ETO manufacturing is happening - and ERP is the key driver
In line with the rise of digital routes to market, consumers have become attuned to having product offerings tailored to their preferences and needs, and often they are even prepared to pay a premium for this level of service. This focus on customised solutions is leading to a corresponding growth in servitisation, incorporating a feedback loop to capture the customer’s likes, dislikes and recommendations about product design, delivery and support.
Providers who fail to react to these changes risk losing out on bespoke manufacturing and after sales service revenue streams to more forward-thinking peers. Customers often value superior service over price but mass-volume manufacturers, worried about squeezed margins, have often failed to deliver a truly service-led approach.
ETO manufacturing is a good fit for the new service-focused environment. Yet, while the market is well positioned to continue its growth trajectory, increasing customer demand is ramping up the pressure to move quickly to meet the needs of target markets. Indeed, with the final product often an original one-off creation, it is important that ETO manufacturers are agile and able to streamline workflows and cut lead times.
They cannot simply continue to work with their old systems in the same way they always have because that methodology is not going to give them sufficient agility to manage their data more effectively and use it to deliver a more tailored customer service. However, moving from that realisation of the need for innovation to actually taking the plunge is not always easy.
These kinds of manufacturing companies are often saddled with complex ordering processes. They have established ways of handling workflow and are wary of technology that they feel could constrain them. Yet, that said, manufacturers do increasingly appreciate the need to change. To keep up with the evolving market environment, they simply cannot afford to remain as they are. So how can they best address the challenges and capitalise on the opportunities that ETO manufacturing brings in order to achieve faster time to market and sharper competitive edge?
Finding a solution
First, it’s important to understand that making the transition to a new way of working is not just a purely technological decision. Often, it’s just as much about manufacturers reviewing the way they work and finding a partner that is able to help rethink what they are doing and put in place the right systems for them. It’s important too that this is a steady, evolutionary process that enables the manufacturer to gain internal buy-in at each stage as it moves step by step to a new methodology.
We believe that enterprise resource planning (ERP) will provide a critical part of the solution for many manufacturers - not only helping manage each complex project end-to-end but also to improve collaboration and respond faster to market needs, while at the same time minimising re-engineering and reducing risk.
Arguably the key benefit of ERP in this context is that it provides a way for the manufacturer to view all-in-one-place the complete range of information it needs to deliver an efficient ETO service. Manufacturers can view details of open orders, prices, and preferred vendors, and can see the impact of their choices on production, finance, and procurement. They can control the quality of products as well as the efficiency of their design and production throughout the product lifecycle.
ERP brings further key benefits through its seamless connectivity and alignment with other related systems. Integration with standard product lifecycle management (PLM) systems could link engineering to production. The use of product configurator software can help to quickly configure products, services, projects, and quotes for customers and provide the sales team with a resource to generate complex quotes and proposals meeting customer needs.
Materials requirement planning (MRP) software can help the manufacturer buy common parts for use across multiple projects. ERP can also provide full product traceability from requisition to inventory. Reporting/business intelligence, data analytics can be integrated to drive real-time analysis and faster and more informed decision-making to ensure optimal revenue and an excellent customer experience while the cloud, mobile, and business apps can help enhance collaboration and drive business efficiencies.
Taken together, all of this allows ERP to manage every complex project that the ETO manufacturer takes right through from quote to service delivery and this, in turn provides complete transparency across the whole process with regard to costs incurred, resources used and interactions both within and between departments.
Ultimately though, the customer needs to be at the heart of the ETO manufacturing approach and the best ERP platforms support this capability also. Integrated product configurators enable consumers to see the different available versions of a product online and choose the exact specifications they want. The customer is effectively part of the production line. The tight integration between different processes and systems that ERP can deliver helps makes this possible as does the flexibility and scalability offered by the technology. And the use of servitisation and the feedback loop play into this approach also. After all, the more information the ETO manufacturer knows about the customer the more it can improve its service to them – and moving forward that will be key to the success of the whole ETO sector.
Looking ahead, we are confident that if ETO manufacturers continue to focus on customer service and deliver a servitisation approach based on flexible ERP technology, their future prospects and those of the sector in general will look increasingly bright.
Fabrizio Battaglia is Head of Manufacturing & Distribution for HSO
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Siemens: Providing the First Industrial 5G Router
Across a number of industry sectors, there’s a growing need for both local wireless connectivity and remote access to machines and plants. In both of these cases, communication is, more often than not, over a long distance. Public wireless data networks can be used to enable this connectivity, both nationally and internationally, which makes the new 5G network mainframe an absolutely vital element of remote access and remote servicing solutions as we move into the interconnected age.
Siemens Enables 5G IIoT
The eagerly awaited Scalance MUM856-1, Siemens’ very first industrial 5G router, is officially available to organisations. The device has the ability to connect all local industrial applications to the public 5G, 4G (LTE), and 3G (UMTS) mobile wireless networks ─ allowing companies to embrace the long-awaited Industrial Internet of Things (IIoT).
The router can be used to remotely monitor and service plants, machines, as well as control elements and other industrial devices via a public 5G network ─ flexibly and with high data rates. Something that has been in incredibly high demand after being teased by the leading network providers for years.
Scalance MUM856-1 at a Glance
- Scalance MUM856-1 connects local industrial applications to public 5G, 4G, and 3G mobile wireless networks
- The router supports future-oriented applications such as remote access via public 5G networks or the connection of mobile devices such as automated guided vehicles in industry
- A robust version in IP65 housing for use outside the control cabinet
- Prototypes of Siemens 5G infrastructure for private networks already in use at several sites
“To ensure the powerful connection of Ethernet-based subnetworks and automation devices, the Scalance MUM856-1 supports Release 15 of the 5G standard. The device offers high bandwidths of up to 1000 Mbps for the downlink and up to 500 Mbps for the uplink – providing high data rates for data-intensive applications such as the remote implementation of firmware updates. Thanks to IPv6 support, the devices can also be implemented in modern communication networks.
Various security functions are included to monitor data traffic and protect against unauthorised access: for example, an integrated firewall and authentication of communication devices and encryption of data transmission via VPN. If there is no available 5G network, the device switches automatically to 4G or 3G networks. The first release version of the router has an EU radio license; other versions with different licenses are in preparation. With the Sinema Remote Connect management platform for VPN connections, users can access remote plants or machines easily and securely – even if they are integrated in other networks. The software also offers easy management and autoconfiguration of the devices,” Siemens said.
Preparing for a 5G-oriented Future
Siemens has announced that the new router can also be integrated into private 5G networks. This means that the Scalance MUM856-1 is, essentially, future-proofed when it comes to 5G adaptability; it supports future-oriented applications, including ‘mobile robots in manufacturing, autonomous vehicles in logistics or augmented reality applications for service technicians.’
And, for use on sites where conditions are a little harsher, Siemens has given the router robust IP65 housing ─ it’s “dust tight”, waterproof, and immersion-proofed.
The first release version of the router has an EU radio license; other versions with different licenses are in preparation. “With the Sinema Remote Connect management platform for VPN connections, users can access remote plants or machines easily and securely – even if they are integrated in other networks. The software also offers easy management and auto-configuration of the devices,” Siemens added.