How can technological advancements in the industry help companies meet obstacles head on?
As the prominence of manufacturing, logistics and supply chains and their role in maintaining business equilibrium became evident during the pandemic, exposing how crucial the industry’s function is, the sector has seen some ups and downs, impacted by further economic disruption, geopolitical shifts and change.
Now widely recognized as “the lifeblood of our economies”, more attention is focused on how manufacturing can become even more robust and futureproofed to not only stand the existing storms but become more resilient in the face of yet unknown challenges.
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With the rise of Industry 4.0 ushering smarter manufacturing through technological advancements, the sector now has larger than ever before potential to fulfill its goals, as powered by ERP.
Manufacturing challenges – geopolitics and the image problem
Following the pandemic, the next crisis impacting manufacturing and supply chains has been the Red Sea crisis currently seeing more than 60 merchant and naval vessels in the Red Sea hit by air strikes by the Houthi movement linked to the Israel-Hamas war.
Despite a time lag of direct impact to supply chains, Steve Fearon, president of northern Europe at Forterro, shares that all of these disruptive events outside of the usual operational challenges in organizations are becoming a part of a “larger desire for the sector to have better visibility of its stock availability to promise that demand,” especially in the face of competitive pressure in the industry.
“So things like the ability to deliver, the speed of delivery and meeting those service levels can be a very quick switch for the customer relying on you as a supplier or they can go somewhere else. So that competitive pressure increases and acting on it is something really high on the agenda right now,” he says.
But Fearon emphasizes that it’s a mixed bag of considerations and challenges currently sitting on manufacturers’ plate: “If you just think about it in a manufacturer’s terms, you’ve got somebody who in a day has to manufacture or assemble certain items. They need the right level of stock and materials to build that. They can’t afford once they’ve produced that to then run out of stock because they didn’t understand where the demand was coming from,” he explains.
That’s what makes the visibility and joining up of those various components in the supply chain so essential. Similarly, the manufacturing industry could be seen battling a long-rooted problem with its image and attractiveness to young talent.
Amid a myriad of challenges, the industry is also not immune to labor shortages and lack of motivation for young talent to embark on manufacturing jobs with nearly a quarter of the sector’s workforce being aged 55 or older in America as of 2017, according to the National Association of Manufacturers.
Often seen as an “old and traditional industry to be in,” Phil Lewis, SVP solution consulting, international at Infor, thinks manufacturing needs an image rebrand as many of its businesses are not old-fashioned or stuffy at all – “If anybody walks around the factory of Ferrari, for example, or goes to see the new Tesla factory, they’re gonna be blown away as it is incredible to see what these manufacturing organizations can do”.
Recognizing the need for an image uplift, Lewis says it is part of the industry’s PR mission to “make manufacturing cool again” with some industry leaders, among Musk, already out there doing that and opening younger people’s eyes to the opportunities of the ever-growing industry.
But in terms of the aging workforce and actually filling that gap, again, it comes down to what enterprise tech companies can do with their work, “producing systems, user experiences, mobile applications and infusing intelligent decision-making into everything that we do,” Lewis says, “so when somebody is in manufacturing, they’re not logging
on some old green screen user interface running on an IBM AS/400”.
UK manufacturing growth despite global turbulence
Amid the bumpy manufacturing market, recent research showed that manufacturing in the UK returned to growth in March for the first time in 20 months in a largely competitive international climate where demand is still low and potential blockers like supply chain
stresses remain.
But what could the contributing factors to this success be? Overall transformations and strategic progress in the industry could have something to do with it, according to Tim Long, global head of manufacturing at Snowflake, who sees “significant pivots in direction for the entire industry, with leaders looking for ways to adapt, and data is seen as a core enabler of that transformation”.
Generous government support in the UK and emphasis on the importance of the industry could be another added element at play making the UK stand out from the rest. “We saw the chancellor allocate £4.5bn for some of these innovations moving towards net zero emissions. We know that the UK is moving up the ranks in terms of global manufacturing contribution being the ninth largest manufacturing nation in the world. So, a lot of exciting things happening in the UK manufacturing market,” Long shares.
