Streamlining Manufacturing with Rohit Batra at ServiceNow Knowledge 2024

This is Techron tv. Hello and welcome back to ServiceNow Knowledge 2024. We're here with Ro Bacher and we're gonna be talking about ServiceNow's push into manufacturing, which is a relatively new area for them and let's get into it.

But hey, welcome to Jump. Thank you so much, Mike. Thanks for having me.

You guys are in a lot of different verticals, so is this the latest in a series or is there something about manufacturing in particular that ServiceNow saw an opportunity for its platform that's different? Yeah, no, absolutely. So manufacturing is a new vertical for us that we are getting into, especially in the space of, uh, customer service, sales and support.

Um, so that's been, and the domain that we've been focusing on, and to be honest, our push in industries has predominantly been by learning from other customers who are using ServiceNow already. Um, so our, our strategy has been if you look at customers who are using ServiceNow specific use cases and they've deployed in areas where we hadn't initially looked at and then looking at those common patterns and then productizing it by building a, a product that becomes easier for them to deploy, easier for their peers to use and launch into the market. So manufacturing is that new vertical that we in fact just officially announced today, uh, in, in the media.

So the new product is called Manufacturing commercial operations, MCO for the shot and MCO is essentially the one product skew that we've created for all of our manufacturing, subsegments heavy CPG chemicals and automotives that they can use for a single solution, a single stack that can solve for customer service support and sales management all in one product Today for the average manufacturer, are those three different systems, three different platforms and they're supposed to be handoffs that don't happen? Absolutely. Three different systems are, in some cases they are no systems.

So I'll give you a couple of examples. We are working with some manufacturing customers where we've spoken to, um, historically what's happened is that they've seen typical the first, the first order order comes in, let's assume from a big box retailer to a CPG manufacturer. It will go into a traditional SAP system for example.

It will basically build out the sales order, build out the customer order, start doing the production orders and the fulfillment all works great. Now what happens is if the retailer comes in and says, hold on a second, I wanna change the order. So I had 2000 cereal boxes.

Now I want 15 on with, or I want to add something else or wanna modify the order to a different motion. That's where the adult systems that do this today. So what would happen is that send an email and then email would go back, somebody will have to go to the fulfillment team and say, do we have other changes can be applied?

We have logistics that can actually deploy this. How do I should do all of these things? And that orchestration today is very very matter.

Um, and so what we are doing is not necessarily the first order because we could do that for some scenarios, but more often than not, our focus really is how do we manage the exceptions that come in from an order management perspective, when you're changing order configurations, when you're changing the, the, the, the requests coming in from retailers or for that matter, um, you know, in a heavy case be from another customer, that's what we are productizing. And as an example, In my experience, there are as many exceptions as there are rules, A hundred percent, 90% of the orders that we are hearing from our manufacturers typically go through a change. And so when you look at those, there's a large amount of overhead that gets happen.

Uh, a large amount of manual work that needs to go through to make sure that can be productized and to, uh, through NCO as a product, How often do I make that email make the request with a change and yet 2000 widgets still show up and I gotta send 500 of them back? A hundred percent. And I think the other one is that we also wanna stop the ability to do emails.

So what NC is also packaging is an innovation that we've had in some of our other industry, which we call service rich because when you look at manufacturing vertical, whether you look at CPG as we continue with that example, the retailer may also use ServiceNow. So does the CPG supplier. Now, if they're both on ServiceNow, we don't even want an email to go through.

So what we've done is MCO now has the ability to connect multiple ServiceNow instances. So you can now send a request from your ServiceNow instance to the CPGs ServiceNow instance. All of it happens fully automated, fully transparent, fully integrated, and you can take that narrative to a heavy, uh, heavy con heavy manufacturing or uh, OEM as well adds with their customers enterprise that actually may be using parts and supplies from them, which should also have ServiceNow instances.

You could do it in automotive industries where you have your suppliers that may use ServiceNow at as automotive or EEMI have ServiceNow as well. And that can connect the value chain, connect the ecosystem for a fully integrated solution. That's why SCO will do, You cannot walk through this show for more than 10 years without tripping over somebody talking about ai.

How will AI get applied to these manufacturing processes? Absolutely. So there's a couple of ways that we are looking at it.

I mean, the easiest ones that we are hearing from our customers, things like summarization, right? When you're looking at these cases and order intakes that are happening going back and forth, you want to be able to provide summary of these order requests and changes so you can route it to the right teams in the organization. Um, you can look at knowledge creation and knowledge deflection.

