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How Digitization Is Driving New Business Models For Manufacturers

How Digitization Is Driving New Business Models For Manufacturers

Manufacturers are no strangers to embracing new technologies. In fact, with the industry has been on a journey of operational…..

excellence for the last 30 years, it could be argued that it is better placed than most to survive and thrive in the digital revolution.

Yet, while this heritage of innovation is a great platform from which to build, there’s a “but” — it involves how manufacturers have employed new technologies in the past.

Manufacturing 3.0 focused on creating consistent, repeatable processes — from product development to manufacturing to logistics — to boost productivity and reduce costs. Remember in the early 1980s, when “digital” essentially meant using a programmable logic controller for high-reliability assembly?

Now, though, rapid digital advances mean manufacturers can do more than simply achieve a new level of efficiency. They can drive a growth agenda, too. In other words, technology has moved on. Manufacturers must move with it.

A changing industry

With digitization now across all sectors, focus is shifting away from working better and toward working differently. Rather than cost-cutting and efficiency, the value system for today’s manufacturing industry is based around ecosystems that are data-driven, cloud-enabled and platform-centered.

In response, manufacturers need to shift their thinking when it comes to their supply chain, moving away from the traditional linear model of supply, manufacture and distribute, in which different companies “own” a dedicated part of the value chain. Instead, they must now move toward a networked, connected model in which all data is in the cloud and accessible to the entire value chain at once. In this model, when an event occurs in the supply chain, everyone can see it and work on it simultaneously.

People power

Rather than hardware, much of this, in fact, comes down to people. That starts with customers and the need for manufacturers to harness new technologies, like data analytics, to enhance and streamline their purchasing and after-sales experiences.

Similarly, a laser focus on employees is required. Rather than thinking in terms of productivity gains through automation, manufacturers should consider a more skills-based model in which technology is judged according to its ability to augment the capabilities of workers. Or, put another way, how human plus machine can deliver superior outcomes to one or the other on its own.

Think mobile

Here, the combination of data and mobile technologies can have a real, positive impact. Why? Because it allows manufacturers to get the right information to the right people at the right time. This, in turn, makes for faster problem-solving and smarter, more informed decision-making — from the shop floor and the engineering department right through to the CFO’s office.

A great example is Procter & Gamble’s “decision cockpits.” Already renowned for its ability to drive productivity and efficiency, the organization is now acting on the need to empower employees at all levels through data. The cockpits take the form of real-time, one-stop screens displaying the current state of the business and any important trends. This data is accessible to all employees at any time, helping them stay informed and engaged.

The steps to digitization

Of course, not every manufacturer has the resources of P&G. But whatever a business’s size, shape or operating legacy, there are some simple steps it can take to become a networked, digitized business and, in doing so, ensure it meets the expectations of customers and employees alike.

What’s more, businesses don’t have to rip out their existing infrastructure and start again from scratch. Rather, this is about introducing new technology-enabled solutions that build on what they already have in place.

  1. Get a strategy to move your data into the cloud and start benefiting from the scale and low-cost infrastructure this offers.
  2. Foster a culture of continuous learning and improvement in which all staffers are empowered to experiment with and shape new technology solutions.
  3. Be customer-centric, not cost-driven. Ask, “How can we use new technologies to enhance customer experiences?” This will deliver greater business growth.
  4. Look beyond leveraging data for asset management. Consider how it can be used to enable your people, augmenting their productivity, skills and value.
  5. Harness the power of mobile technologies to make your data and insights constantly accessible to employees to help them make better decisions.

Time for action

Undoubtedly, digitization is changing the face of manufacturing. Yet, along with the inevitable challenges, this is unlocking great opportunity.

By taking some of the steps outlined above and harnessing the potential of emerging technologies, manufacturers can evolve from the linear, cost-focused operating model of the past to become the fully networked businesses of the future. This, in turn, will deliver better experiences for customers and employees, while boosting productivity and efficiency.

What’s more, though change is rapid and far-reaching, it does not require companies to completely overhaul their existing infrastructure. Instead, it’s about building on the great operational table stakes of the past to go to the next level of performance. The tools are there. The time for action is now.

Source: Forbes
Author: Lisa Caldwell