offering for early enthusiasts
What should acceleration plans recognize regarding alliances?
The importance of potential alliances or acquisitions
What transformation did IBM undergo decades ago?
Shift from hardware manufacturer to B2B services provider
What was a significant acquisition made by Monsanto in 2013?
Acquisition of the Climate Corporation
What does McKinsey estimate the digitization of farms could deliver per acre?
$200 to $800 of value unlocked
What is unbundled pricing in the context of fusion services?
Where buyers pay for the fusion product as before, without additional clauses
True or False: Pure-play service companies only provide services tied to specific products.
False
What kind of contracts could industrials enter into to collect additional data?
Contracts that yield no revenues
What percentage of companies in McKinsey’s study saw positive gains from digitization initiatives?
30 percent to 40 percent
What is the frontier of value from fusion services based on?
Datagraphs that accumulate data across different settings and powerful algorithms
What percentage of companies are expected to see positive gains from digitization initiatives?
30 percent to 40 percent
What is the primary benefit of leveraging data network effects in digitization?
Higher gains through personalized recommendations
What role do dealers and distributors play in service delivery for industrial companies?
They have tacit knowledge that complements codified data from sensors and satellites
What is required for delivering fusion services?
Human interventions to fix machines that do not self-diagnose and self-heal
What should CEOs consider regarding their business scope in the digital age?
Focus on the digital technology stack to redesign machinery and integrate with product datagraphs
Fill in the blank: Fusion services are about improving customer outcomes through superior expertise and _______.
personalized recommendations
What did GE Aviation use to model the performance of GE-90 engines in the Emirates fleet?
Digital twins
What was the financial challenge faced by GE Aviation and Emirates Airlines?
Servicing engines more often than planned increased costs for both parties
How does Caterpillar enhance customer outcomes?
By using digital twins for data-driven insights and ultra-granular forecasting
What is the significant shift in digitization about?
Evolution from systems of record to systems of datagraphs
What distinguishes Tesla’s knowledge base from traditional automobile insurers’ databases?
Data about how each vehicle owner drives their car under Autopilot versus other conditions
What should service knowledge bases be designed to study?
Patterns across customers, contexts, and conditions
True or False: The service frontier for industrial companies only involves delivering machines.
False
What must industrial companies assess to pursue new opportunities beyond machines?
The likelihood of value migrating from products to services
Which companies pose a competitive threat to established firms like Deere?
New, digitally savvy service providers like Trimble, Farmers Edge, and Granular
What should Deere focus on to maintain its service value proposition?
Distinctive data on how its machines could enhance farm productivity
What must industrial giants rethink to win the race for remarkable results?
Their service value propositions and customer relationships
Fill in the blank: New service value will be unlocked with recommendations derived from _______.
datagraphs
What strategy can industrial companies consider if new service opportunities are unattractive?
Integrating machines with complementary products into coherent systems
