Re-produced with kind permission of Manufacturing Management Magazine
With global industry business leaders recognising the increasing importance of digital technologies, it’s imperative that manufacturers join the next revolution, or risk being left behind, say Azzure IT.
Manufacturing, as an industry, has traditionally been seen as slow to change, especially when it comes to the latest business solution technology and the ‘Fourth Industrial Revolution’, for instance. Craig Such, managing director of Microsoft Dynamics 365 support partner, Azzure IT, explains that this is due to the nature of the work involved. “The fact that manufacturing is lagging isn’t deliberate, it’s just because of the nature of the industry,” he says. “In manufacturing, people are undertaking hands-on, practical jobs. They’re not afraid to put the hard work and long hours in to get the job finished. Other industries, which are more immersed in technology, are looking to the Digital Transformation as a means of seeking ambitious, new commercial opportunities and productivity is a by-product of that.
Attitudes are changing
However, these attitudes are beginning to change amongst manufacturers, continues Such. “We’ve done market research in the sector, and over 80% of the respondents have said that IT and digitalisation is either important or very important,” he says. “Without technology, they believe that there is very little they could do to take their business forwards. In practice, there’s still a way to go though. Fewer than 10% describing themselves as an early adopter of technology, while over a third would say they are in the late majority.”
Added to this is research by Gartner (http://gtnr.it/2uzlgEi), which found that CEOs believe digital transformation is the second biggest driver for their businesses going forward – a trend that is only set to increase. “A successful business has to be able to exploit digital technology to make themselves more productive and differentiate from competitors.,” says Such. “For everyone, the use of digital technology is increasing in our day-to-day lives. This means there is also a huge volume of data that can be captured and utilised. By using that intelligence, leaders can maker quicker or more effective decisions – making their company more proactive and agile.”
Azzure IT’s survey also revealed that the biggest barrier for manufacturers looking to adopt digital technologies wasn’t finances, or buy-in from senior management – it was time. “Manufacturers tend to look at improving existing ways of working rather than putting aside time to look at how technology can transform ways of working,” says Such. “Once business leaders take the time to engage with next generation business applications, they can easily identify the productivity and commercial opportunities”.
“Benefits aren’t just constrained to the shopfloor”, continues Such. “While their products coming off the lines may be world-class, manufacturers may struggle with aspects of business operations, such as real-time business analysis, responding quickly to evolving customer demands, improving utilisation of stock or resources, and seamless integration with ecommerce and sales. Technology can get you from where you are today to where you want to be.”
A need for education
Such believes that these benefits may be lost on manufacturers, especially smaller ones. “Many manufacturers simply need more support to make these decisions and realise the potential of technology,” he says. “At Azzure IT, we host regular events so manufacturers can benchmark and re-imagine their business. When we first speak to a customer about how they can improve their business, that’s when we can get specific; we learn about the company, their real-world challenges, their successes and their vision for the future. From there, we can easily demonstrate how a complete end-to-end business solution will have transformational benefits.”
Smaller manufacturers are being put off investment by a perceived level of complication, and high-level terms like the Industry of Things (IoT) and the Fourth Industrial Revolution, adds Such. “Keeping it simple, smart, digital applications are now levelling the playground for small manufacturers, providing enterprise-level capability that is easy-to-use, out-the-box, scalable and cost-effective”.
“One of our clients recently said to me ‘forget the internet of things, a real-world challenge for small manufacturers may be simple shopfloor data capture,’” he says. “They wanted to collate data on the shopfloor to be able to see where how jobs were progressing. They were using machinery that was 30 years old – there’s no way they could use the latest IoT-ready technology on that. They invested in mobile devices, on which workers were able to log jobs as they progress through the factory. One digital transformation has modernised their business – they can give finance, customers and managers real-time updates on how the job is progressing, whereas before, it would mean someone from the office going onto the shopfloor to work it out.”
Invest, or beware the consequences
Ultimately, however, all companies will have to invest in technology in order to keep-up in today’s changing digital environment. “If we look at the uncertainty surrounding things like Brexit and other social-demographic changes, they also have the potential to bring great opportunities for some businesses, but only the ones that are forward-thinking and agile,” says Such. “We only have to look back to the economic crisis a decade ago to see that the companies that managed to survive the downturn and come out the other side were the ones that were able to adapt to the changing markets. Not everyone was directly impacted by the downturn – the ones that were, were because of their slow-to-adapt approach.
“This is the same in the digital revolution – businesses that are willing to engage with the digital transformation are the ones we’ll see grow. There’s already a lot of research that shows that small businesses, that invest in technology, grow quicker than those that don’t. Companies that don’t embrace it will still be around, but will be lagging in their digital transformation and struggling to exploit emerging opportunities”.
The next commercial opportunities are digital. You must make the decision: is your business moving forwards seeking out digital opportunities or are you waiting, treading water and eventually running out of commercial energy. Digital Transformation is coming, and it’s imperative that all manufacturers get involve, learn, adapt and grow, before it’s too late.”
Better production planning: anticipate changes in demand, supply and manufacturing capacities
Gain better insight and understanding of the business: efficiency and cost savings
Streamline and automate production processes
Use and share information with vendors and suppliers
Improve utilisation of stock and resources
Reduce stock holding and improve customer service
Track stock all the way through the manufacturing process including inventory control
Control operational costs: make smarter buying decisions
Better manage regulatory and governmental compliance
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