Change is not a word that many people think of when it comes to the manufacturing industry. Words like precise, quality, reliability, efficiency are more commonly associated with manufacturing.
But change is happening, and it’s increasing in speed. Manufacturing, as a sector, is changing dramatically and strategically. A recent McKinsey report highlighted three major areas that are forcing U.S. manufacturers to be more adaptive:
- New technologies and other changes are presenting new market opportunities for manufacturers
- The U.S. could increase manufacturing GDP by $530 billion
- U.S. manufacturers must make changes on several fronts to improve their competitive position[1]
Industry 4.0 is here now. The challenge is, for many manufacturers, that Industry 4.0 may not be immediately possible in facilities short on capital or those still relying on paper-based systems.
The Pressure to Go Digital Intensifies
Industry 4.0 and the changes impacting manufacturers are all pointing toward the necessity to capture and create a digital footprint across operations. New customer and regulatory requirements regarding traceability and quality require a digital trail to provide the kind of real-time insight to meet these requirements. Customers now demand shorter product lead times, compressing supply chains and causing shorter production time. They want manufacturers to monitor, repair and/or replenish their products before they need it. The digital age is also impacting how manufacturers prepare business plans, forecasts, and even predict product recalls.
Determining Your Digital Preparedness
In a 2016 survey of 229 manufacturers conducted by Mint Jutras, 32 percent said they were prepared for the digital economy, 33 percent said they were getting close, 26 percent said they were making progress but still had a long way to go, and the remaining six percent said they weren’t prepared or were just beginning. Digging a little deeper to define what “digital” meant, the survey revealed that participants were across a wide spectrum of completely paper-based and manual to completely digital, where manual intervention was only required for (digital) approvals and exception handling. There’s still a lot more road to cover to reach Industry 4.0 goals.
Manufacturers need to reckon with the fact that much of the world has gone completely digital while their industry has been slower to do so. And, to create a digital footprint that will allow more agility and visibility across the entire supply chain means manufacturers need modern systems, integrated tools, and new skills.
A Modern, Digital System of Record
Years ago, the line separating struggling manufacturers from more efficient ones was often the presence of an ERP solution. Today, that line has moved. It turns out that the manufacturers that are growing today are not stuck on just ERP software. Multi-tenant, cloud systems that enable a manufacturing business to leverage a single system of record is becoming the new standard for adaptability. The cloud enables the foundation of connectivity needed to pull in data from nearly anywhere, much more effectively and faster than yesterday’s cobbled together ERP solutions. Cloud also hastens the arrival of Industrial Internet of Things (IIoT), simplifying the collection of sensor, machine, or tooling data for greater control.
What is clear is that the digital thread needs to be put in place to enable manufacturers to tap into the promise of Industry 4.0. New technologies allow innovative manufacturers to create an ever-widening gap between the technologically-savvy and the technology impaired. And, getting there incrementally may not be fast enough. It requires a vision, strategy, and a plan. Those manufacturers who do will be able to adapt, while those who don’t will lag farther behind unable to eventually keep up.
To discover your digital thread, download the white paper: The Curious Path to Industry 4.0.
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