Smart factories, digitization, and the Internet of Things (IoT) are all hot topics in the manufacturing sector, generating considerable buzz—and some consternation. These disruptive technologies are exciting, yet the complexity can also be overwhelming.
But with a practical, incremental plan of action, including options with minimal disruption and low-risk, even those who have been reluctant to embrace next-generation technology can get started on the journey.
Equipment can be modernized, processes upgraded, and new technologies adopted gradually, all while controlling risk. With a gradual approach, manufacturers can turn to edge applications, hybrid solutions, and a phased roll-out to build confidence and gain buy-in from the various teams.
A gradual approach also provides time to establish data security and ensure compliance with modern regulations, like the EU’s General Database Protection Regulation (GDPR).
Where Are We Going, Anyway?
Once your company has moved into the “acceptance stage,” it’s time to decide your goals for your investment and tactics to get there. Most digital technologies, like IoT, are not out-of-the-box solutions you simply plug in. A customized approach is critical. Setting a very well-defined plan with measurable milestones will help eliminate project ambiguity. Focus on building a plan that is practical, doable, and cost-effective.
For many companies, picking one basic goal offers the chance to get started and prove concepts.
Examples of viable Phase One goals include:
· Prevent unexpected down-time and keep shop floor assets running
· Better manage inventory levels with fewer stock-outs
· Meet customer demand for highly personalized products
· Improve customer engagement and build brand loyalty
· Speed time to market of new product introductions
Note that broad goals, like “double profits” or “increase sales” are not on this list, as they are too generic to develop one digital initiative that would lead to success.
Address Funding Issues
If you’re not ready—financially or otherwise--to make a huge investment in IT solutions, you could start small with cloud deployment, which uses a subscription model and thus lacks the large one-time capital investment. It allows you to reap the benefits of cloud computing while protecting critical customer data—and you can move forward while easing anxieties among stakeholders
You do not need to invest in hardware and systems such as servers, security, and back-ups. These are all handled externally, meaning the IT team can focus on other issues, rather than continually worrying about upgrades and back-ups.
Another way to overcome funding issues is to use the savings generated from Phase One to fund Phase Two projects. In most organizations, there are opportunities for easy wins, usually involving deployment of a point solution, that can produce major savings.
Here are some areas where you can quickly see savings:
· Business intelligent tools for tracking real-time results
· CRM solutions to manage customer relationships
· Shop floor scheduling, planning and time-tracking
· Field service management, tracking warranties and service agreements
· Inventory management to improve accuracy
Building the business case is an important next step. Start by prioritizing. There are some prerequisites that are must-have basics for modernizing your operations. You can think of these as your foundation for growth.
· End-to-end visibility
· Attractive, easy-to-use interfaces
· Self-service reporting, workbenches and dashboards
· Mod-free. The days of heavily modified software are over
The nice part is that these elements can be achieved with one modern ERP solution, whether your existing ERP or an upgrade.
Should You Go Bigger?
Some aspects of digitalization require a leap of faith. Some manufacturers are building new revenue streams and business models. Servitization is an example. Offering the product as a service or outcome-based solution—rather than selling the product—is gaining traction in some industries, especially ones where the traditional product is high-value, like cranes, tractors, and road building equipment. But, this often requires new strategic thinking and the integration of unfamiliar technologies.
Deciding whether to increase services and/or scale can be a difficult decision—one that can be made easier by taking hold of the competitive landscape. Seeing that competition is expanding rapidly and prioritizing innovative thinking will force your organization to quickly adapt.
But instead of focusing on other companies, better to prioritize the customer—analyze their needs and provide solutions. For example, if the consumer expects Amazon-style fast-tracked, two-day shipping and delivery, then companies need to adopt strong supply chain management software that digitally connects the moving pieces of their business. With complete supply chain visibility and real time insights, organizations can not only have better control of their product, but also provide control to the customer, allowing them to track progress in real time.
For customers seeking specialized customization, companies can leverage existing data by applying smart analytics and AI to determine and predict customer needs on an individual basis. These digital tools have the capability to gather relevant past information and produce needed insights, such as purchasing patterns and potential influxes or downturns in the market.
It is an exciting time to be in manufacturing. The multitude of opportunities and technology options can also make it overwhelming. But, with a pragmatic view, manufacturers can transgress common barriers, set realistic goals and find funding to make innovative ideas come to fruition.
Nick Castellina is director, Industry and Solution Strategy, Infor.