From Scan to Analyze – Zebra Technologies’ Journey to become the leader of Enterprise Asset Intelligence

Growth aspirations and strategies for one of the world’s foremost enterprise resource management and Internet-of-Things device manufacturers

To remain competitive in an interconnected, globalized, and consumer-preference driven economy, firms have been forced to rapidly redefine classic supply chain models and processes through the lens of enterprise technology. As operating requirements have evolved, certain technology companies have taken advantage of this opportunity to create products and services that enable competitive differentiation for their clients in purchasing materials, making products, and delivering these products to end customers, Zebra Technologies, originally incorporated as Data Specialties Inc. in 1969, had largely risen to prominence by the 2010’s through its “Automatic Identification and Data Capture” (ADIC) products (e.g., barcode scanners, mobile printers, etc.), which effectively allowed users to capture specific data points into computerized ledgers for tracking. However, Zebra continues to push to become the worldwide leader in what it terms the “Enterprise Asset Intelligence” category, which it defines as providing customers the ability to “Sense-Analyze-Act” through enterprise management and Internet-of-Things (IoT) products1. To succeed in this vision, Zebra will need to effectively pace its product development process to the furious evolutionary sprint of Industry 4.0.

Increased requirements to maintain and evaluate a global supply network, customize products and delivery methods, and to lower costs act as a few of the core forces behind the digitalization of the supply chain. In response, innovators have developed new technologies that can be segmented into eight areas aligned to various steps along the supply chain process according to a 2016 PwC Industry 4.0 report: integrated planning and execution, logistics visibility, Procurement 4.0, smart warehousing, efficient spare parts management, autonomous and B2C logistics, prescriptive supply chain analytics, and smart supply chain enablers2. The takeaway from this is the incredibly diversity of applications, hardware, and consulting support that can and will be required to optimize the supply chains of today and tomorrow, and the importance of visibility into each step of the process. The 2014 Harvard Business Review Article, “How Smart, Connected Products are Transforming Competition,” details the multitude of interdependent strategic trade-offs firms must consider as they purchase open or closed technological systems from providers, and how to frame the decision process of whether to outsource certain capabilities3. Again, this analysis serves to highlight both the complexities and potential rewards for technological service providers that accompany the arrival of Industry 4.0.

In response to the rapid evolution of the supply chain world, Zebra’s management has focused on an aggressive mergers & acquisition strategy to maintain competitive advantage, develop a global footprint, and broaden its product portfolio to become the EAI leader in the short and medium term. Although Zebra’s transformative ~$3.45B acquisition of Motorola Solution’s Enterprise closed in October 2014, the combined organization now nears the completion of its integration efforts, which includes the implementation of an integrated Enterprise Resource System (ERP)4. This newly unified operational and commercial front will allow Zebra to leverage its newfound global stature to create new and deepen existing client relationships. Additionally, Zebra has focused on developing new software products such as the Savannah platform that integrates the outputs of all individual Zebra devices into a unified source of analysis and insight. Zebra’s push to become an end-to-end provider of supply chain solution’s rather than a niche hardware producer will allow it to thrive in a competitive environment of increasing complexity.

In addition to Zebra’s existing cross-selling and expansion efforts, it should continue to develop its Services business line which focuses primarily on maintenance and support. Across Zebra’s 2017 Manufacturing & Warehousing studies, there was an almost uniform emphasis on the need to implement increased levels of automation through core supply operations. Zebra could introduce a new ancillary revenue stream for the company by moving beyond their cutting-edge manufacturing and R&D capabilities to become an IoT and “smart supply” strategist and implementation partner. In addition to expanding service lines, Zebra can continue to adapt its technology to new industries. While it currently specializes in healthcare, manufacturing, transportation, retail, and hospitality, there are other data-heavy industries such as oil & gas and construction that would benefit from increased visibility into their enterprise assets.

As Zebra has pushed to grow aggressively throughout this decade, financially the company barely broke even in 2014, and earned net operating losses in 2015 and 2016. Besides the financial risk, what other potential drawbacks of continued aggressive expansion into new geographies, products and service lines should Zebra consider? Can Zebra afford to focus on consolidating operations and improving profitability in such a rapidly involving industry? As the company fights to keep pace with broader technological change, the question bifurcates into both whether it can and whether it should.

1. “Investment Case”. 2017. Investors.Zebra.Com.
2. “Industry 4.0: How Digitization Makes The Supply Chain More Efficient, Agile, And Customer-Focused”. 2017. Strategyand.Pwc.Com.
3. “How Smart, Connected Products Are Transforming Competition”. 2017. Harvard Business Review.
4. 2016 Annual Report. Investors.Zebra.Com.
5. “Zebra Manufacturing Vision Study 2017”. 2017. Zebra Technologies.
6. “Zebra Warehouse Vision Study 2017”. 2017. Zebra Technologies.


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