Looking through the lens of some common challenges that usually stand in the way of manufacturers adopting technology that boosts their productivity, Lewis also sees the UK as an economy on a constant mission of exploring, pioneering and experimenting:
“You know, nothing’s off the table.” At the same time, UK manufacturers have learnt to embrace change in technological aspects where industry misconceptions are not uncommon.
Referring to cases where manufacturing customers keep altering the scope of what they expect from the vendor when assigned to a project, Lewis details how in some cases, organizations still expect multiple modifications and customizations as opposed to an out-of-the-box solution, which you just can’t do in the cloud. “This new era has brought the need to make sure that that system is configured, set up for the industry and then give tools to customers that enable them to fine-tune and make it fit like a glove. So I think that mindset has already changed in the UK,” he says.
With cloud providers like Salesforce being the dominant CRM vendors around the world, especially in the UK, and Workday doing incredibly well in the country, it seems that UK customers are embracing all native cloud applications and “they’re happier to use technology in a different way because they understand how they can improve their businesses by using that innovation as it’s delivered to them,” Lewis explains.
While historically very protective of their data due to concerns around intellectual property loss, Long shares that they are seeing that tide shift at Snowflake with manufacturers beginning to embrace the idea of the cloud not just for traditional IT data, such as the ERP data, but also for shopfloor data.
Solving challenges in Industry 4.0
Especially crucial to manufacturing proves to be the Industry 4.0 concept, leaning on smart manufacturing – the focus on digital transformation of the field to deliver real-time decision-making, revamping the way companies work.
Some of the components driving Industry 4.0 include technology such as IoT, cloud computing and analytics, AI and machine learning, embedded software and robotics to streamline the way organizations gain insights and streamline operations.
For example, IoT provides a richness of inputs within manufacturing through sensors, being able to give the right feedback on how the various machine parts are working and break that down into what’s going on from an internal perspective.
This especially adds value when it comes to internal operations efficiency, but also for some of those companies that are building products and potentially getting new revenue streams and services using the technology.
Similarly, Fearon predicts that GenAI could very soon be successfully used to write a production schedule for an injection molding of a certain set of products with the current stock trends, with particular market demands within a set of disruptive activities, “that’s where I can see the manufacturing world going with generative AI”.
But making use of the relevant technologies doesn’t have to be a tick-box exercise as manufacturing customers can’t be expected to just to know what they’re going to do with new tech like blockchain. “I think we actually need to come along and give them the use cases and the finished result, which is, here’s a blockchain routine for your supply chain or an AI algorithm for your invoice processing. So we’re giving that to our customers,” Lewis says.
As one example, the largest multidirectional forklift manufacturer Combilift detailed how Infor has helped it in tackling some pertinent problems.
“With regards to supply chain quality, Infor has guided us in the creation of Birst dashboards which makes tracking vendor performance and quality a much simpler task than before. The supply chain team used to use databases and spreadsheets separate from Syteline but now they can have all this information at the touch of a button,” Fearghal McCorriston, IT manager at Combilift, tells ERP Today.
In a similar way, skill shortages are no longer an issue for the technical team dealing with spare parts. McCorriston notes an AI-powered product recommender which can suggest additional parts required to be sent for jobs and in turn reduce incorrect dispatches and increase first-time fixes.
“It also means that the technical agent dealing with the customer does not need to have complete knowledge of trucks and parts as the system takes this responsibility and executes it with ease,” he explains.
Looking ahead to what the future of manufacturing can offer, all share that growth is the most common business driver they hear from manufacturing customers so it’s not as much a technological but a business focus of the growth mindset leading the way.
This involves customers looking for market intelligence, the next opportunities where they should be investing and how they ensure they are aligning their products and services with their customers as best they can.
Responding to these demands, Long says that Snowflake Data cloud, and Marketplace in particular, works with many of those insights “whether it’s market, economic statistics, data that can help you better understand your customer base or potentially data to help you price your products more intelligently – all of those are levers that we see our customers pursuing to help them drive their growth strategies”.
In addition, another macro-level transition can be seen where manufacturers aim to become more digital companies and monetize their data in strategic ways.
Some of the global manufacturing organizations have created digital solutions for their own production environments and they’re looking to market and sell those services to other manufacturers. “In some cases they are looking to [showcase these on our platform] due to our strengths of being cloud-native and running globally across clouds. So that’s an exciting trend,” Long concludes.
