Industrial Revolution 4.0 – Opportunities for Manufacturers

The fourth industrial revolution – the fusion of technologies that blurs the lines among the physical, digital, biological and social spheres – has impacted how manufacturing companies plan and execute daily work, as well as how they coordinate and manage their supply chain and distribution channels. Technology is now an integral component of almost all operational and financial processes, and as a manufacturer, you must not only stay current with manufacturing “best practices,” but also with technology trends.

The current work landscape of manufacturing is changing in a variety of ways, including: high-volume, high-mix, just-in-time manufacturing; virtual reality; augmented reality; cloud computing; and big data. These changes in the manufacturing universe and the underlying technologies that enable the newest production models can help your manufacturing company acquire predictive market data that enables you to identify, anticipate, and address emerging needs faster than ever before. In addition, manufacturers are finding new ways to increase the production of personalized and configured products, but at the speed of traditional repetitive manufacturing. These changes offer you new opportunities to maximize growth and profit.

Opportunities for Manufacturers

The shift from vertical integration in manufacturing to a supply chain model introduced a degree of unpredictability into product manufacturing and delivery lead times. Lead time reliability and consistency is a major factor in securing and maintaining customers for manufacturers, as wholesale and retail outlets rely upon dependable product delivery schedules in order to ensure that they have product to fill orders. Now, with the help of technology, companies are able to produce and ship products faster than ever and provide reliable and continuous product availability to customers. To remain competitive, manufacturers must identify within their supply chain and production processes the points at which potential variability or unpredictability exists and where there are opportunities to condense processing or transit time. Technology today streamlines and improves the communication and schedule coordination among supply chain nodes, significantly reducing or eliminating wait time and delay and improving workflow across the supply chain. The end result is that the facility or plant that assembles or produces the end item or final product can schedule more reliably and can maximize throughout of high-demand product.

Specialization is another aspect of manufacturing that is heightened with the right technologies and is becoming more important as competition and market saturation increases. The day of being a “generalist” is over; specialization and specificity are the keys to creating “brand notoriety,” which is key to differentiating a company from its competitors. If your business has a broad product line, you may consider a narrower focus and the creation of partnerships that will allow your company to focus on what it does best. Although the establishment and operation of partnerships and alliances can be challenging – requiring the right legalities, contracts, and people to protect intellectual property – they can prove to be critical to the delivery of disruptive technologies and products under the right circumstances and with the right technology.

Additionally, your company may want to rethink its distribution model and consider moving to a modular, distributed manufacturing model – building smaller plants, closer to customers that shorten product lead times and increase distribution velocity. Providing responsiveness to changing customer requirements allows manufacturers to “smart partner” with outsourced manufacturers and suppliers early in the demand cycle when delays can be most disruptive to operations. “Last Mile” configure-to-order manufacturers can respond to changes in customer demand and tastes without a corresponding increase in inventory and obsolesce exposure. This investment has its own challenges, but is one where manufacturers can be disruptive in their market when they are successful.

Potential Concerns

Although constant advancements are being made in technology, potential drawbacks and challenges come with these changes. The pace of change and the growing E-commerce driven mindset of immediate order fulfillment can lead to an “always on” expectation and not allow for hard downtime anymore. While many new technologies reduce our workload, the quality of work-life balance may still be compromised because of the pace of change that must be accommodated. Lastly, a growing number of repetitive task jobs are being replaced by robotics, thus eliminating many jobs formerly performed by humans. As baby boomers retire, companies understand that they cannot simply replace these roles with new personnel and remain competitive. In some cases, these manufacturers will make the choice to replace some degree of retiring institutional intelligence and production capacity with technology rather than humans.

Industrial Revolution 4.0 has created many opportunities for manufacturing companies to improve and thrive. Embracing automation and new technologies can launch companies forward relative to product innovation, production efficiency, and customer satisfaction, but they must be mindful that these advancements carry with them a new set of cultural and leadership challenges that must be considered.

Authors:

Toby Stansell

As Chief Operating Officer of THInc.IT, a division of Cherry Bekaert LLP, Toby specializes in advising clients as to how they can intelligently apply and leverage technology to improve operational and financial performance. Clients in the Firm’s THInc specialty practice benefit from his proven track record of architecting and deploying business process advancements within a systems framework to enhance productivity and profitability.

With more than 35 years of experience, Toby possesses a broad base of knowledge and expertise working with manufacturing and distribution sector clients in the arenas of order management, supply-chain planning/execution, ERP implementations, and lean materials management. His strong business technology expertise, combined with his executive management experience, helps clients capitalize upon transformative opportunities to increase the productivity of people and processes.

Jim Holman

A Director of Strategic Consulting of THInc.IT LLC, a division of Cherry Bekaert LLP, Jim has more than 25 years of experience advising clients with business flow, manufacturing and distribution processes, and analytical reporting. He serves as a consultant to the Firm’s Risk Advisory Services group and THInc specialty practice by helping clients improve and re-engineer business processes, identify redundancies, eliminate non-essential procedures, and reduce costs.

Jim’s strong technical expertise, combined with his business experience, enables him to deliver reliable solutions that blend the best technology and processes for meeting clients’ needs. His expertise within the industrial sector spans various functional areas, including manufacturing, costing, material planning, workflow, business intelligence, shop floor data collection, and mobile solutions. Additionally, Jim’s guidance extends to the infrastructure requirements that run multiple enterprise resource planning (ERP) systems, both on the client and the server side.