Disruptions to the supply chain have brought to light the need for digital transformation. Businesses, customers, and media alike are left wondering, “How can the supply chain be improved to better prepare for the potential disruptions?” Yet, despite the call for increased visibility, awareness, and transformation in logistics, manufacturing is often overlooked.
In today’s world, manufacturers are trying to find ways to do more, with the same resources. Industry 4.0, digital transformation, and smart manufacturing promise to bring change by digitizing and automating processes, eliminating the tedious, overtaxing, manual processes manufacturers have too long relied on, and granting access to real-time data.
For decades, manufacturers have run companies with manual processes. The influx of technologies aims to change that. IBM explains this transformation as leading to “increased automation, predictive maintenance, self-optimization of process improvements and, above all, a new level of efficiencies and responsiveness to customers not previously possible.”
“Smart manufacturing is the “intelligent, real-time orchestration and optimization of business, physical, and digital processes within factories and across the entire value chain. Resources and processes are automated, integrated, monitored, and continuously evaluated based on all available information as close to real time as possible.” – MESA International
80% of Plex’s State of Smart Manufacturing Report survey respondents believe smart manufacturing is a key to their organization’s future successes, yet one problem remains. Automation is an ideal state; manufacturers often are left wondering how to achieve it and where to start. Embracing and successfully implementing automation is simply a dream… without a plan of action, leaving many to continue operating with very little real-time data, manual processes, and no insight into how to effectively improve. Manufacturers need data to even begin the journey. Data determines where to add automation and where it can help to improve existing processes.
So, that begs the question, “How do manufacturers achieve digital transformation and automation that includes a plan of action?” They don’t. If a manufacturer doesn’t have the data they need to begin automating, where do they start?
“20% of every dollar spent in the [manufacturing] industry is wasted – adding up to $8 Trillion, or 10% of the GWP,” Anna-Katrina Shedletsky, CEO of Instrumental, writes. In fact, this is “money that was spent that arguably, didn’t have to be spent due to inefficiencies in the process of manufacturing things.”
Inefficiencies (and manual processes), as Shedletsky points out, are causing many, many problems, preventing the manufacturing industry from evolving and growing. In fact, the promises of technology have failed to solve the biggest problem of them all. Manufacturers simply don’t have the RIGHT tools to solve the RIGHT problems, with the RIGHT data.
Manufacturers haven’t had the right technologies in their hands to solve the problems. They haven’t had the ability to efficiently collect data that would give them the ability to reduce inefficiencies and eliminate manual processes. Without data, automation is a pipe dream.
Instead, manufacturers have relied on technologies that are too cumbersome, too complex, too problematic. At the end of the day, most manufacturers default back to what they know – manual processes. It’s worked for years, with the caveat that manufacturers are wholly unaware of anything happening in real-time until it’s too late. But, is it the most reliable, efficient way of operating? Far from it.
Deloitte explains, “innovation enabled by exponential technologies can help manufacturers grow faster, be more agile, and unlock new forms of value.” To do this, however, manufacturers need solutions that solve the core problem. And, to do that, they need the right technologies in their hands.
“The global workflow management system market size was valued at $6.85 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 30.6% from 2021 to 2028. These systems optimize automation, workflow, and processes, thus reducing the need for unnecessary rework and manual effort,” stated in a report published by Grand View Research.
This white paper focuses on the need for the right technologies and why it’s a topic of conversation to be had, now, rather than later. Let’s dive into:
Unless there is another black swan that comes along and the economy takes a nosedive, manufacturing is only going to continue to grow, innovate, and evolve. Coupled with the reinvigorated focus on reshoring, digital transformation is not going to stop. As many companies move manufacturing operations closer to home, there will be a greater need to monitor and automate processes.
There is immense opportunity for the right technologies to transform the industry, eliminating the reliance on manual processes and incomplete data once and for all.
Digital transformation has become a bad word in manufacturing. Despite the growth manufacturing will experience in the coming decade, the conversation about growth and how it will be achieved is ignored or rejected.
Disruptions to the supply chain have brought to light the need for digital transformation. Businesses, customers, and media alike are left wondering, “How can the supply chain be improved to better prepare for the potential disruptions?” Yet, despite the call for increased visibility, awareness, and transformation in logistics, manufacturing is often overlooked. It is a key piece of the puzzle, though.
Problems businesses in the supply chain and logistics industry have faced in recent years are eye-opening, but the question remains. Why is digital transformation in manufacturing overlooked when the two are so interconnected?
Without manufacturing, the supply chain doesn’t exist. In reality, the two industries should be improving at a similar rate. The drive to improve manufacturing should mirror that of the supply chain industry. Yet, improvements in technology, access to data, and automation in manufacturing fall short.
Consultancy companies like Deloitte and McKinsey have been talking about the changes needed to improve the entire end-to-end supply chain, specifically in manufacturing, for years, yet little has changed. In fact, manufacturers have tried to transform entire organizations, but these projects failed miserably. Rather than starting small, the transformation was too broad, did not have a clear, attainable goal, and showed a dubious return on investment (ROI). This has scared many others from attempting to digitally transform their own organizations, inevitably establishing the manufacturing industry as behind the times, unable to keep up with the changes happening in other areas like the supply chain.
