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Pegasus Blog

Manufacturing in a digitalised world

DATE

October 2017


One of the latest buzzwords echoing around manufacturers worldwide is digitalisation, a means of using a technology-driven business model to deliver new revenue and value-driven opportunities. A response to the need to develop greater levels of agility and efficiency in order to keep pace with an increasingly unpredictable marketplace, digitalisation has the potential to equip organisations with the tools they need to thrive in a modern economy. But what does it mean in practice, particularly for smaller manufacturers? And what’s the right approach?

Without a doubt, effective IT systems are a key enabler of growth, but where larger, less agile manufacturers may struggle to change course to chart new waters, SMEs are often in a stronger position to capitalise on growth opportunities, unencumbered as they are by restrictive legacy systems. But, with smaller IT budgets to work with, the benefit of being legacy-free can be somewhat curtailed by the pressure to make the right IT investment first time. SMEs not only need to invest in the right capabilities, but also to ensure they’re investing in capabilities that will work with what they’ve already spent money on. For example, there’s no point investing in a CRM system with a view to boosting service levels if it’s not integrated with wider business processes. Simply bolting on ill-considered solutions will only serve to add another level of complexity to operations, rather than adding value.

Digitalisation in context

Digitalisation for manufacturers might mean increasing automation on the production line, investing in robotics, expanding ERP capabilities or implementing business intelligence tools to analyse and contextualise insights from across the organisation. For many, Industry 4.0, or the fourth industrial revolution, is also making its way onto the boardroom agenda, as executives look at the convergence of data, computational power, analytics and connectivity to deliver unprecedented levels of automation. But with so many business priorities all vying for investment, and an abundance of solutions all promising to deliver value, what is the right approach?

It’s important not to become overwhelmed by digitalisation and embark upon ambitious programmes purely for technology’s sake. If you’re a small but fast-growing SME in particular, there’s little point prioritising an Industry 4.0 focused strategy and investing in sensors across the factory if the back office is fragmented and reliant upon lots of manual processes, and systems aren’t capable of analysing the sensor-generated data.

By taking a step-by-step approach, with a focus on effectively gathering and using timely, accurate business information, manufacturers can optimise basic processes while benefiting from the levels of control and visibility that are necessary for growth. Incorporating seemingly mundane yet vital functions into business-wide IT systems enables a manufacturer to build a comprehensive picture of their operation and processes, with precise data at their fingertips. It’s only with this level of insight and control that manufacturers can expect faster, more effective decision-making, increased agility and, ultimately, continued growth.

Keeping focused on goals

By considering the goals they’re trying to achieve, manufacturers can choose the best-fit technology accordingly, digitalising different areas of the business at the right time to achieve the ultimate goal of increased productivity and profitability.

By taking a step-by-step approach, with a focus on effectively gathering and using timely, accurate business information, manufacturers can optimise basic processes while benefiting from the levels of control and visibility that are necessary for growth. Incorporating seemingly mundane yet vital functions into business-wide IT systems enables a manufacturer to build a comprehensive picture of their operation and processes, with precise data at their fingertips. It’s only with this level of insight and control that manufacturers can expect faster, more effective decision-making, increased agility and, ultimately, continued growth.

Moving all or part of their infrastructure to the Cloud is an approach many have already taken. With benefits spanning low total cost of ownership, reliability and security, flexibility and ease of upgrades, many manufacturers are turning to the Cloud for a robust platform as the primary building block in their digitalisation strategies, effectively getting their house in order before regrouping and prioritising where to channel technology investment in the coming years.

Collaborative working is another key area where digitalisation can facilitate value. Bringing together data and insights from across the business leads to a slicker, more consolidated approach, capitalising on greater visibility when it comes to making decisions and drive improvements to the bottom line. Taking this visibility a step further, technology can improve the flow of information with suppliers and customers to deliver improvements to demand planning and forecasting.

The value delivered by these two areas alone can be substantial, delivering efficiencies and fostering closer relationships with customers. Against this backdrop, further digital-focused improvements can then be considered.

A digital age

There’s little doubt that we are in the throes of a new age of manufacturing. Digitalisation is more than a buzzword and represents the catalyst for manufacturers to re-invent themselves in preparation for the digital economy we all reside in. What’s important is that manufacturers establish a realistic, business-specific digital strategy which is designed to support their individual business goals. One size does not fit all, and a targeted, incremental approach will come to represent best practice for successful digitalisation in a volatile environment.