Supply chain disruptions, fluctuating costs, and new consumer purchasing habits are driving a dramatic need for increased agility and resilience in manufacturing industries. Post-pandemic, global consumers are increasingly embracing digital channels over brick-and-mortar stores.
Today’s manufacturers are battling ongoing supply chain disruptions, including workforce-related challenges, which continue to impact their ability to run production plants at full capacity. At the same time, companies must also adapt to pre-existing challenges, such as retiring workers, a shortage of skilled workers, and ever-more pressing sustainability drivers pushing energy and waste reduction. Designing operations for a circular economy, too, is on the horizon.
During the pandemic, conventionally profit-led and efficiency-optimized manufacturers found themselves stuttering amid the need to be agile due to supply disruption. To survive – and thrive amid – this maelstrom of challenges, modern manufacturing companies have no choice but to adapt to the future.
In our transformed world, traditional supply chain drivers are rapidly changing. According to a 2021 report conducted by the World Economic Forum, 56% of the 3,000 CEOs surveyed listed agility and flexibility as their top strategic priorities.
Digital transformation drives agility, flexibility and resilience
The digital transformation of manufacturing operations is a critical foundation for delivering operational efficiency and flexibility improvements, as well as the end-to-end supply chain visibility manufacturing enterprises need in a post-pandemic marketplace.
According to the World Economic Forum, manufacturing companies leveraging digital technologies to transform their end-to-end operations reduced costs by 5-30%, increased productivity by 5-40%, and achieved substantial agility and sustainability improvements. Producers who do not embrace digital technology could fall behind, whereas those who begin their digital transformations early will sharpen their competitive edge.
To seize business growth opportunities, manufacturers must incorporate robust digital tools and platforms that optimize their manufacturing value chain. To maintain competitiveness, such organizations should:
- Digitize and standardize best practices, key performance indicators (KPIs), and reporting across their distributed network of plants.
- Leverage operational data with predictive and prescriptive artificial intelligence (AI) for continuous productivity, asset reliability, and eco-sustainability optimization.
- Create a digital thread that contextualizes information across the supply chain to provide the visibility, transparency, and traceability consumers and regulators demand.
- Establish new KPIs to measure and improve the speed and agility of their supply chains.
- Enable cross-functional supply chain visibility and collaboration to create production plans which are feasible to execute.
- Deploy advanced production planning and scheduling methods to optimize plant schedules for throughput and on-time delivery and to adapt to more frequent change.
Consumer product manufacturers’ large, distributed networks require industry-specific digital strategies and tools that allow companies to leverage synergies and facilitate accelerated deployment across their multiple plants simultaneously. To be successful, multi-site digital transformation strategies require a corporate, centralized “Center of Excellence” approach to identify the best practices and supporting technologies, which can be standardized and quickly rolled out in parallel across multiple sites.
Digital twin technology can provide real-time situational awareness and lays the data foundation for more advanced capabilities, like artificial intelligence (AI), machine learning, and predictive quality, process, and asset performance. By abstracting production sites in a standardized digital twin of the plant, manufacturers can transform operations consistently across many sites with varying practices for similar operational activities.
Comprehensive digital execution solutions are vital for aligning people, equipment, and operational processes with advanced digital technologies for efficient and compliant work execution, data capturing, and continuous improvement. As operational efficiency improves, so too does an operation’s ability to change course swiftly in the face of disruption.
Technological advances in big data and predictive analytics, business process management, mobile applications, and augmented reality are enabling manufacturers to empower operators and decision-makers to make sense of operational data. Newer platform and integration technologies like cloud, IoT, IIoT, and smart and edge devices are driving down the cost of digital transformation in the manufacturing sector.
Digital transformation incentivizes curiosity and spurs innovation, as it makes information more readily accessible to workers by connecting them to plant processes, real-time data, and one another.
A digital thread – a single, contextualized, real-time source of operational data – ensures everyone has the same information at the same time, which allows multi- disciplinary teams to collaborate on projects seamlessly, thereby improving efficiency and agility in tandem.
And, because institutional knowledge is collected in a digital repository, resolutions to previous problems are stored. Likewise, operations can use these problems and resolutions for training and building a skilled and empowered workforce for the challenges of tomorrow.
In today’s demand-driven marketplace, reliable and predictable operational performance can be the difference between a resilient, agile stance and falling short of customer expectations. Put simply, digital transformation turns disruption into opportunity.