As more manufacturers adopt Smart Manufacturing and manufacturing operations management methods increasing connectivity and data availability within their organizations, they are also realizing that a connected supply chain becomes a strategic competitive advantage in the marketplace. A report from Gartner predicts that in five years, 50% of large organizations will compete as collaborative digital ecosystems rather than discrete firms, sharing inputs, assets, and innovations. [1] A new degree of collaboration and integration in new manufacturing ecosystems enables not only enhanced visibility, but also increased speed and resiliency.
The rapid adoption of digital technologies keeps fueling disruptive change in the marketplace. Computer technology, so small it fits comfortably into our mobile phones, has become nearly completely embedded in consumers’ lives and is making its way into industrial equipment, enabling information sharing, communication, and operational analysis in real time. Internet access and Wi-Fi has become widely available at an affordable cost. Consumers use mobile devices to shop and order goods using real time information about inventory availability and receive same day delivery of their orders.
Speed and data are the currency of today’s supply chain. Companies that learn to coordinate a supply chain in real time are becoming better options for their customers, quicker to see new opportunities in the market, and quicker to respond to disruptive changes in their markets.
The supply chain woes that resulted in weeks of empty shelves and missed deliveries during the COVID-19 pandemic highlighted the need to enhance collaboration features in the supply chain to become more resilient and improve the ability to absorb, adapt and recover from a disaster or disruptive event. In fact, according to Accenture [2], companies are increasingly prioritizing restructuring their supply chains and approaches to production to counteract disruptions.
Manufacturers are not only enhancing traditional supplier management features like procurement and issue management, but they are also implementing enhanced features like demand-capability matching, dynamic fulfillment, and product data services. The new ecosystems favor suppliers with specialized modular capabilities and services that can be recombined and scaled as required to accommodate market and supply chain changes.
In this journey to a highly connected ecosystem, small and medium manufacturers (SMMs) can take a low-risk incremental approach as long as they establish and follow a strategic Smart Manufacturing roadmap. Practical tools to establish such a roadmap are accessible to manufacturers through CESMII – the U.S. Smart Manufacturing Institute [3].
Manufacturers can first establish the internal technology-enabled, insight-driven infrastructure and culture required for transparency and collaboration. Cloud services and B2B integration can help them take that collaboration to a new level in the supply chain. Examples of the incremental approach are found in a guidebook from MESA International [4]. One example describes how a manufacturer rolled out modules in multiple stages:
- Production Monitoring – real-time visibility into the performance of production activities
- Quality Tracking – incorporating smart digital attachments and measurement devices (e.g., calipers, gauges) to wirelessly transfer the measured values to a tablet SM app for the inspector
- Material Requirement Tracking − real-time material availability status updates to the shop and ERP to proactively avoid machine starving time due to material non-availability
The solutions were implemented gradually in one plant with an initial investment of around $20K before they were rolled out to four more plants. The benefits realized included improvement of data accuracy, product quality, reduction of material loss and rejected parts yielding savings of $32K within 18 months. Another example describes how a manufacturer extended these smart methods into their supplier chain to improve the visibility of component inventory commitments and remove the uncertainties that were causing delays in their production and client deliveries.
Check out the CESMII resources and the MESA guidebook for more examples on how your company can get started on the Smart Manufacturing journey.
References
[1] Gartner Predicts 2022 Supply Chain Strategy, S. Bailey, N. Sandrome, Gartner, 2021
https://www.shippeo.com/en/resources/gartner-predict-2022-supply-chain-strategy
[2] Why supply chain innovation paves to road to resilience, M. Reiss, Accenture, 2021
[3] Smart Manufacturing Business Transformation Tools, CESMII – The Smart Manufacturing Institute, 2022
https://www.cesmii.org/sm-acceleration-toolkit/
[4] A Low-Risk, Incremental Approach to Smart Manufacturing for Small & Medium Manufacturers, A. Seshan, C. Leiva, S. Zippel, R. Spurr, M. Ford, J. Zhu, J. Winter, MESA International, 2022
https://www.pathlms.com/mesa/courses/39290
Comments