Manufacturers are generating massive amounts of data, but are they smart about using it to thrive? Data could help manufacturers become more agile and resilient and increase production flexibility. Using data, manufacturers could get better insights into real-time demand, and if they are working flexibly, they could easily diversify their production offer.
Such flexibility is currently seen amongst smaller-sized manufacturers, but by making manufacturing data-driven and products data-enriched, industry giants could become similarly agile and flexible. Martin Rainer, manufacturing industry leader and general manager, North and Central Europe Region, at DXC Technology, says decision-making that’s enabled by data embedded into supply chains — providing end-to-end visibility in real time and circumventing inertia and bottlenecks — could bring great advantages to manufacturers.
Read demand signals in real time
“If I have visibility of all my markets, my pipeline and funnelling, I can determine where there’s still a viable distribution or sales channel — at every point in time,” explains Rainer. And, by having transparency about efficiency of equipment, production lines and the movement of goods, it’s possible to see where capital is moving and where it’s potentially stuck, he explains. “If certain lines of product are going in slow motion, the supply chain can be streamlined without inertia.”
Many manufacturing trends and models, such as Manufacturing Automation Protocol (MAP) and just-in-time (JIT) manufacturing, evolved over the decades to eliminate interruptions. “If the demand remains strong but there’s a squeeze on the supply side, you need to react fast in real time throughout the whole chain, not in a binary — either operational or shutdown — way,” says Rainer.
Industrial players that have data-enabled views into their supply chains are proving robust and flexible in all types of situations. They are able to overview demand signals in real-time and can divert factory resources into production and cash into R&D operations in order to supply those areas of need that see a boom in demand.
Create elasticity in supply chains
In addition to transparency, manufacturers need flexibility and elasticity in order to respond in an agile way, notes Rainer. “Measurement of what flexibility and elasticity means is key in order to consolidate and translate data into meaningful information — on both the supply and demand side.” Additionally, commercial flexibility in your supply ecosystem is an important enabler, he says, such as the possibility of having 100 per cent volume metric in the supply chain and related contracts. “This way, you’ll have the chance to create full transparency across your value network, picking up demand signals in real time and integrating them with your forecasting and supply ecosystem.”
Build anti-fragility with data-enriched products
Other ways to increase flexibility and elasticity are to enrich products with data and to diversify your ecosystem of partners and suppliers. By participating in connected cars initiatives, for example, tier-one component manufacturers can trade outside the sole original equipment manufacturer (OEM) — car maker — relationship, which historically constrains their business.
Rainer proposes that tier-one suppliers should align themselves with the big four trends in car making: connected car, autonomous driving, shared mobility and electric car. Providing engineering services by tapping into the research and development activities of OEMs or directly supplying software engineering (embedded) and not just manufactured products, means suppliers can increase their chances of maintaining production and increasing business resiliency.
Transacting directly with end users over the internet is another way of data enrichment. Such digital innovations enable manufacturers to have direct relationships with customers. The data gathered from customer transactions can potentially drive product innovation in a way not imaginable when bound to the traditional automotive supply chain.
Such a move could be part of a broader reshaping of manufacturing supply chains. There is a rising need to bring product capacity back to key market regions and get closer to customers — while staying cost efficient. “Being close to market is a big trend right now,” remarks Wolfgang Lucny, DXC’s industry executive for manufacturing, North & Central Europe Region. “Efficiency can become independent of location and labour cost by the use of smart automation and digital technologies such as 3D printing.”
Long view of manufacturing is horizontal
Across these emerging trends, data is the common denominator that brings innovation, greater efficiency, new markets and work practices within the grasp of manufacturers — but only if they reorganise horizontally. Data will have to be shared, exchanged and used collaboratively for new gains to be realised. Manufacturers need to start breaking through vertical functional silos in their organisation once and for all to harvest the benefits of the wider ecosystem.
It is high time for manufacturers to take action if they want to thrive and stay resilient. Focusing on data and smart technologies is essential. Factory floors that can be run remotely and supply chains that are digital from end-to-end are more robust and better able to survive various market, demand and industry changes and shocks.