Are You Ready For These Trends In Manufacturing?
There’s no doubt: this is an exciting time in manufacturing. What would have seemed impossibly futuristic a few years ago is already happening on a few leading-edge factory floors today. Consider these trends originally published in Manufacturing Business Technology and start planning out your strategy to gain a competitive advantage.
The Connected Economy Will Become More Pervasive
With IDC projecting that the global Internet of Things (IoT) market will be worth $1.7 trillion by 2020, enterprises from all sectors are embracing the opportunity to deliver and take advantage of the connected economy. Once thought of as the domain of large enterprises, the connected economy is now wide open to midsize companies, as well — especially those in the manufacturing sector. Leveraging cloud technologies to connect employees, customers, partners and devices together is fast creating new ways of doing business. Never before has there been a greater opportunity for innovative manufacturers to quickly and economically become part of the connected economy, driving their company’s growth and exceeding their customers’ expectations.
For example, the Scott Fetzer Electrical Group decided to build “smart” products so they could track service requests and, with the information on-hand, build better products. To accomplish that, the company knew its first step would have to be upgrading its back-office systems, including ERP. Only with the right ERP could the company achieve the integration it needed to join the connected economy.
Multi-Modal Products & New Business Model Support
The changing market for products and services means businesses must move from a single SKU per product to a bundled product with affiliated services (warranty, monitoring) and subscriptions. Organizations’ existing back-office systems, including ERP, will need to adapt to this new business model and support effective management and monetization of bundled and multi-modal products. For example, a division of Philips is implementing cloud-based ERP specifically to address new revenue opportunities with the connected economy and ensure they can track product, subscription and service components in one system.
Turn Real-Time Analytics Into A Competitive Advantage
Companies have already begun to receive real-time analytics from IoT on the manufacturing floor and throughout the supply chain. ERP — specifically, cloud-based ERP solutions — can play a critical role in helping decision-makers leverage this real-time data at every stage in the manufacturing and sales cycle.
On the factory floor, sensor-embedded factory equipment can communicate data about parameters such as the temperature and utilization of the machine, so companies can change equipment settings and process workflow to optimize performance. On the customer side, IoT provides manufacturers unprecedented access to data on how people are actually using their products, enabling them to refine their offerings to better suit individual customers or markets. And for consumer goods businesses, access to real-time data about inventory and third-party data about competitive pricing can help manufacturers make better use of trade promotions to incentivize distributors and boost sales.
Manufacturing-as-a-Service Enabled by Cloud ERP
The Manufacturing-as-a-Service model enables businesses to use a factory and pay only for the production time they need, rather than investing capital up front in building or buying a facility that they don’t yet need 24/7. This data-intensive model has been out of reach for most companies, but that’s changing. Adoption of cloud ERP — as well as increased machine learning, adoption of IoT sensors and supporting data models, and advanced intelligence— makes it easier for companies to interpret and act on data, and brings the benefits of this cost-effective model within reach for more companies.
Read the full article on Manufacturing Business Technology by Stewart Florsheim and learn about other trends such as how “Subscriber Culture” will change customers’ expectations.