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Why you need a plan for augmented reality

Freya Payne

Augmented reality (AR) is poised to unleash a new digital industrial revolution. By revolutionising humans’ interaction with data, it will transform the way companies design new products, serve customers, train their workforces, manage production and compete with one another.

In fact, AR is already here. IKEA use it to model their products in a 3D representation of your home. So does medical-equipment firm AccuVein, which detects and superimposes an image of the patient’s veins onto their skin, tripling the chances of the phlebotomist successfully locating the vein with their first try.

Writing for Harvard Business Review, Michael E Porter and James E Hepplemann explain what AR is, what it can do, and why your firm needs a strategy for it.


AR is about closing the gap between the digital and the physical. It’s about freeing data from the 2D shackles of the flat screen by finding ways to create an interactive digital overlay through which people can interact with machinery, buildings, smart connected products (SCPs), product prototypes and more.


The technology is in its infancy, but already firms are using AR to speed product development, find efficiency savings, cut production costs and add value for customers. Here’s a summary of what AR can do.

1) Helps you see. Power unit and manufacturing controls provider Bosch Rexroth uses AR to enable customers to view 3-D images of multiple configurations of its CytroPac hydraulic power unit. BP combines AR and VR (virtual reality) to run emergency scenarios, enabling operatives to interact with specific variables like ocean currents, temperature and topography to simulate specific disaster scenarios at low cost and without risk to the personal safety of staff.

2) Helps you with coaching. Boeing tested AR, using interactive holograms to train operatives to build an aircraft wing. The technology produced a 35% time saving compared with using traditional 2D training manuals, and boosted the ability of inexperienced staff to build the wing correctly at their first attempt by 90%.

3) Helps you make decisions. Using AR, building systems firm Lee Company enables technicians in the field to access expertise back at base. An AR device allows the expert to see exactly what the operative sees and even to annotate the operative’s display to guide them through the job. Lee Company calculate the savings on labour and travel to be $500 per operative per month, a $20 return on every dollar the firm spent on the technology.

4) Helps you operate products remotely. AR glasses can help workers control machines without using buttons or knobs. The same goes for consumers who, for example, by looking at their oven could launch its heads up control panel, allowing the user to manipulate the controls without physically touching it. Universal AR devices would allow the user to control multiple appliances from a variety of manufacturers. There’s also scope for AR devices to gather data on usage, faults and more, enabling firms to better tailor their products to the needs of individual users.

The Fluid interfaces group at MIT’s AR Lab has developed an app that, when the user points a smartphone at a smart lightbulb, displays colour settings and activates voice recognition software through which the user can change the bulb’s brightness or mood setting.


1) Products and positioning. AR displays negate the need to include buttons, dials and switches into product design, and because AR software is cloud based, it can be tailored to the needs of the user and updated at low cost. It’s a disruptive technology with far-reaching implications for product design, enhancement and placement.

2) Research and development. Holographic display allows engineers to see their designs from every angle, to scale and in context, helping them refine their prototypes. VW uses the technology to superimpose its designs onto prototype models to check for discrepancies. Compared with checking against 2D drawings, AR is between five and ten times quicker.

3) Manufacturing. AR supports machine operators by helping them make the right interactions at the right time. It also collects information which can be used to fine tune machines and processes.

4) Logistics. Picking represents 65% of warehouse costs, and warehouses account for 20% of the costs of logistics. DHL’s warehouse pickers are now 25% more productive thanks to AR technology which helps them work smarter and with far fewer errors.

5) Sales and marketing. Because AR lets the consumer see holographic images of products in situ, it gives them better knowledge and expectations, helps them make the right choice and so improves their level of satisfaction. The technology may eventually make showrooms and shops obsolete.

6) Servicing. AR makes repairs and maintenance quicker and more efficient. Since Xerox implemented AR to connect technicians with experts, it has increased the number of problems fixed first time by over two thirds, and improved its technician’s efficiency by one fifth.

7) Training. AR takes the guess work out of performing new functions. DHL employs many seasonal staff; AR helped it cut the number of instructors it needs to train them, helps new employees work faster and cuts the number of mistakes they make.


1) Weigh the impacts. How will AR affect your customers, products and manufacturing processes? How might you be able to use the technology to enhance and differentiate your products, and offer a better aftersales service?

2) Identify cost-reduction opportunities. If you make complex products, focus on AR as a control and monitoring technology. For retailers, the opportunity may lie in the ability to demonstrate product options. Manufacturers can use AR to control machines, and use feedback to make them more efficient. For all, customisation and control, learning and customisation offer cost-saving potential.

Your AR will only be as good as the data it interprets. To tap into the opportunities offered by AR’s shape-recognition technology, it’s vital to conduct an inventory of your firm’s data sets. What information will existing CAD models yield, and what digital modelling abilities do you need to grow?

3) Create an AR team, or outsource. Is AR likely to impact at the heart of your business? If so, you need to consider the scope of the resources you’ll need to mobilise in order to make AR research and development a core function. Interactive AR is by far the most complex in terms of development; technologies like AR glasses and heads-up displays are still in their infancy, but you must plan for the day they become mainstream.

Smaller companies or those for whom AR is likely to have a less disruptive impact may be able to outsource it to one of a growing number of AR suppliers.

4) Consider implications for communication. Just as the internet radically changed the way we communicate, so will AR. Start thinking strategically about how you will use it to enhance your business – will it be smartphone or tablet based, and how will you transition to heads-up and glasses displays as these become cheap and ubiquitous?


AR promises digital disruption on an epic scale. It’s likely to revolutionise manufacturing, work, the way we shop and how we experience the physical word. By interfacing the digital with the human in a way never seen before, AR combines the power of big data with human dexterity, flexibility and ingenuity. The future is reality-plus, and it’s coming for your firm.

Source Article: Why Every Organisation Needs An Augmented Reality Strategy
Author(s): Michael E Porter and James E Heppelmann