Without being extremely precise about what you are doing throughout the entire manufacturing process you can put people at risk. So following regulations and compliance standards are crucial for manufacturers – from back-end processes to production to the final product.
Now is the time for Manufacturers to Invest in Safety and Compliance
Q&A with Dr. Lewis Z. Liu, Co-Founder & CEO | Eigen Technologies
Tell us about yourself and your company Eigen?
I’m Dr. Lewis Z. Liu, Co-Founder & CEO of Eigen Technologies, the global intelligent document processing (IDP) provider. On a mission to make the world’s data useful, I founded Eigen in 2015 to transform data into actionable insights, regardless of source, so all organizations can make better-informed decisions that drive the best outcomes for their people, customers and investors.
We're a global team of data scientists, engineers, product strategists and experts in market data and documents. Our strength comes from the teams' depth and breadth of knowledge and understanding of the importance and value of data. While maintaining offices in London and Lisbon, we recently moved our global headquarters to New York to focus on our biggest market and support the next phase of our global expansion – all while ensuring we can better serve the Americas and our customers in the banking, insurance, healthcare, real estate and manufacturing sectors.
Why is it so important for manufacturers to invest in safety and compliance?
Manufacturing is one of the most highly regulated industries – even more regulated than banking and healthcare by certain measures. In fact, recent data from the RegData Project show over 217,000 regulatory restrictions to be relevant to the broad manufacturing sector – while finance and insurance, the second-most-regulated sector by this metric, has almost 100,000 less restrictions.
Most of this has to do with the end customer. For example, if it's a food product, a consumer product that is likely used every day, manufacturers must be extremely careful to keep toxins out, to ensure precision and quality throughout the entire process, to keep production and delivery on schedule and much more. All of this is regulated. On a bigger scale, consider the auto industry and how important each element, such as the axles that allow the wheels on your car to rotate, is to the end product. All these things fundamentally relate back to the health and safety of consumers day-to-day lives, leaving very little margin for error.
Without being extremely precise about what you are doing throughout the entire manufacturing process you can put people at risk. So following regulations and compliance standards are crucial for manufacturers – from back-end processes to production to the final product. We, at Eigen, were recently working with a customer that needed to sort through a large quantity of quality assurance (QA) documents as part of the regulatory process to ensure the product they manufacture meets the required standard. There are so many of these regulations, in which, the manufacturer is beholden to check and ensure quality and safety.
How has the pandemic been a priority reset for manufacturers?
Right now, there’s so much in the news about how supply chains are almost irrevocably blocked. And, not just by a pandemic, but by one-off problems such as the Suez Canal issue earlier this year, too. This a really big problem, and I think there are basically two ways of looking at this in terms of the supply chain.
First, you can look at this from a cost, time and materials perspective. So being able to manage your supply or your distribution downstream – what are your obligations, what are your rights inside the supply chain and being able to understand that is likely buried somewhere in your contracts. It could be buried in the communication that you have with your suppliers and with your customers downstream. As disruption increases from global forces, we’ve seen instances that have been driving inflation, like used car prices soaring due to the computer chip shortages happening right now. So, as we think about inflation, as a specter of the macroeconomic situation that's driven by these, these really these squeezes in supply chain.
Second, another angle to look at this is the impact on the insurance industry. We have seen how insurance companies and reinsurance companies have all been disrupted, particularly in insuring global supply chains. We've seen a lack of clarity and understanding on what's supposed to happen in the industry as a result of such unprecedented disruption. All of this causes manufacturers to reevaluate their investments and where they are allocating resources. Technology has the power to make a difference at every stage of the manufacturing process, and the pandemic has allowed manufactures to realize the need to leverage intelligent document processing as a key part of their operations – to harness the power of real-time data analysis amid industry-wide disruption.
Where should manufacturers focus their compliance needs?
There’s been an uptick in automation in manufacturing, not just on the physical side, but also in the digital and paper realm as well. These strides help manufacturers with their compliance needs, and there are some great AI-powered technologies available to automate quality assurance and quality control. Eigen fits into this mix by helping ensure companies stay compliant in the supply chain.
