The half-life of a successful product or business strategy is shrinking, and the rate of change is accelerating, primarily due to increasingly complex and quickly changing customer demands. Succeeding in this new environment requires nimble, innovative and fast-moving businesses and factories. That means you need to continually change what you’re doing, even if it’s been successful so far. Because what worked in the past may not necessarily work in the future.
Inflexible, traditional multiyear strategic plans are evolving into more agile plans, with a vision and road map designed to flex with changing market conditions. Built to maintain an ongoing competitive advantage, such approaches could use smart manufacturing to permeate the business, not just support the manufacturing operations.
If you employ a smart manufacturing strategy to meet these challenges, you need to focus on the two characteristics that matter most: agility and sustainability.
The ability to quickly adapt to changes anywhere within the business requires that each part of the business is able to instantly communicate across the enterprise. From sales and product development to production and delivery, being able to sense and respond to business signals increasingly defines manufacturing business success.
Consider snack food giant Mondelez, which is, among other things, racing to capitalize on the new opportunity presented by a fast-growing middle class in developing countries. (Full disclosure: Mondelez is a Rockwell Automation customer.) These new markets each come with different expectations, from package size to flavor, and require different combinations of localization and customization. In developing countries, for example, customers aren’t willing or able to buy the 64-pack of Oreos; they want a smaller package.
To achieve such flexibility, Mondelez leverages smart manufacturing to connect business data in the executive suite to operational data in the factory, as well as to make its factories more responsive, reliable and predictable — right down to the individual production line. Similarly, Sanmina — a San Jose, California-based contract manufacturer of optical, electronic and mechanical products — has leveraged smart manufacturing to meet the fast-changing demands of its OEM customers. Its cloud MES solution, 42Q, enables quick deployment of no-touch automation and equipment connectivity, based on 150-plus built-in in APIs. The solution enables real-time closed-loop process control, real-time analytics and real-time global supply chain visibility.
Smart manufacturing strategies give business leaders this global view of their business, along with the ability to identify and meet specific local needs. In the most advanced implementations, it allows you to know your customers so well that you’re able to anticipate, not merely meet, their needs. The quintessential example is Amazon, a company that scoops up so much data on customer preferences that it sometimes seems to know more about you than your family members.
The visibility across the enterprise also enables the “make anything, anytime, anywhere” strategy, where production is shifted from one factory to another to meet changes in demand and to address production bottlenecks.
Two critical aspects of sustainability are supported by smart manufacturing. On one level, it supports a company’s fundamental business by automating and making every process more efficient. It helps keep costs down and productivity up while increasing an organization’s ability to quickly respond to market conditions. It also delivers the information needed to more easily understand and control problem areas and implement new capability.
On another level, smart manufacturing enables companies to drive such improvements while supporting the ability to achieve success in each part of the triple bottom line — financial, social and environmental.
Research by the World Economic Forum’s Digital Economy and Society System Initiative, conducted in collaboration with IoT Analytics, found that 84% of existing internet-of-things deployments are helping to meet the UN’s sustainable development goals. The research noted that the potential impact of IoT on sustainability goals is so large because it enables remote measuring and control, such as a remote water-monitoring solution that ensures clean water or smart lighting initiatives that reduce power usage.
Of the IoT deployments analyzed, 95% are small or medium in scale, but a significant number are successful within the most commercially viable industries, according to the report. This suggests “an opportunity to scale up some of these projects to large or macro size.”
Making The Customer Central
Though your company’s specific pain points are likely different from those of the companies mentioned here, no doubt you see similarities. You must get “closer” to your customers so you can learn what they want and need. Your top brands must be constantly updated to keep them relevant. Your production must be excellent — and continually improving and reducing costs. You need to deliver the right product at the right price to wherever your customer requires. Your customers are demanding that you operate in a socially and environmentally responsible way. Market signals are coming in from more sources than ever, and delivery channels are proliferating. Customization and localization, while serving customers anywhere in the world, are expected.
Achieving an agile, sustainable business relies on having the information to make decisions and respond quickly. With such market dynamics dictating the pace of change, smart manufacturing strategies are crucial to helping companies succeed.