Those manufacturers that digitize their operations will gain significant advantages, and those that don’t will have a more difficult time catching up.
Is now the time for Manufacturers to accelerate the Digital Transformation process?
Q&A with Paulo De Matos, Chief Product Officer | SYSPRO
Is now the time for Manufacturers to accelerate the Digital Transformation process?
Business leaders within global manufacturing and distribution sectors have shown urgency in embracing digital transformation to overcome the disruption caused by the pandemic. In February, IBM released a report showing that two-thirds of manufacturers have accelerated their adoption of digital technologies due to their experience during the pandemic. Those manufacturers that digitize their operations will gain significant advantages, and those that don’t will have a more difficult time catching up.
We conducted a similar survey in 2020 that uncovered essentially the same trends. Specifically, we found that:
As social distancing became the new normal, entire workforces needed to connect as well as collaborate remotely. Based on survey findings, nearly half of businesses were unable to function effectively due to a reliance on their operational staff only being able to function from the work premise. In a shift towards remote work and increased collaboration, 73% of businesses stated they would need to invest in technology to facilitate remote working capabilities in the future.
Unsurprisingly, the survey showed that 60% of businesses were impacted by supply chain disruptions during the pandemic. With the increasing shortages of parts, manufacturers and distributors started looking to find alternative supply sources and establish more resilient supply chains. This shift in strategic sourcing and procurement as well as a high percentage considering re-shoring, is now being considered as a viable option worldwide. As a result, 42% suggested they will consider reshoring to overcome supply chain disruptions and ensure supply-chain resiliency
Digital transformation is therefore an imperative for manufacturers to overcome future disruptions, embrace new business models and ensure quality and control.
Tell us about SYSPRO
SYSPRO is a leading, global Enterprise Resource Planning (ERP) software provider, specializing in key manufacturing and distribution industries. Our Industry-built solutions and services are designed to make things possible.
SYSPRO’s ERP solution empowers customers to take the next step – whether it is expanding into new territories, adding new product lines, transforming business processes, or driving innovation. Through our ERP software, customers gain access to solutions, processes, and tools to assist in the management of data for key business insights and informed decision making. The solution is scalable and can be deployed in the cloud, on-premise, or both, and accessed via the web on any device to provide customers with choice and flexibility.
As a trusted advisor, SYSPRO remains focused on the success of partners and customers. With a strong commitment to channel partner growth, SYSPRO customers are backed by a team of global experts that drive maximum value out of IT systems and business solutions. We are committed to addressing the unique needs of our customers, enabling them to easily adapt and remain resilient.
Our evolving solutions are aligned with industry trends and leverage emerging technologies that will enable partners and customers to secure a digital future and to gain a competitive advantage.
Why is it so important for manufacturers to invest in digital transformation?
I think the pandemic is a great illustration of digital transformation’s importance to manufacturing. The crisis exposed weaknesses in the supply chain. Companies can increase their supply chains’ resiliency through dual sourcing, but that adds a lot more complexity, which generally requires digital technologies to manage effectively.
It also illustrated the importance of connectedness for the industry to engage with all stakeholders (suppliers or customers) in real time. In many cases, organizations relied on disparate systems and needed manual interventions.
With this realization, manufacturers and distributors have started to look at systems underpinned by meaningful data to secure their digital future.
ERP can support manufacturers to digitalize by providing the systems and platforms that resolve the biggest areas of impact; remote workforce enablement, implementation and automation of business systems to handle procurement and sourcing policy changes, distribution and lead time planning; and analytics providing data real-time to support improved decision-making. While there has been downtime, manufacturers have the opportunity now to make a change to improve operational efficiency and thrive now and into the future.
How has the pandemic been a priority reset for manufacturers?
It showed in stark relief how much better prepared organizations that had already undergone significant digital transformation were to weather the storm. Those who had embraced automation were better able to operate with personnel working from home. If they’d invested in digital supply chain management, those that leveraged it to take advantage of dual sourcing may have been able to continue production while those that didn’t had to sit idle.
Manufacturing has learned a great lesson. We’re seeing a massive increase in digital investment across the board.
Where should manufacturers focus their digital transformation efforts?
