We’re experiencing a shift away from traditional supply chain processes and moving closer to a fully digital age: one where data integrated from various sources allows assets, production plants and people to seamlessly interact with one another and where improvement is a never-ending goal.
In order to be able to transform supply chains, manufacturers have to synchronize and fine-tune all the different systems working for them and listen to their insights, which will later allow them to create strategic advantages where there were none in the past, and make the right decisions without blinking an eye.
Before we delve into the most important reasons causing manufacturers to transform their value chains, let’s take a look at what they’re striving towards.
The main characteristics of digitized supply chains
Integrated, continuously communicating systems and assets allow manufacturing companies to prepare for disruptions ahead of time and make adjustments to their methodologies more quickly and efficiently than ever before. Digitized supply chains benefit from such technologies as IoT-powered assets, machine learning, advanced analytics and precise forecasting, which takes the meaning of the word ‘agility’ to a whole new level.
Continuous optimization through intelligent means
Supply chain transformation allows you to make quick changes to products without disrupting standardized, mass production. Manufacturers are able to create affordable, user-designed variations to products while ensuring the right mix of materials and components are always on hand, thanks to various AI-powered predictive tools and inventory management systems. Intelligent assets always provide real-time information about what can be optimized, what component is about to fail and what actions need to be taken to ensure the best performance.
We’re already living in a world of data, but the problem is, we haven’t figured out exactly how to organize or use it yet. Digitized supply chains are organized in such a way, that you have an overview of every manufacturing process and its effects in real-time, making it easier to track changes and adjust business processes, leading to contextual based and data-driven decision making.
Improving product quality, reducing risks, speeding up
supplier and distributor experiences, optimizing inventory management,
simplifying supplying networks – the reasons behind manufacturers’ willingness
to move to a digitally powered supply chain are myriad. It’s only a matter of
time before organizations realize how to harness the power of Industry 4.0 and
how to adapt existing methodologies to it.
The ones who already have can count on a serious head start over their competition.
What technologies do manufacturers invest most of their resources in?
According to Deloitte, the top five tech investments among manufacturers are related to advances such as analytics, the Cloud, and IoT. Here’s a closer look at how different-sized manufacturing organizations have opted to spend their resources:
The challenges behind it all
We know that digital transformation isn’t as simple as wanting to make progress. There are serious operational and organizational hurdles regarding both technology and workforce which manufacturers have to settle on before implementing changes.
Firstly, skills gaps are proving to be a serious challenge for any industry on the market, not just in manufacturing. Finding skilled enough people or training existing employees is becoming increasingly difficult due to the rapid onset of technological advances.
Disorganized data structures and sources are also causing companies headaches – executing supply chain transformations require canonical data structures and bilateral communication between all assets, which can sometimes take a long time to achieve.
Deciding how to prioritize is often on manufacturers’ minds – the pressure of having to produce increased ROI in a short amount of time can often lead to short-sighted strategies, which require less time and resources to pull off, but can also thwart future progress and cause you to fall behind. Budgeting issues and the inability to understand how intangibles such as client satisfaction and brand management help ROI can lead to prioritizing the wrong things at the wrong time.
Difficulty running regular business processes while adopting changes is on every executive’s mind, as is avoiding downtime and keeping up with the newest workflow changes. Supply chain transformations are a huge deal, but completing them through smaller, segmented tasks should allow organizations to adapt and thrive in newer systems.
A successfully executed supply chain transformation is supposed to accomplish several things:
Increase visibility and transparency throughout manufacturing operations, increase speed to market for product development, enhance quality assurance and thus improve product quality itself, and reduce risks while contributing to higher quality client experience.
Most importantly, it’s expected to guide quicker decision making and redefine entire strategies by providing manufacturers with unprecedented levels of insights and contextually aware data.
Even though there are obstacles to take note of when going through with supply chain transformations, the benefits of keeping up with Industry 4.0 greatly outweigh the short-term issues manufacturers must face when deciding to upgrade their infrastructure.
The Microsoft Azure Business Platform offers a reliable, powerful and familiar set of capabilities which could be used to turn traditional, siloed value chains into highly integrated, insightful sources of data and productivity.
Merit Solutions builds on this platform by providing manufacturers with additional, industry-tailored functionalities.
Using our expertise of the manufacturing industry and partnership with Microsoft, you can optimize your assets with intelligent-powered assets and step into the future with a clearly defined strategy. Use this page to find out more about how to do exactly that.