Understanding 5 Critical Junctures In Manufacturing
The face of manufacturing is changing worldwide. Manufacturers need to adapt according to the shift in customer demand and buying patterns. With the emergence of smart products, the manufacturing industry needs to explore more methods to create and capture value. Smart products aren’t enough to say that a company has transformed digitally. True digital transformation is about improving the company’s internal and external processes by making them digitally mature. From how managers measure sales to how the assembly line workers handle their part of the job, the focus should be on a factory-wide digital makeover. This is because there is a strong relationship between an organization’s success and its digital maturity, or we can say the extent of digital transformation.Even though digital transformation is more about survival than growth today, some manufacturing units are reluctant to get on board. Let’s find out the reasons and how to overcome them with technology.What’s Holding the Manufacturing Industry Back
Siloed Mindset and Behaviour
According to the TEKsystems survey, the complexity of the current environment and siloed mindset are the top challenges facing digital transformation for manufacturing companies. This is because the manufacturers and the workers think that the immense effort required for this transformation is not worth the potential gains. This needs to change because companies that don’t leverage technology risk losing market presence, value, profit, and revenue. How to Overcome: Move ahead with the digital transformation in three stages;- Planning: Begin your digital transformation efforts from scratch or during “business as usual.” The planning stage is about understanding the scope and perspectives. Find answers to how digital transformation can change your manufacturing processes. Knowing this will help you identify and set objectives.
- Piloting: Business as Usual defines the status quo, but under piloting, you need to start with digital transformative processes, albeit with a few departments, before moving to complete overhauling. One important aspect of piloting is choosing the right set of technologies. Your choice of technology relies on the requirements of your organization.
- Rollout: You must roll out with a flexible plan that can be reiterated according to requirements. For best results, break out the entire plan into tangible components. Set meetings to discuss the results every week or in a month. Make changes where required and scale the rollout in areas where you have achieved the intended results. Most of the time, the employees resist because they may not be skilled or confident enough to work with the advanced software. For this, you can provide in-house upskill and reskilling programs that can help the employees learn and grow with the company.
Source: TEKsystems Integration of Existing and New Systems
When an organization undergoes digital transformation amid resistance from the internal departments, integration among the systems is not easy. Integration of different departments means sharing of data and strategies. For instance, the new sales strategy or sales forecast must be built by including the inventory, production, and other relevant departments. Here, data sharing and working together can be a bit troublesome and must be addressed. How to Overcome: Reduce the number of exclusive tools and bring them together on a single platform wherever you can. The purpose is to minimize the number of individual systems to store the organizational data and retrieve the same quickly. But this should not be done in haste as it will do more harm than good. Furthermore, businesses can adopt cloud technology to streamline inter-departmental collaboration. Organizations that are ready to push forward with digital transformation are 2.2x more likely to move their sales and system operations to the cloud.Changing Customer and Buyer Preferences
The shifting customer demands thwart a manufacturer’s effort to innovate and become better, especially if they are doing so without using technology. The customer’s changing behaviour and preferences make digital transformation a difficult nail to hammer.
Source: BusinessRealities How to Overcome: Manufacturing industry units need to use appropriate technology and digital platforms. Many software and solutions are built to help organizations understand the shifting customer demands and work for the manufacturing industry. AI-based solutions can also predict the customer’s shifting demands and help improve the entire supply chain. Besides building an effective supply chain, demand forecasting provided by AI-based systems can also help companies predict better outcomes. Demand forecasting helps address the demand and supply gap in advance and procure the materials accordingly and take care of inventory management. Having tech-enabled systems in place will help you cater to the customer’s preferences and improvise product delivery. Costs
There is a strong possibility that many organizations in the manufacturing industry are not moving toward digital transformation due to high costs.
Source: PTCThe image above shows the cost of digital transformation (DX). 21% fear the high and unforeseen costs, while 13% of organizations lack a dedicated funding source, according to the TEKsystems survey. How to Overcome: Start by making a plan and creating a cost estimate. You can choose to work with the SaaS model (Software-as-a-service). SaaS solutions help with the structural changes in the workplace by helping you leverage technology. SaaS solutions are more flexible and help you change according to customer behaviour. Moreover, the SaaS model cost structure is approachable and aligns your digital transformation efforts with your budget. In addition, SaaS solutions are on the cloud, allowing even smaller organizations to work on their digitization efforts without investing much. Consider the factors given below for choosing an appropriate SaaS solution for your organization. - Ability to scale
- Past performance
- Security and encryption
- Cost structure
- Accessibility
- Device compatibility
Product Planning and Development Process
The need for digital transformation in the product planning stage arises because 54% of the product development teams lack the tools for data tracking and analysis. It is because they neglect the need for such systems and still rely on age-old technologies. Believe it or not, only 9% of the companies have integrated cloud-based systems for the same process. How to Overcome: Such companies can use AI and machine learning to learn about new products and lead them to commercialization. They can analyze data pertaining to modifying products, listen to consumer feedback, and ensure proper risk management. Data analysis and inference are at the forefront of designing and developing new products today. Dedicated design teams are using new-age solutions to interpret the data gathered from numerous sources. Manufacturing units can move forward from the age of making spreadsheets and surfing through hundreds of emails towards a better and more integrated solution. Using digital transformation techniques can also help you collaborate with social chatter to better understand the customers and the market. As they know more about the end-users, the product design and development teams can design and build better products aligned with the customer’s requirements and preferences through such transformations.Conclusion
Businesses in the manufacturing industry are keen to use digital transformation for new service offerings (86%), demand planning (56%), aftermarket solutions (82%) and more. But with challenges posed from within and outside the premises, not every organization can harness the fruits of digital transformation completely. The barriers can be overcome by using the same technologies that pose a “supposed” risk to the industry. One must align the company vision, culture and structure with upcoming technologies and build a system around these values for better results.
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