That is to say, digital transformation is important. It just needs to be done right.
The fact is, so much conversation focuses on the digital transformation of the logistics industry because digitally transforming manufacturing is a much harder problem to solve.
The global supply chain is controlled by a handful of companies. Whether it’s the people that own the boats, containers, railroads, or trucking companies, there is simply less competition. There are dominant players in the market, with similar processes. The same cannot be said for manufacturing. It is always going to be unbelievably fragmented. There is no commonality. There is an almost infinite number of products that can be produced. This of course leads to more difficult, more complex problems to solve.
There is so much uniqueness in the world of manufacturing, with varying levels of processes, all dependent on the product being made. That not only leaves manufacturers lagging behind their logistics counterparts in terms of digital transformation but leaves a gaping hole in the efficiency of the end-to-end supply chain. It’s incredibly fragmented.
If there is widespread adoption of technologies that make manufacturers more efficient, the supply chain naturally becomes more efficient as a result. We can all see the benefits of increased efficiencies after the misfortunes the entire supply chain network endured these past few years. But, in order to get to that point, manufacturing needs an overhaul. The conversation of digital transformation needs to be had, automation needs to be put in place, and the data needs to be collected and contextualized for it all to work.
Supply chain and manufacturing work together, this much we know. Without one or the other, the entire process falls apart.
What’s the point of an automated, well-executed supply chain, without visibility into the manufacturing processes? Only one industry has improved. If manufacturing lags behind, a lack of visibility into the end-to-end supply chain still exists and digital transformation is only half as efficient.
That brings about the importance of automating processes in manufacturing. Manufacturers have too long relied on manual processes, prone to error and inefficiency, and unreliable or stagnant data.
There are substantial challenges plaguing the manufacturing industry. Without improvements, manufacturers will fail to grow, slowing down the entire end-to-end supply chain.
Manufacturers often lack the visibility not only to run the company on a day-to-day basis but what’s happening on the factory floor. Without visibility and data, it’s difficult, if not impossible, to automate processes, leaving manufacturers to work with their outdated, tedious manual processes.
This is everything manufacturing productivity software aims to solve – providing visibility and eliminating manual processes. By providing visibility, manufacturers are able to tackle their problems, improve, automate where needed, and save valuable time and money. With the right technology, the problems are solved, creating an equal partnership between logistics companies and manufacturers, driving efficiency around the globe. Everyone wins.
There is immense opportunity for the right technologies to transform the [manufacturing] industry, eliminating the reliance on manual processes and incomplete data once and for all.
Why hasn’t this been done? Why can’t manufacturers keep up?
Software solutions have long existed in manufacturing, that’s no secret, but the traditional solutions have left a gaping hole. There is no visibility into the factory floor.
Either manufacturers were left to solve problems with pen and paper, whiteboards, or the ever-challenging Excel spreadsheet or they had on-premise, incredibly complex software systems that inevitably provided benefit to the back-office, yet ignored the plant floor. There was very little data to work with, if any at all. If it did exist, it wasn’t real-time. These systems were expensive, didn’t grow with the company, and only focused on planning for the future.
Advancements in technology have changed that.
Now, technologies enable manufacturers to know what is happening right now, in a user-friendly way. Real-time data reflects the most valuable insights into the factory floor, and with that data comes visibility into where processes can be improved and automated, reducing the need for reliance on manual processes.
Before, manufacturers focused on what would happen in the future. Often, this came in the form of Enterprise Resource Planning (ERP) systems with add-ons like Manufacturing Execution Systems (MES) or Business Intelligence (BI) tools, too. There was virtually no insight into what was happening on the floor in real-time.
All that to say, these types of manufacturing software have their place. At a certain point, every company needs an ERP system. An ERP is designed to plan for the future and keep track of history, but it fails to capture the “now” on the plant floor. It’s all in the name – planning. An ERP is designed to help the back office plan for the future.
Another popular software, the MES, is designed to control the process, which works in some segments of manufacturing, but for most, it does not because manufacturing is inherently a constantly changing industry.
BI tools have their place in the industry, too, producing a specific report for business analysis, driven by historical analysis. Often, this is in the form of financial forecasting, asset management, top-line productivity data, or predictive analytics through human or machine-learning data analysis to provide an operational view of the company and its financial inputs and outputs. Again, very helpful for its intended purpose, but it offers very little benefit to understanding what’s happening on the plant floor in real-time.
All of these systems, and many others, either serve a purpose in the back office or once served an outdated purpose that is better left in the past. The existing systems are too rigid, too limited, or too complex for the plant floor. They are often built for the largest manufacturers on Earth, not the many, many manufacturers who fall into the small-to-mid-size category. That alone makes the tools virtually useless to the majority of manufacturing companies.
The manufacturing industry is not lacking in manufacturing software, but what is lacking in one specific software category dedicated to providing visibility into what’s happening right now to manufacturers of any size.