It depends on their business growth strategy and the industry pain points that a company needs to solve. Those looking to enter new markets and grow existing revenue streams should focus on aspects of their business where they can accelerate revenue growth, such as creating an automated self-service business engagement model.
There’s also a lot of opportunity for digital transformation with suppliers. Supplier portals, for example, give a manufacturer two-way visibility that enables both parties to make informed decisions based off of dashboards. Both can plan more proactively.
So, I can’t give you a single answer. Every company is different, and every industry is different. Each organization has to look at its business strategy and evaluate where in their business digitalization will best advance their goals.
What best practices should manufacturers embrace as they undergo an accelerated digital transformation process?
Always keep your strategy in mind as you execute, and work closely with all stakeholders to ensure you are all aligned. Also, remember that digital transformation is more than just technology. You’ll need to rethink and change the processes that these new technologies will support. Communicate regularly to the entire company about what changes are coming, why you’re making these changes and how they will ultimately benefit everyone. The message needs to be consistent and repeated from all areas of leadership. Arguably, managing the human element of digital transformation is more complex, difficult and important than the technology.
What missteps do manufacturers need to be aware of?
Over the last year, the success of the companies that already had a digital initiative in place was remarkable when compared to those that did not. It has become clear that the better the flow of data and information, the better the flow of goods.
While it has also become clear that improved technology is required to compete on a larger scale, for many manufacturers and distributors, the prospect of digital transformation is still very daunting. Some will avoid it altogether because of misconceptions around time and financial investment. Here, digital transformation needn’t be an ‘all-or-nothing’ investment. For example, manufacturers can start off by investing in Shop Floor Data Collection solution – widely regarded as a good starting point to collate data. With your data in hand, the next step is the analysis and manipulation of data to produce meaningful insights into the process. This requires a platform that can integrate both internal and external data (like the Internet of Things) and deliver an end-to-end snapshot of the business. Enterprise Resource Planning (ERP) is a platform that is able to collect all of the data and using some form of analytics, interrogate and develop management information for the organisation.
Another misstep occurs because companies fail to achieve complete buy-in from all stakeholders, which includes executives, employees, customers and suppliers. If customers resist digital invoicing, it won’t matter how much you invest in it. Likewise, if employees go around the new systems to do things the old way, the efficiencies you’re looking for won’t materialize. Here ongoing training and upskilling is vital, to ensure maximum ROI from digital transformation initiatives.
How does SYSPRO help manufacturers achieve digital transformation?
ERP (Enterprise Resource Planning) provides the platform to automate, integrate, and digitize business processes. An effective ERP system offers multiple benefits to help with overall business performance and can help your organization with its digital transformation. It is a cost-effective entry-point into digitalization and allows you to get the fundamentals of digitalization right, prior to expanding into the more complex and costly technologies.
An ERP can help you to automate, and integrate core business processes, such as taking customer orders; scheduling operations; and keeping inventory records, and financial data. Correctly implemented, it can also provide intelligence, visibility, analytics, and efficiency across every aspect of a business. This will enable employees to contribute at a higher level, and make decisions from a well-informed position, and will foster better communication and collaboration across the business.
SYSPRO is a leading, global Enterprise Resource Planning (ERP) software provider specializing in key manufacturing and distribution industries. For over 40 years, SYSPRO’s team of specialists have continued to address unique industry needs and enable customers to easily adapt and grow. The solution is scalable and can be deployed in the cloud, on-premise, or both, and accessed via the web on any device to provide customers with choice and flexibility.
SYSPRO remains focused on the success of partners and customers. Our evolving solutions are aligned with industry trends to leverage emerging technology that will enable partners and customers in securing a digital future.
About Paulo De Matos Chief Product Officer, SYSPRO
With more than 25 year’s ERP experience, Paulo has made a tangible impact in the areas of sales and product development. Paulo is an industry expert who is passionate about developing the right ERP product solution for customers within the manufacturing and distribution sectors.
In his role, Paulo is responsible for ensuring that maximum business value is achieved from SYSPRO’s offerings in the market. He and his team determine this through ongoing research and identifying industry trends to anticipate users’ aspirations and industry-specific requirements. Through his contribution to product proficiency, SYSPRO customers experience improved productivity, bottom-line results and accelerate time to value.
The content & opinions in this article are the author’s and do not necessarily represent the views of ManufacturingTomorrow
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