Unlocking business agility with smart manufacturing
Manufacturers have long known the positives AI can bring to the sector, from the real-time monitoring of data to improving quality control measures, and slowly but surely, the technology is being adopted across the industry. However, the events of the past year have accelerated the need for AI adoption more than anyone thought possible. The struggles the industry has been through recently — from supply chain disruptions to equipment shortages — shone a light on the lack of agility and visibility in the sector. Industry leaders know they need to implement smart manufacturing to keep up with demand, however many manufacturers I speak to are finding that getting to this stage is easier said than done. Why? It can be put down to three key issues; the skills gap, leadership structure and investment. The good news is that they can be easily overcome with the right planning and toolset.
Closing the skills gap
The first barrier manufacturers need to overcome is a talent gap. While people think automation is here to oust talent, it’s actually here to support it. In fact, the estimates that, by 2025, the number of jobs AI will have created will be greater than the number of jobs it will displace. Automating processes doesn't mean putting people out of their jobs, but it does require the workforce to adopt new skills in order to work alongside it. Employees need to know how AI and automation can free up their time from the more mundane processes, allowing them to focus on the meaningful jobs that will grow the business.
To overcome this, organisations should have a clear training programme in place, to retain the talent they currently have, while ensuring they don’t feel ‘put out’ by the adoption of AI. Upskilling current employees will not only help fill in the talent gap but it’s also been proven to boost morale and retention. According to an , 83% of office workers globally would feel more secure in their job if their employer offered opportunities to learn new skills. It goes without saying that staff who feel valued, work better with their team, improving efficiency and collaboration — a win, win for all.
While training up front line employees is crucial, the leadership team can’t be forgotten about. After all, any transformational change, no matter how big or small, must be seen to be supported from the top to ensure success in the long term. An effective way to do this is by surrounding decision-makers with technology experts that are familiar with the company. They will know what tools will bring the desired return on investment – this is what a leadership team cares about, ensuring they see results from their investment. A change as big as implementing smart manufacturing should also be supported by an internal committee of stakeholders with defined roles to keep track of its progress. A committee such as this should be set up at the very beginning and should involve representatives from all departments, at all levels. This inclusive approach can go a long way in achieving buy-in to smart manufacturing at all levels of the organisation.
Breaking the barrier of upfront investment
The capital required to invest in technology such as AI can stop manufacturers in their tracks. Some perceive the upfront costs to be too exorbitant, while others worry about the impact a steep investment may cause a business that is already recovering from a crisis. Organisations should, however, recognise that the move towards smart manufacturing doesn’t have to be a complete ‘rip and replace’ of the previous infrastructure. Many leaders find success in taking a low-cost approach, by investing in an Industry 4.0 Enterprise Resource Planning (ERP) system that can be incorporated into existing systems.
An intelligent ERP system can be deployed to underpin existing technologies, maximising and connecting their capabilities so that departments can feel the benefits across all processes and the supply chain. Furthermore, companies that fear disruption have the option of breaking the ERP deployment into separate goals. They can start by addressing the most urgent pain points first – whether that’s automating a complex shop floor control or demand forecasting. Once these initial milestones are successful, teams can move on to the next phase, ensuring long term success and a more manageable, smoother transition.
Embracing the benefits of smart manufacturing
With a solution that enables Industry 4.0, businesses can have real-time access to data across all processes, preventing any issues from spreading and impacting customers. The manufacturers with this level of supply chain traceability were the ones able to respond quickly to the challenges brought by COVID-19, such as peaks in demand or supply chain disruptions. Moving forward, a centralised ERP system will continue to be crucial for organisations to react quickly to changing customer demands. Not only because automated processes and visibility help improve agility, but also because it frees up precious time from staff. With less manual processes, teams can be more involved in the decision-making processes, strengthening the business to achieve a sustainable recovery in 2021.
Skills gaps, leadership barriers and high-cost deployments are still common issues amongst UK manufacturers. However, they can all be overcome, and shouldn’t be seen as a barrier to smart manufacturing. The benefits of a connected ERP system far outweigh the hurdle of overcoming these challenges. With the right tools, talent and strategy in place, leaders will be well equipped to make the transition towards a data-driven and agile future.
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.