As wave after wave of new technology washes over the manufacturing industry, more companies are coming to grips with an important realization: The days of applying band-aid technology solutions are over.
Technology, or more specifically how they invest in, use, and manage it, is becoming an increasingly powerful competitive differentiator and riding the waves successfully requires a coherent, strategic plan.
The Fourth Industrial Revolution – Industry 4.0 – is fundamentally reshaping the manufacturing sector, adding to a technological galaxy that already feels endless. Compartmentalizing helps, and while every company’s technology stack is unique, most are spending the bulk of their time in three areas, including:
- Identifying and implementing optimal systems updates and programs
- Debating the benefits and risks of automation and robotics as solutions
- Monitoring evolving Industry 4.0 technologies to understand how best to leverage
Developing a strategic plan focused on these pillars and the many underlying drivers will go a long way toward helping companies get better at confidently answering the three biggest new tech questions: 1) the “what”, for example, putting the research into truly understand what they need in terms of scope and scale; 2) the “where and why”, essentially validating the business-use case; and 3) the “how” – best practices for ensuring seamless, compatible rollouts and integrations.
The importance of being prepared and agile is reflected in a recent Bain Capital survey of 270 manufacturing firms, which found that those with strong digital components to their businesses are three times more likely to achieve their production goals than those with less digital dexterity.
WHAT
Nuts and Bolts: Systems Updates and Integrations
Systems updates can go off the rails quickly without proper planning and diligence. Before any major purchase, companies need to ask the right questions: Are we getting optimal results from what we already have? Are we getting too much technology or too little? With smart manufacturing on the rise, ensuring anything new will integrate smoothly with existing systems is a critical pre-purchase consideration.
Strategic Use of Automation and Robotics
The decision to introduce automation or robotics requires thorough analysis and should not be driven by emotions or short-term factors. In practice, machines are not replacing humans — they are taking on high-volume, repetitive tasks more prone to human error, freeing workers to focus on higher-value work and driving better quality control.
Industry 4.0: Getting Smarter with Data
Industry 4.0 refers to the increasing interconnectedness of manufacturing-related hardware through the internet (“smart manufacturing”). AI and intelligent data are leading the smart manufacturing charge, delivering insights across inventory, production planning, vendor management, and predictive maintenance. The challenge is not a shortage of data — it’s managing and integrating it effectively. Companies that figure out how to best utilize their proprietary data will have a significant competitive advantage.
Those insights take the form of proprietary data, one of the most valuable assets companies possess. For most, there is no shortage as technology seems to be constantly generating new data on production lines, supply chains, employee performance, and other key metrics. The challenge, however, comes when the data is not fully integrated
“Smart manufacturing refers to fully integrated, collaborative manufacturing systems that respond in real-time to meet changing demands and conditions in the factory, in the supply network, and in customer needs.”
—National Institute of Standards and Technology
WHERE & WHY
The Invaluable Value of Internal Due Diligence
In many cases, a new technology rollout stems from a strong desire to resolve an acute problem, usually relating to quality control, as quickly and seamlessly as possible. The problem with this reactive approach is that it only satisfies the quick part and can be anything but seamless.
Automation is a good example. Middle-market manufacturing companies, particularly those going through prolonged labor shortages, often turn to automation as a magic bullet that will help them continue to meet demand and deliver products on time. The problems come when they fail to dig deep enough in their research to realize the flip side of automation, for example, the extra costs for sensors and software, the heightened exposure to cyber-attackers, and the need to find and pay higher-skilled workers to oversee these new solutions.
Whatever the technology-related objective, the foundation for success gets poured first through a mix of analysis and question-asking. What will the new solution bring that we don’t have now? Are we comfortable going outside for this? How do we know which technology is best for us?
Determining if technology or people are the best option depends on the true nature of the task at hand, particularly whether it’s a higher-volume, repetitive step or more customized in nature. For example, if the task involves welding, but you are only making one or two custom pieces per month, manual labor is the best fit. If the job is custom and high volume, automation or robots could be worth a look. As firms go through each of the major stations along a line, making tradeoffs like these can be valuable.
Ideas are easy. Execution is everything.” —John Doerr
HOW
Technology rollouts and implementations are difficult to orchestrate and can often fail outright or fall short in delivering the desired ROI for a variety of reasons.
Lack of patience is a leading cause — arbitrary go-live dates set in early meetings rarely reflect the true timeline. Master data cleanup, process control, and testing alone can add six months to a year. Instead of adjusting expectations, companies take shortcuts that undermine results, even though they would have benefited far more from upfront pilots and targeted research.
Equally critical is how the change is communicated to stakeholders. Resistance to changing longstanding processes is natural, and different employees will have different learning curves. Consistent messaging from the top — reinforcing the reason for the change and the benefits it will deliver — is essential. When it comes to technology rollouts, there is no such thing as overcommunicating.
The Stakes Are Rising: Why Getting Technology Right Has Never Mattered More
A recent industry survey found that most companies (88%)2 have difficulty measuring the value they are getting from their technology investments. The challenge of ensuring a good return on investment is only becoming more complex and difficult, and for many companies operating in the middle markets, achieving good ROIs is an absolute necessity. Having a buttoned-up plan in place, one that looks ahead and allows for flexibility, and taking the time to make the best decisions possible are the two most important factors in successfully managing and introducing innovative technologies that can ultimately benefit your business. The stakes are rising every day, the digital revolution is unfolding, and the best managers/optimizers of their technology stand to carve out strong competitive positions.
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