Mingo and other technologies in the manufacturing productivity software space are focused on productivity and performance. The goal is to solve problems, reduce manual work, increase access to real-time data, and provide visibility, in real-time.
Though the problems manufacturers face are nothing new, advancements in technology to solve those problems are revolutionary. With increased access to technology, widespread SaaS adoption, and an ecosystem that makes barriers to entry smaller, manufacturers are now able to adopt software that solves for visibility, real-time data, and manual process challenges. The technological advances have opened doors for organizations, providing insight into every step of the process; a true end-to-end supply chain.
In an ideal world, the manufacturing productivity software that makes real-time data collection, automation, and visibility possible in manufacturing and beyond is connected through seamless infrastructure. The technologies that make manufacturing more efficient like ERP, order management, and productivity, seamlessly integrate with supply chain software, giving companies everything they need to efficiently run within one central location.
Yet, that single source of truth is the missing piece.
For example, an ERP needs to plan and forecast products to be made, which then feeds that schedule into manufacturing productivity software. The productivity software understands production numbers every day, every week, and every month, and specifically, where the losses are coming from. But, that data needs to feed into an inventory system. That inventory system informs the supply chain software when products will be shipped, which in turn tracks the product. Supply chain software needs to communicate back to the ERP and productivity systems to help manufacturers plan for and hold manufacturing capacity while waiting on product delivery.
The diagram of the end-to-end process is a very interconnected web of different types of software for both internal and external purposes. Manufacturers need that visibility into every step of the process, especially today as supply chain problems compound.
An example of one industry that does this exceptionally well is the automotive industry. Their supplier connectivity journey is efficient, ensuring that every process is automated and visible. POs from the automotive company go out automatically with estimated production numbers. As it gets closer, those numbers are firmed up. The vendor will transmit back what’s been completed, when, and provide a projected delivery date. It’s a completely interconnected system between the manufacturer and its suppliers. This has been happening for decades, yet, there is one gap, despite the level of connectivity – it’s not at all connected with the factory floor.
This kind of connectivity needs to exist across the board, including the factory floor. Yet, it doesn’t.
There are arguments that this already exists, but in reality, day-to-day manufacturing activity happening on the factory floor happens in a silo, only connected through manual reporting and less than timely data.
Which leaves many wondering, “Why hasn’t this been done before?” It’s a valid question, and the honest answer is that it’s very, very difficult to do.
The biggest problem is that all of this has been really hard in the past. Each company is having to produce reports, gather data, understand capacity, and lead times manually. It’s a huge gap in the middle of this pretty automated, interconnected web of supplier-customer relationships.
So while most manufacturers have an ERP system, with an inventory or warehouse management system likely embedded within that ERP system, the black hole is the lack of visibility into the factory floor. For manufacturers to provide updates on product delivery, it’s done manually. For the supply chain, this creates delay and inefficiencies.
This raises a point of discussion. If supply chains are brought into the 21st century, embracing digital transformation, IoT, and Industry 4.0, what’s the point if manufacturers are lagging behind, making the advancements in the supply chain null and void?
Manufacturing productivity software provides the biggest opportunity for achieving digital transformation in both manufacturing and logistics. That opportunity comes in the form of automation, real-time data collection, and visibility.
There’s unlimited demand right now for certain products which means there’s a massive revenue opportunity for manufacturing companies. How can manufacturers capture that? The answer lies in the ability to improve processes and understand what’s happening on the factory floor. What can be done to sell more?
That all lies in the point of this white paper – real-time data, automation, and visibility.
The company that can do those things, wins. The one that can deliver the product on time, wins. That’s a massive opportunity. It boils down to understanding what’s happening on the floor to understand what can actually be sold and when. Manufacturers need to know what they can make. They need to know what the real lead times are, promising reality, rather than fiction, to customers. The one that can keep up with the ever-changing needs of the economy, wins.
Before now, the factory floor has been a black hole.
If manufacturers know, at a more granular level, what can be done, it makes it easier to plan. It makes it easier to promise things to customers. Does a new machine need to be purchased to increase capacity or are there efficiencies that can be done to improve an existing one? If automation was implemented, how much faster could processes run? If real-time data was accessible, how many problems could be solved before they become crises? How much better would the plant run?
The real opportunity for growth is rooted in four areas:
What if manufacturers had better access to the information needed to make vital decisions, based on facts rather than gut feelings and anecdotes? Instead of basing decisions on old, outdated data, manufacturers are able to make real-time, timely decisions to keep the floor running and deliver products on time to customers.
But, in today’s world, most manufacturers don’t have access to timely data. When this happens, delivery dates are delayed, which also delays any downstream jobs. One missed delivery date may not be the end of the world to some, but eventually, all of the small mishaps contribute to a much, much larger problem. To put it frankly, the process is a house of cards. We saw this with Covid. One little thing becomes disrupted, and everything else implodes.
Manufacturing productivity software will ultimately bring much needed improvements to the manufacturing industry. To recap:
Manufacturing productivity software like Mingo has the ability to transform the industry as we know it. Reach out to us if you want to learn more.