A lot of the information that happens in these manufacturing companies remains as tribal knowledge. So how do we convert the tribal knowledge into knowledge that can then be used by our organization so that they can use it for deflection in the future cases? So you're looking at generative AI to be able to solve for those cases.

Uh, in our manufacturing products, Are a lot of these manufacturing companies looking at their supply chains, it seems to me ridges seem to get hit by container ships and rebels are taking over canals and we gotta ship some things around. I mean, I guess my question to this is like how agile are the manufacturing companies trying to become? Yeah, absolutely they are.

And I think to your point, um, the changes that are happening across the different dimensions of the world, the different, um, you know, the different incidents that are happening across the world do drive a lot of changes in terms of supply chain. The way we are looking at the manufacturing lifecycles that we are breaking it up into customer engagement as on the supply chain side, the customer engagement side of the house is where MCO focuses on. That's the predominant focus we wanna solve for customer service after sales support, sales management, that's what MCO does.

But on the backend, MCO integrates to the supply chain product ServiceNow to make sure that we can then have a fully transparent end-to-end ecosystem that we can deliver to our Customers. So in the same way I have systems of engagement and then I have systems of record in an ERP kind of workflow concept. The same thing plays out in manufacturing.

Exactly right. That's the whole intent. MCO will take away the customer, the customer engagement side of the house, to your point, system of action.

And then we can work on a system of a record with either an SAP system or our own orchestration that can run across multiple multiple SAP or Oracle EBS solutions. So what's the biggest challenge you've seen so far in terms of getting manufacturing companies to wrap their heads around this? I mean, who wakes up in the morning and says, we gotta solve this.

So interestingly enough, we've not heard many manufacturing customers that don't want this. The question is how do we move from what we have today to how do we move to what MCO does? I mean, as a, as a natural IT individual, there's always be a question saying, I need another system now.

'cause you're not replacing an existing system, right? So we are talking to a system of action, system of action typically overlays on top of existing systems. You're not talking about rationalization of these application, we are not talking about replacing S-A-P-S-A-P needs to exist because that's what it does.

It does supply chain. We are not taking over that function, but we are all laying on top of the orchestration. So there are use cases that needs to be defined.

There's business value that needs to be assessed. And once you actually have a great value proposition and a business case for IT, customers will pivot over. Uh, and over the past, like I said, this is driven based on innovation that we've seen with existing customers.

So it's not that customers haven't done it, we've had customers who've presented ad knowledge in the previous years that have given us ideas that they've already built this themselves and that's what they want us to productize. We've been talking about digital transformation for, I don't know, five, 10 years, however you want to count. Is there something unique about manufacturing that's more challenging to make those kinds of transformations than other sectors?

So I have a theory. Uh, so I think digital transformation, you are right. We've been talking about it for many, many years, but if you look at digital transformation, as we've talked about in the past, has always been on the channel side.

This being omnichannel is being available where the customer exists. That's also, but what happens when you've taken the request from the customer and now you've gone back into a CA seal of middle office applications or back office applications that still exist not being integrated. There's the workflow, there's the automation that exists across them.

So you solve the problem of getting requests in, but you still gotta mess on the back. And that's kinda what we are doing right now. And that's why when Bill talks about business transformation, that's to me what it means.

We are not, we are not just looking at digital transformation in terms of customer engagement, but we are looking at the orchestration, the system of action that sits across all your existing systems and provides the integrated view, uh, to your supply to, to your, to your customers. And for manufacturing, that's been a predominant pain. 'cause they've got so many different applications that exist in the, in their, in their infrastructure and solving that across the system of action in the middle office, in the back office.

That's what NCO would actually sell for. Have you seen any of the end customers of the manufacturing companies start applying some sort of metrics to judge the agility of the manufacturer and that's how they're gonna decide who to do business with? Yeah, absolutely.

I think if you look at the convention, 90% of, we spoke to a large CPG customer, they said 90% of the orders go through a change. Like all, almost all of my orders are going to have a manual intervention and we can't support that. Um, somebody else talked about how about logistics being a big issue where, you know, if that same, the same order now if you've reduced the order, you still may have another truck that might be going out to the same retailer.

How do you consolidate the orders into a single request that might go out? So we've seen multiple customers coming in and saying, look, I do have this problem. We've seen it before, but I wanna find a way to orchestral.

And that's kinda what we've learned from our customers that we are delivering it into the product. All right folks, you heard it here. Manufacturing, it's kind of a mix of science and art, but it's all about how agile and flexible you're gonna be.

Thank you. Yeah. Thank you so much Mike.

Appreciate it. All right. We'll be back in a minute.