Bain & Bosch partner on Digital Operations
Industrial and enterprise companies are investing heavily in the technologies that power Industry 4.0, from the Internet of Things to cloud services and analytics. However, while effectively digitalising manufacturing plant operations can boost efficiencies by 15 to 20%, many companies struggle to achieve this.
Therefore, by working together, Bain and Bosch Connected Industry aim to deliver solutions for the operational business and provide support during the implementation phase, while also accompanying the transformation process and help develop innovative approaches for product development and process optimisation, a statement said.
“Companies often start focusing on digital business model changes; however, the real short-and-midterm potential of digital transformation lies in operations. Interestingly, we see companies underestimating that potential. If done right, we can see potentials of 15 to 20%,” says Dr Jörg Gnamm, Partner, Bain & Company.
“We deeply believe that to reach that full potential, you need an ecosystem of best partners. We think that this partnership of Bosch with Bain offers really unique value for our clients,” he asserts.
Bosch Connected Industry bundles Industry 4.0 software and services for networked production and logistics under its Nexeed brand, with customers benefiting from the experience of more than 280 plants worldwide.
The company also draws its pool of experts across various industries, as well as in the production and logistics sector to offer its customers practical solutions for practical applications, with a focus on concrete customer benefits, adds Christian Hüttenhein of Bosch Industry Consulting.
“The partnership with Bain comes like perfectly fitting puzzle pieces. We offer a holistic consulting approach - from business model, innovation, and customer strategy, over to process optimisation, over to implementation support of technology solutions.
“Bosch has a market leading position in several industries, and we are a leading user of Industry 4.0 solutions, and we are also a leading provider of those solutions. And what works for us is what we offer to our clients and partners. We take them to the plants, show them the challenges we face, and the solutions we developed to tackle those challenges,” he explains.
This combination of Bain’s expertise in strategy consulting across all industry sectors and Bosch Connected Industry’s invaluable perspective as a creator, user and distributor of Industry 4.0 solutions will result in digital operations solutions that are tailored perfectly for client’s production and business processes, adds Stefan Bastian of Bosch Industry Consulting.
“We can reach about 5,000 consultants in our plants. We have several consultancies inside, and for every topic, we can find the right expert. We are also able to help the customer, so it's not only theory, (but) we do it in real life. We also do the implementation, quality checks and so on, it's an expert and people business (that we offer).”
By working together, Bain and Bosch Connected Industry say that they will not only be able to address innovative networking concepts as they apply to all facets of manufacturing, but that they will be able to apply the right digital strategies to indirect and support functions, including a range of associated services, so as to ensure the right level of enterprise integration, says Michael Schertler, Partner at Bain & Company.
“Typically, when we start digital transformation, it starts with developing a strategic perspective. What does the client want to achieve, what are their objectives and what are the opportunities in their industries? From that, together with Bosch, we start identifying and prioritising what are the right and most attractive digital use cases, in that ecosystem.”
“A lot of service providers offer things like digital apps, sometimes even partnering with universities. This is good for creating IP, but the clients are interested in real life, series production expertise. And this is what Bosch brings to the partnership,” adds Dr Jörg.
In order to be really comprehensive, we look at not only the direct functions on the shop floor, but we also look at support functions, including delivery and quality management, maintenance, but also HR functions, finance and IT,” he concludes.
IHS Markit/CIPS: UK Manufacturing PMI near-record high
UK manufacturing trends
For the UK manufacturing sector, growth of output and new orders were both reported by IHS Markit and CIPS as among the best seen over the past seven years, which in turn has led to a strong increase in employment. Despite this, the sector continues to face supply chain delays and input shortages, which resulted in increased purchasing costs and record selling price inflation.
UK Manufacturing IHS Markit/CIPS Purchasing Managers’ Index® (PMI®)
Seasonally adjusted, IHS Markit/CIPS Purchasing Managers’ Index® (PMI®) rose to 60.9 in April, which was an increase compared to March (58.9) and above the estimated 60.7 for April.
Increasing for the eleventh consecutive month, the latest readings are the highest since July 1994 (61.0). The output growth for April has been attributed to the loosening of lockdown restrictions, improving demands and a rise in backlogged work.
“The manufacturing sector was flooded with optimism in April as the PMI rose to its highest level since July 1994, bolstered by strong levels of new orders and the end of lockdown restrictions opened the gates to business. It was primarily the home market that fuelled this upsurge in activity though more work from the US, Europe and China demonstrated there were also improvements in the global economy. This boom largely benefited corporates as output growth at small-scale producers continued to lag behind,” said Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply.
In addition to expanding production, total new orders rose for its third consecutive month, which was attributed to a revival of domestic market conditions, stronger client confidence, parts of the economy reopening and improving global market conditions.
While new exports rose in April, the rate was reported as weaker in comparison to new orders. “Companies reported improved new work intakes from several trading partners, including mainland Europe, the US, China and South-East Asia. Large-sized manufacturers saw a substantial expansion in new export order intakes, compared to only a marginal rise at small-sized firms,” said IHS Markit/CIPS.
UK Manufacturing’s outlook
Remaining positive at the start of the second quarter, 66% of companies forecast that output will be higher in a year's time, which is attributed to expectations for less disruption related to COVID-19 and Brexit, economic recovery, improved client confidence and new product launches.
“Further loosening of COVID-19 restrictions at home and abroad led to another marked growth spurt at UK factories. The headline PMI rose to a near 27-year high, as output and new orders expanded at increased rates. The outlook for the sector is also increasingly positive, with two-thirds of manufacturers expecting output to be higher in one year’s time. Export growth remains relatively subdued, however, as small manufacturers struggle to export,” said Rob Dobson, Director at IHS Markit.
Adding to comments from IHS Markit and CIPS, , Managing Director of Freight and Logistics at Accenture Global said: “While today’s figures are positive overall, the worsening supply situation is still a concern, with rates of both input costs and selling price inflation running far above anything previously seen. Shipping delays and material shortages are driving huge backlogs of uncompleted work and the surge in manufacturing orders is leading to many firms struggling to boost operating capacity to keep up with demand. With business expectations becoming even more optimistic as the economy rebounds, the big question will be whether firms will be able to cope with the surging inflows of new orders.
“As ongoing supply chain issues are still at large, companies with wide international footprints should look to reassess their logistics strategies by running supply chain stress tests and simulations in order to respond quickly to upswings and variability in demand. A flexible and resilient supply chain will be a key way for businesses to remain both competitive and stable as we emerge from the pandemic”