Why Automate?
According to the WorldMetrics.org report, 89% of manufacturers believe automation is key to increasing productivity. More importantly to increasing profitable growth, the report also finds that automation reduces manufacturing lead time by 75%. Adding expert insights from our special report, FutureScape: Crafting Tomorrow’s Supply Chain Today, there is no doubt that automation and the use of advanced technologies is cornerstone to success.
Our clients tell the story for us. For example, an industrial power supply manufacturer struggled with poor service levels and lengthy lead times for many months due to a rushed ERP system upgrade, and it certainly resulted in several unhappy customers during this timeframe. The planners and buyers reverted to manual planning to survive through and do their best to serve customers. However, until they automated the process and utilized MRP, it was an uphill battle.
Another client simply couldn’t find enough skilled resources to produce the product ordered by customers. Although they had one of the best leadership teams of clients over the last twenty years, there simply wasn’t enough skilled resources available in the small town and surrounding areas. Until they upgraded their machinery and equipment and automated their welding process, customer deliveries had to be prioritized, and the rest experienced longer lead times.
Additionally, as geopolitical and supply chain risks increase, more and more companies are reshoring and nearshoring production. As companies ramp up production in the U.S., they are taking advantage of the opportunity to automate. Not only will automation reduce costs and enable a superior customer experience with customization on the fly, but it will also reduce the need for as many low-skilled people to perform repetitive tasks, thereby improving safety, reducing worker’s compensation costs, and increasing quality.
Automation Opportunities
There are countless opportunities to automate and use advanced technologies in manufacturing and supply chain. Several are discussed in our FutureScape report. From robotics to additive manufacturing to predictive analytics to ERP, check out our examples.
For example, robotics is certainly a good place to start. Zach Dodds of Harvey Mudd College advocates for a balanced investment in both human resources and technology. In essence, people and robots must work collaboratively for success. Bryan Dow, VP of Dow Hydraulic Systems discusses AI, automation and additive machining. They had great success automating a bottleneck process to produce around-the-clock to meet customer needs at a lower cost.
Artificial intelligence is another hot topic. For example, Bruce Hoffman discusses AI-driven predictive maintenance, robotics and blockchain and how these technologies can help companies better manage supply chain risks and adapt to changing market conditions. Peter O’Sullivan also talks about AI and how it relates to inventory optimization in distribution and the logistics industry. In fact, we are collaborating as LMA is expert in inventory optimization and has built a SIOP (Sales Inventory Operations Planning) model with demand and supply alignment and inventory optimization for manufacturers.
Over the last twenty years of consulting, we have seen more bottom line results when partnering with clients on SIOP and related execution processes (demand and supply planning) and advanced technologies than any other priority. If you’d like to learn more about how to set up a SIOP process and achieve these results, refer to our book, SIOP: Creating Predictable Revenue and EBITDA Growth.
ERP, the use of data and predictive analytics is another area to highlight as a key opportunity to drive bottom line results. As Tim Harris says, predictive analytics is revolutionizing supply chain management. Whether improving your sales forecasting accuracy as part of the SIOP process to upgrade your demand plan and better align your operations in the most efficient manner, optimizing your inventory plan to accelerate cash flow, or providing intelligent insights to increase customer engagement, there are a plethora of opportunities to automate with ERP.
If you are interested in reading more on this topic:
Industrial Robotics for Manufacturing & Supply Chain Success