August 2022 | Point of View

What is the metaverse—and is there value for manufacturers in this digital future?

Consumers are entering the metaverse. How and where can manufacturers meet them?

What is the metaverse—and is there value for manufacturers in this digital future?

This article was originally featured in the August 2022 issue of the Manufacturing Leadership Journal. ©2022 Manufacturing Leadership Council, a division of the National Association of Manufacturers. All Rights Reserved.    

Businesses around the world took note when Facebook announced that it was changing its name to Meta Platforms, Inc., formally focusing the company’s future around the concept of the metaverse. 

There’s been significant interest from manufacturing companies on this topic ever since. The Manufacturing Leadership Council’s webcast on the metaverse, for example, drew one of its largest audiences ever. 

But is there value in the metaverse for manufacturing? 

A number of questions routinely come up in conversations with manufacturing companies about the metaverse that require answers: 

  • Will adoption live up to the hype? 
  • What is the business opportunity? 
  • Why invest in the metaverse? 
  • Where in the value chain should companies invest effort to realize the benefits? 
  • How can manufacturing companies get started? 

We’ll answer those questions and others below. 

How do we define the metaverse? And what is Autonomous X? 

It’s important to develop a solid understanding of what the metaverse means and what it actually is. That, of course, is easier said than done—there’s significant buzz and points of view swirling around, so we’ll offer a more simplified definition: The metaverse is the next generation of the internet—a virtual, interconnected reality seamlessly woven into our physical world. In other words, it’s a convergence of digital and physical environments. 

Most common definitions include three key components, including digital environments, such as Horizon Worlds or Oculus; a mechanism for interacting with those digital worlds through augmented reality, virtual reality, or even brain-computer interfaces; and a commerce engine in the digital world, such as Web 3.0, non-fungible tokens (NFTs), or blockchain. 

But there’s a fourth component not often found in other definitions: Autonomous X. There’s a digital transition underway in many industries—from connected to intelligent to autonomous. 

Consider the example of a factory: Companies can use 3D renderings to engineer and design a factory. Through IoT connectivity among products, manufacturing operations, vehicles, and buildings, people can now begin to monitor factory systems more intelligently. In the future, digital twins will manage those buildings, making Autonomous X the fourth element of the metaverse. 

The other key aspect of Autonomous X for manufacturing is that it allows persistence without human intervention. If you’re in a virtual game with three other people and they leave, there is no activity—or persistence—in that virtual world. But in manufacturing, there can be persistence without human intervention. 

In an autonomous building, a digital twin with intelligence can maintain the HVAC, security systems, and environmental controls so that both the virtual and physical worlds can continue to operate. That’s what makes the Autonomous X such a critical factor when defining the metaverse for manufacturers. 

Which elements already exist for manufacturers? 

There’s excitement about what the metaverse may look like in manufacturing, including the potential for full, virtual stores with digital-only products that create new revenue streams. 

Here’s how I described what this may look like to my 11-year-old daughter: Imagine you’re watching a U.S. women’s national soccer team match in Oculus. Kristine Lilly scores a goal, and an ad pops up asking if you’d like to purchase the same soccer cleats she’s wearing. You click on it and select the option to customize the cleat with your school logo and your name on the back. Press the button, Nike manufacturers it, and ships it to you in three days. 

That’s just one example of how the metaverse could drive convergence between entertainment, customer experience, customization, and manufacturing. Many of the building blocks for this scenario exist today, suggesting that this future may not be so far away. Still, this future-state will be a practical progression rather than a sudden shift. 

What do executives think about the metaverse today? 

West Monroe recently surveyed 150 C-suite executives from a cross section of industries, including consumer and industrial products, to understand their current views about the metaverse. 

  1. Is there business value? Most executives believe the metaverse will present business value for their organizations over the next one to five years: 57% believe it has some potential business value, and 29% believe it holds significant business value. But viewpoints differ by industry: Consumer packaged goods manufacturers were the most optimistic industry surveyed, with 43% of CPG executives believing the metaverse holds significant value for their organizations.
  2. Where should you invest? Many businesses have already begun (or plan to soon) exploring augmented reality and virtual reality technologies that will play a significant role in the metaverse. Results of the survey showed a slight leaning toward external use cases such as improving marketing campaigns or customer experience: 45% of companies are exploring these technologies now for external use, versus 39% that are actively looking at internal use cases. 

Consumer packaged goods and industrial manufacturing companies are more likely than average to be planning for external uses in the next 12 months. This could include field operations and maintenance, where augmented reality applications are already being deployed today. 

How should you start exploring the metaverse? 

Become educated: The metaverse is a rapidly evolving concept, and there are many points of view about what it is and what it means. Following the trends is critical. Even if your organization isn’t ready to fully invest today, it should be willing to experiment and be thinking about the future—it’s likely that your competitors already are. 

Create cross-functional innovation teams to begin building and testing the strategy: The best metaverse opportunity could be in research and development, manufacturing, sales, marketing, or another area across the value chain. We don’t yet know what applications will have the greatest impact for the manufacturing industry, and it will likely vary by company. Creating cross-functional teams increases your organization’s ability to identify, evaluate, and prioritize the best use cases 

Identify potential sources of value: If you haven’t read the terms and conditions of your Oculus, you should. Consider this: You are essentially providing Mark Zuckerberg with a window into your house and life. The data that can be gathered is breathtaking—and intimidating. Meta can read your eye patterns to understand what interests you, know the size of your hands, and see everything that’s in the physical space you’re playing in. 

There are massive privacy concerns here—another topic for another time—but the point is that there is a tremendous amount of data that can be gathered via the metaverse. Just imagine what could be done with this information. There will be other more direct sources of value, but it’s imperative to have your cross-functional team think beyond the obvious sources. This will help direct your organization in the next step of identifying where to pilot and test. 

Think big, start small, and act fast: There will be strategic choices to make: Do you want to be part of building the new infrastructure? Do you want to monetize content and virtual assets? Do you want to create B2B or B2C content—or even inward-facing experiences such as customer showrooms, virtual conferences, or remote collaboration solutions? Or do you want to attract existing customers and/or prospects through advertising? Be strategic—but also remain practical as you begin testing and validating the opportunities. 

Pilot, monitor, and report on metaverse-related initiatives: Innovate and test practical use cases while also keeping a close eye on where the industry is creating critical mass. This will help create a flywheel effect. Without an institutionalized process to monitor, report on, and test opportunities, you could potentially be disrupted rather than leap-frogging the competition. 

Stay practical: All of this is emerging at a time when manufacturing organizations are still adjusting to the upheaval of the past two years. It is critical to be strategic and proactive, but at the same time remain practical as companies look at the potential of the metaverse in an industrial setting in the years ahead. 

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