How Tech is Transforming Manufacturing

Written By: Eric Kimberling
Date: January 27, 2023

Many Third Stage Consulting clients are in the manufacturing space and technology is significantly impacting how manufacturers operate and it's providing game-changing capabilities that really give them a competitive advantage in the marketplace.

There are software technologies like ERP systems, you have manufacturing execution systems, you have robotics and robotic process automation, a lot of different technologies that are enabling manufacturers to improve their operations.

What we want to discuss in this article is some of the key technologies that are changing the way manufacturers operate and the idea here is to give you some ideas on how you might leverage some of these technologies to define a digital strategy and roadmap to help improve your manufacturing operations.

One of the most important themes that we're seeing within the manufacturing technology space is industry 4.0. To summarize what industry 4.0 is, is really a way to tie together robotics manufacturing operations, internet of things and other technologies to help automate the end-to-end cycle within a manufacturing organization. Some of the key components of Industry 4.0 include manufacturing execution systems, which are technologies that automate and capture data on the shop floor as assembly lines and work in progress is moving through the end-to-end business processes. It also includes Internet-of-Things to capture data, not only in the sensors and in the shop floor but potentially in other devices as well which could be customer devices or other third-party devices and other data points that's integrated into the overall Internet of Things.

Then of course those robotics as well, so you have robotics that's automating much of the work that was done manually by humans in manufacturing, producing or assembling,  different materials. One good thing with industry 4.0 is it's really providing a more comprehensive view of the end-to-end business process from procurement of raw materials all the way through production, manufacturing, warehousing and ultimately to your end customers and it's providing better visibility and greater visibility into data throughout that entire end-to-end lifecycle. It's also providing automation tools through that end-to-end lifecycle as well. 

Industry 4.0 is something that's totally transforming and changing the way technology is used in manufacturing organizations throughout the world.

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Just as industry 4.0 is transforming the way manufacturers operate their core manufacturing operations, you also have Digital Supply Chains. Supply Chains are being automated and being provided with better data capturing, better data, both internally and externally to allow manufacturing organizations to better plan and predict where raw materials and finished materials need to be. 

We're seeing here in the 2020’s that organizations have a lot of work to do to improve their supply chains and make their supply chains more predictable, more nimble and more agile, so leading manufacturing organizations are using Supply Chain Technologies to help improve the way that they run their Supply Chains and there's a number of different technologies that you can use to enable a digital Supply Chain. Technology such as ERP or Enterprise Resource Planning technology, you have core Supply Chain Management solutions that are technologies focused exclusively on Supply Chain Management and there are also other point solutions that can automate just certain parts of your supply chain.

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Things like procurement software that focuses on really optimizing your procurement process and you also have transportation management software that manages trucks and logistics of moving your products from warehouses to customers. You also have warehouse management technologies that help automate the warehouse itself, the whole pick, pack and ship and the cycle counting physical inventory process so there are a number of different technologies out there that you have to choose from to help enable a digital supply chain now and in the future.  That's something that we see more and more manufacturing organizations doing here in the 2020s.

Another technology trend we're seeing in the manufacturing space is the term called interoperability. Interoperability is a way to describe how multiple systems can talk to one another and provide a cohesive set of business processes, technologies and data sets to automate and provide operations for manufacturing organizations. 

Now this is especially important for manufacturing organizations, even though it's something we see in other industries as well because manufacturing organizations are very complex, they have a diverse set of business processes, technologies and data coming from multiple sources that require, in many cases, a best of breed or multiple technology sort of solution. While it's possible that you could go find a single enterprise-wide technology like an ERP system to automate most of your manufacturing operations, it's rare that you're going to find one technology that can automate everything, end to end, from your procurement all the way through your Supply Chain Management, through the manufacturing and warehouse management logistics, all the way to your end customers.

Manufacturers more than most industries really rely on this concept of interoperability and what interoperability entails is making sure that you're open to multiple technologies and at the same time you assess how well those different technologies can talk to one another and integrate into a cohesive solution. Easier said than done of course but it is some something we're seeing more organizations focus on in the manufacturing space. The reason that this has become more important and more viable in recent years is because now more than ever you have better integration tools and better platforms to enable this sort of interoperability model.

10 or 20 years ago it was very painful to go through a deployment with multiple systems because it was so difficult to tie together the integration points and the architecture and the data flow between different systems but now you have other technologies in the marketplace that enable interoperability better than we have seen in the past. There's products like Palantir, Snowflake even the force platform within Salesforce, these are platforms you can deploy almost like middleware but different more advanced version of middleware that can tie together multiple technologies and provide a way to tie together multiple data sets and multiple business processes within your manufacturing operations. so interoperability is one of the key technology trends that we're seeing within the manufacturing space here in the 2020s.

Given the potential of technology in the manufacturing space, what it's doing is allowing manufacturing organizations to focus more on the end customer experience, it's providing better data and better visibility into what customer needs and wants are, what customer demand is and really focusing on satisfying that customer demand in addition to there being more opportunity with technology to provide a better customer experience. 

Additionally, you have customer expectations that manufacturers provide more of a consumer level or consumer grade type of experience of interacting with their organizations. In other words, you have a group of customers that are used to dealing with Amazon and Alibaba and social media outlets really easy to use technologies, they're also used to self-service and they're used to getting what they want, when they want it, so customers are largely driving and demanding from manufacturers a different way of operating a different way of thinking, in a different way of satisfying customer expectations, so the combination of better technologies with increasing demand and requirements from customers themselves, is largely what's driving a focus on customer experience within manufacturing organizations. Now while this isn't by itself a technology trend per se, it is an end result that many manufacturers are focused on achieving.

All of these different technologies that I've talked about so far today are sort of wrapped together with business intelligence. You think about Industry 4.0 and advanced Supply Chain Management and some of the other things I've talked about here today and what that entails is the capturing of more data. You've got more information, more potential visibility into your operations, into your customer needs, into your overall supply chain but that data is only useful if you have a way to report on it in a way to make meaning from it.

Business intelligence tools are a way to complete that loop in the process. With business intelligence tools, which can either be a standalone business intelligence tool that bolts on to other technologies or many technologies provide business intelligence modules as part of their core capabilities, you can use these tools either way that can help you have that visibility through better real-time analytics, business intelligence and other quantitative measures so business intelligence is something that's totally transforming the way manufacturers operate now versus how they have in the past. These are just some of the things I encourage you to think about as you think about defining your digital strategy for your manufacturing organization for more best practices and lessons and ideas and technology reviews that might help you identify some potential software options.

If you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, we would love to give you some insights. Please contact me for more information eric.kimberling@thirdstage-consulting.com

Be sure to download the newly released 2023 Digital Transformation Report to garner additional industry insight and project best practices.

Kimberling Eric Blue Backgroundv2
Eric Kimberling

Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.

Author:
Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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