Some manufacturers are stuck in the past. Those still using legacy systems are crippling themselves with a lack of connectivity that hinders production and response time. Manufacturers at the start of their modernization journey have the most to gain from upgrades to their data management and automation processes. In fact, according to Harvard Business Review, about $1 trillion is left on the table each year due to a failure to digitize.
Global unrest, COVID-19, war, climate change and economic uncertainty all exacerbate existing manufacturing and supply chain challenges. For example, the war in Ukraine crippled the 2022 wheat supply, which had a trickle-down impact on food manufacturers around the world. Eventually, the disruption reached consumers, with shortages of products and price spikes for available inventory.
Similarly, COVID-19 caused massive supply chain disruptions due to port closures and worker shortages. Inventory tracking was more challenging than ever, if not impossible, because at times there was no inventory to track, or no one on-site to track it. And the long-term downstream impact has been felt for years in the form of electronic components and automobile shortages. Recently, the semi-conductor chip shortages were so severe Congress had to step in.
It is not just raw material shortages and supply chain disruptions making headlines; quality is a top concern as well. Plant closures due to quality issues caused mass shortages of baby formula that had mothers scouring the shelves to feed their babies. Even the quality of pet food came into play of late, as salmonella contamination forced the recall of thousands of pounds of dog food, which resulted in a spike in pet food prices.
Leveling Up Technology with a Digital Thread
New technology and digital transformation allow companies to collaborate on a new level, creating a highly digital environment that promotes better data sharing, transparency and communication. This leads to a great level of connectivity, and acts as a thread connecting the shop floor to the top floor, then outward to partners and customers. Maintaining connectivity between departments and locations ensures traceability of products and transparency across the enterprise, and gives decision-makers advance notice of potential issues. This gives them more time to plan and act proactively on market challenges in real time. Having a single source of truth, in one centralized location, gives stakeholders the ability to evaluate the facts and make the best decision at the right moment.
Another analogy for digital connection is the Florida Keys and the intercoastal highway. The Florida Keys in this analogy are the islands of operations, and the equivalent of the intercoastal highway is connected smart manufacturing solutions. Historically, people needed to move from island to island on boats. Now 40+ bridges and more than 100 miles of roads over waterways make for much better and streamlined connectivity. Similarly, manufacturers in the past have relied on paper and legacy systems at their various islands of operation. But with a digital thread acting as a bridge between departments and siloes, connecting information to flow freely and easily.
These smart manufacturing platforms connect operations and employees, making data structured and un-siloed. By collecting data across the entire lifecycle, from research and development to production to delivery to the customer, the digital thread informs all the systems of a product's entire lifecycle and journey. In this analogy, the islands were disconnected, and sharing information between each of them was an arduous process, but now it's not, just like people no longer need to wait for a ferry to travel through the Florida Keys.
Don’t Miss the Boat
By having real-time production data available at the ready, organizations can track critical KPIs throughout production lifecycle, and can adapt strategically and dynamically as production progresses. This allows operators to make decisions faster and more accurately. More open and transparent communication between production stages and partners also makes manufacturers better partners than those who don’t adopt modern practices for open communication.
If agility is the main objective of manufacturers — a strong digital thread provides that. During uncertain times businesses must do two things: reduce waste and protect revenue. Modernizing systems creates opportunities for both objectives, while also strengthening the supply chain and preparing for the future.
Weaving Together a Strong Digital Thread
A strong digital thread can be woven to increase productivity, protect against volatility and boost profits because when manufacturing, quality management and supply chain planning systems are all working synchronously, manufacturers are better equipped to adapt and respond to supply chain disruption when it occurs.
Ara Surenian is vice president product management at Plex Systems.
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