- What I learned at the 2015 Gartner Supply Chain Conference
There is no denial that the manufacturing industry is in a period of evolution to support a new digital business world. New companies are popping up with new business models, some companies will slowly be left behind, and a few companies will figure out how to transform and adapt to take advantage of the new markets and business opportunities. Companies that do not evolve will not be able to compete against new business models like mass customization and product-as-a-service. Examples of companies on this evolutionary path were presented at this year’s Gartner Supply Chain Conference in Phoenix, Arizona.
In this new digital manufacturing world, a Manufacturing Execution System (MES) is a requirement, not an option. An integrated MES system is needed for a digital thread into the plant floor and the supply chain in order to streamline and automate procedures to support use cases like single unit work orders where each order in the sequence builds a different custom product configuration. MES users are reporting more than cost and quality improvements. They are experiencing improvement in employee engagement and flexibility.
The Industrial Internet of Things (IIoT) is real, not only within plants but also into the supply chain. Gartner is predicting 30% more connected devices every year with more open standards. Current IIoT examples are merely providing a glimpse into the future potential of the Smart Factory. The roadmap for the Internet of Everything (IoE) in the connected supply chain includes increased visibility, proactive issue resolution, enhanced customer experience, data anytime and anywhere, and multi-tier value chain collaboration.
The complexity of mass customization requires tighter integration of Product Lifecycle Management (PLM), MES and Supply Chain Management (SCM) systems. Starting with product design and manufacturing simulations, taking advantage of 3D printing and robotics and smart manufacturing machines and processes that can setup themselves to each product’s custom configuration. The factory of the future will be focused on capability rather than capacity. The next level of integration in the digital thread will require more CAD vendor openness and support for standards like ISO10303.
Many examples were given showing great strides in the connected supply chain for some industries for demand sensing and inventory visibility, but Quality is currently a missing link in supply chain management. There is a great opportunity to improve the digital thread for managing quality, not just for transmitting requirements and data collection but also for handling issues and corrective actions more efficiently in a multi-tier supply chain network.
Companies that want to transform will need more “Mode 2” versus “Mode 1” type of business investments.
* Mode 1: Reduce cost, increase capacity and utilization, plan driven, setup for batch production, proprietary integrations
* Mode 2: Focused on agility, capability, demand driven, order qty 1, integration of IT and OT
Organizations must appoint change champions and start working on the following types of initiatives:
- Transforming the workforce to embrace learning new skills, flexible work skills and performance transparency across departments and divisions of the organization and partner network
- Moving from custom and proprietary integration to open standards to support the Industrial Internet of Things and Smart Machines
- Convergence of IT and OT (Operations Technology) integrating plant floor, enterprise systems, mobile, cloud and social technologies
- Smart products that can store and exchange information with smart machines and smart manufacturing processes about their configuration and state
- Taking business and manufacturing intelligence to the next level developing predictive and prescriptive analytic capabilities
If you have access to the Gartner presentations, the following is a list of my favorite presentations from the conference:
- “Operational Strategies for a Digital Business World,” Dwight Klappich, William McNeil “Product Innovation Platforms: Managing Complex Product Life Cycles,” Marc Halpern
- “The Emperor’s New Clothes and the Factory of the Future,” Simon Jacobson
- “How to Avoid the Pitfalls of MES Implementations,” Rick Franzosa
- “Quality: The Missing Link in Your Supply Chain Strategy”, Simon Jacobson, Gartner SCC 2015 Conference Presentation
- “Supplier Quality 2017: The Multitier Quality Frontier,” Ray Barger
- “Leading Supply Chain in a Digital Business,” Mike Burkett
- “Internet of Things in Supply Chain: What’s Real Now?” Mike Burkett
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