Remembering my earlier example, a manufacturer who absolutely needs to check quality assurance documents to make sure that the materials they're using in their products comply with the regulatory safety standards. That’s because they themselves don't have the quality control facility to check the raw materials, so they rely on a third party to ensure quality control is reviewed and submitted via a plethora of different document types.
And this highlights the value and insights that technology can provide in this industry – and that’s just one example, there are dozens of other areas in manufacturing where this same level of automation streamlines tasks and fuels better business decisions. Where some tech companies offer information just for the sake of information, Eigen extracts the data in a more actionable way that yields tangible results for better decision making.
What are some of the biggest barriers for a manufacturer to address this regulatory environment?
The single largest barrier is gross margin. Unlike many software companies, a significant number of manufacturing companies run on very tight margins. Running on a combination of thin margins and having to maintain compliance due to having the liability for the health and safety of their products, manufactures must check all those boxes carefully if they are to successfully automate these complex manual processes via technology solutions.
Leveraging technology allows manufacturers to automate QA document checks to save time and money by extracting data and insights from documents using AI rather than manually rifling through reams of paper, hoping you’ll find what you were looking for. At Eigen, we’ve seen clients realize between 50-95% cost savings of their existing manual processes, and if you can do that, you can really start to alleviate your gross margin problems.
What missteps do manufacturers need to be aware of?
On sustainability, manufacturing has really come under fire lately for being heavily polluting, which has been the case for a long time. Add on the climate crisis and today’s consumeristic digital-first society and you’ll find that technology can make a difference. For example, if we want to better understand and monitor our emissions or our chemical pollution, there’s software that can help track, interpret and process the relevant data. Think of how ESG environmental reports contribute to funding opportunities.
On the deployment of new technologies, there isn’t as much misunderstanding of the AI’s potential in manufacturing as there often is in other industries. There’s always been some type of technical or machine element to this industry, which results in manufacturers having a comfortable understanding of automation and of how a human interacts with a machine. Because manufacturing has always been a human-machine collaboration, there’s always been a unique mix of human and automated quality control –because of the extreme precision in which modern manufacturing operates. This is critical as it has allowed automation adoption to move at a faster pace than in other industries.
Can you share some successful use cases from customers and explain the benefits gained?
We’ve all felt the impact of unique supply chain challenges over the past 18 months, whether these issues were spurred by the pandemic, the infamous ship stuck in the Suez Canal or other factors. But for manufacturers shipping food products, the Suez Canal crisis had an even larger impact on their products because some of their input ingredients were destined to go bad as they sat stuck on a boat rather than moving through their supply chain on time to where they were needed. So, naturally suppliers and manufacturers started looking at what they can do to recoup costs and wanted to understand what that meant for their bottom line. While it would normally take weeks for an entire team of lawyers to manually sort through the relevant documents to understand and enact the legal rights of the manufacturer, Eigen’s technology was able to automate this process and rapidly find the relevant information. This provided the manufacturer with the ability to rapidly understand the rights they had in their contracts, so they could reach out to their suppliers and quickly renegotiate their positioning in this unique situation. In turn, this enabled better financial planning, so they could stay on top of their low gross profit margins even in this disruptive situation.
How can Eigen help manufacturers achieve safety and compliance?
Paper and PDF documents are ubiquitous in the manufacturing space, from your quality assurance documents to your contracts to your lab test results. All these documents represent processes that are subject to very strict regulation as well as health and safety protocols. By being able to extract all the key data out of these documents in real time, our clients are truly investing in automation in of their management processes, just as they do when they invest in automation on the shop floor.
Manufacturers need the same sleek tech-driven processes in their back offices that they have on their assembly lines, automating and upgrading their ability to make real-time decisions that support operations on a both a macro and micro level.
The content & opinions in this article are the author’s and do not necessarily represent the views of ManufacturingTomorrow
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