Steve Halama
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Survey Says: We've Reached a Digital Tipping Point

March 30, 2021
Seasoned ERP executive shares his insights into pandemic's impact on manufacturing environments.

The pandemic unquestionably impacted industrial operations. The question is how exactly manufacturers responded. To find out, ERP solution provider SYSPRO surveyed industry professionals at different managerial levels within the United States, Canada, EMEA and APAC.

Some particularly interesting results included:

  • 73% of businesses had invested in technology to facilitate remote working
  • 60% of business were impacted by supply chain disruptions
  • 42% suggested they will consider reshoring to overcome supply chain disruptions and ensure supply-chain resiliency.
  • Companies are shifting focus away from cost and efficiency control towards certainty and quality.

“The overall finding of the survey was that manufacturers are looking to digital transformation (DT) to remain resilient and are accelerating their DT roadmap as a result of the impact of the pandemic,” says SYSPRO USA CEO Geoff Garrett. 

Read on for Garrett’s insights into the results.

IW: In what ways has the pandemic been a priority reset for manufacturers?

Garrett: We’ve seen manufacturers accelerate their digital initiatives as a result of the pandemic. IDC released a report at the end of 2020 that indicated that more than half of the manufacturing companies they surveyed shared that they fast-tracked or moved their digital initiatives roadmap up an entire year.  We saw that same trend within our own survey.

Many manufacturers have also had to evaluate their ability to handle a hybrid workforce, while also navigating the risks associated with COVID for those team members who still need to work onsite. Manufacturers can't just shut down their production lines, so they are now having to think out of the box to keep production going – like how can I keep production volume high while still socially distancing employees? This is where the focus on and acceleration of digital transformation also comes into play.  

IW: Where should manufacturers focus their digital transformation efforts?

Garrett: This directly correlates to their business growth strategy. If a company’s growth strategy is to enter new markets or increase a specific revenue stream, how can they implement digital technologies to meet these goals? They should focus on aspects of their business where they can implement digital transformation to accelerate revenue growth. For example, many of our customers are manufacturers and distributors, or they are distributors and they have an omni-channel model where some of their sales are via an agency, another distributor or direct to market. In an environment like this, companies can use digital transformation strategies to create an automated self-service business engagement model.

Another important area of focus is to focus on suppliers. Digital transformation within the supply chain is about accelerating the requirements planning process and ensuring you are receiving stock in time. COVID-19 disrupted many supply chains, especially with the large number of ships queuing at ports. Long Beach Harbor is a prime example, as 2020 was its busiest year in history. Manufacturers and distributors are having trouble getting their stock into ports, so they now need to re-strategize to determine how they can mitigate the risk of a similar disruption in the future. Where can they speed up their supply chain based on what they can control?

Better visibility into their supply chain with technologies like supplier portals gives two-way visibility so both parties can make informed decisions based off of dashboards, allowing them to be far more proactive in their planning. 

IW: What best practices should manufacturers embrace as they undergo an accelerated digital transformation process?

Garrett: Ensuring strategic focus and alignment of IT with key stakeholders. Digital transformation spans more than just technology. Our SYSPRO customers who have had success with their digital transformation efforts have executive-level team members collaborating with IT to drive digital transformation. Manufacturers must transform both business processes and the application of technology with a forward-thinking view, always keeping their end goal in mind.

IW: What missteps do manufacturers need to be aware of?

Garrett: Automating existing processes as they currently stand is not necessarily going to generate results, even if the digital transformation process is accelerated. Digital transformation is about more than just implementing technology.  With any digital transformation project, companies need to re-think business processes and be prepared to change them.  All aspects of the business need to be taken into account.

The survey we recently released found that more than half of the customers surveyed are now looking at dual sourcing. This is a good strategy. If the focus is entirely on lowering costs, that’s going to be of little value that low-cost supplier can’t deliver, and you can’t ship the product. Dual sourcing will allow manufacturing and distribution companies to be much more flexible if something occurs that is out of their control.  There’s truth to the old saying, “Don’t put all your eggs in one basket.” 

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