Source: Forbes Business Council

As we move from reeling to reflecting on the disruptions we’ve seen to the world of manufacturing and supply chain courtesy of Novel Coronavirus COVID-19, there are numerous questions being asked in boardrooms, on earnings calls, in the media, and in government. The answer to all those questions is digital transformation.

Should I have a more agile supply chain? Yes, through digital transformation. Can we make manufacturing more competitive in higher cost environments? Yes, through digital transformation. How can supply chains pivot fast yet still be robust and resilient to the next disruption? Through digital transformation. Can I shift my supply chain to a new geography without huge cost or risk? Yes, through digital transformation. The list goes on…

COVID-19 has shown the world something that the manufacturing industry should already know. Traditional supply chains and manufacturing ecosystems are failing and we need to shift to a more adaptable, agile solution that is fully digitally enabled. The virus, like any crisis, has merely underlined both that need and the urgency and will likely serve to accelerate that change. This needs to result in real  plans of action, rather than debate.

According to Anna-Katrina Shedletsky in Forbes, “because of COVID-19, manufacturing will experience five years of innovation in the next 18 months”. Anna-Katrina, like many, sees COVID-19 as the wake-up call manufacturing needs to stop talking-the-talk about Industry 4.0, IIoT or Smart factory and start walking-the-walk. Digital transformation has always made sense but adoption has been slowed as people deal with some of the overwhelming concepts around Industry 4.0, the sheer size of the task, and struggle to figure out where the value is coming from and where they can find the ‘digital dividend’. Now the needs are compelling and urgent and those that fail to transform will likely be left behind and risk becoming irrelevant and uncompetitive. 

Given the absolute need for digital transformation at an accelerated rate, what can companies do to move now and move fast?

The first five keys to digital transformation:

 

• Create a digital thread right at the start of the innovation process and maintain it to the end of the product life
• Find manufacturing partners that are digitally native and will enable the choice, agility and resilience you need
• Ensure you have the right digital tools to manage your supply chain, it’s time to throw away those spreadsheets
• Insist that your own manufacturing ecosystem or that of any supplier has implemented a digital transformation strategy
• Embrace the digital twin, automation, robotics, additive manufacturing and artificial intelligence as technology building blocks

 

All of these elements are required to create an ecosystem that is digitally enabled, has the visibility to model a disruption in real-time, the agility to respond to that disruption, and the resilience to cope with whatever the world has to throw at it. 

Importantly, these digitally enabled manufacturing solutions promote choice. The choice to manufacture close to the consumer or in a lower cost environment. The choice to bring manufacturing work onshore or to allow the market to drive vendor selection. Choice comes from real time data and intelligent processes. 

Digitally transformation has to happen inside the factory and throughout the entire manufacturing ecosystem!

Inside the Factory Walls

The Industry 4.0 trend, also referred to as Industrial IoT or Smart Factory, started on the factory floor and was heralded as the savior for the manufacturing industry, particularly in higher labor cost countries. It spoke of ‘lot sizes of one’ where each assembly would find its way through the factory and every process would be dynamic, seamless and fully automated. We were told stories of the lights out factory that would run 24/7 making and shipping products. Every machine would be an island of intelligence that through connection to other machines could create a self-healing, self-optimizing production line. And while we do have some great examples of intelligent factory solutions we have not seen much of what was promised.

The truth of the matter is that all the talk of products being “made in utopia” has created inertia, not momentum. The sheer size and scale of this potential transformation just served to confuse and paralyse. What’s more, the technical building blocks were not ready. Five years ago machine to machine (M2M) connectivity was not the norm and standards for connectivity were limited. AI was limited in how it could be applied to manage the huge amount of data a machine could produce. And robots were large cumbersome machines that were only worth installing and programming for very long runs. 

Now those digital building blocks are ready, M2M connectivity is scalable, faster and simpler, and even older legacy equipment can be connected, collaborative adaptable robotic solutions are readily available, and AI has advanced to the stage where it is both powerful and accessible. Those taking a pragmatic approach are deploying digital transformation plans in the factory that start with simple automation projects that deliver real return on investment (ROI) before moving onto the next step. Others are starting by networking existing equipment to quickly and easily gain visibility, accessibility and efficiency. This is certainly a lower friction solution than replacing expensive legacy machines.

Beyond the Factory 

Initially all the talk around Industry 4.0 was focused on the factory and manufacturing processes. More recently there has been a realization that business processes, particularly those associated with supply chains, are in need of transformation.

For too long supply chain management and the procurement process has relied on sending out numerous requests for quotation (RFQs), spreadsheets to manage those responses, long haul business travel to audit suppliers, late night conference calls and long distance program and quality management. COVID-19 has shone a spotlight on these outdated supply chain management techniques and found them wanting. They have been exposed as lacking visibility, lacking adaptability or agility and sadly lacking the resilience needed to cope with even minor disruptions.

And it isn’t as if there is no alternative, new tools have existed for some time. Supply chain software has been developed that helps manage purchasing, supply chain, inventory, all more dynamically and in real time. Platforms, like those provided by Fictiv and MacroFab are giving purchasers the ability to upload design data, get instant pricing, perform DfM (design for Manufacturing) on-the-fly and then select the right manufacturing option for every project.

These platforms are digital manufacturing ecosystems that connect buyers and engineers with a huge network of managed and vetted manufacturing partners. They take the responsibility for the direct liaison with the vendor, performing audits, quality control and managing the expediting and fulfilment of parts and products.

Digitally transformed processes are connecting digitally transformed factories through digitally transformed business models. They are driving value, speed and efficiency for the savvy companies using them and they are delivering a new digitally enabled level of agility and resilience. 

Regardless of the motivation for selecting a specific supply chain or manufacturing solution, it has to be digital.