Why Digitization is the Key to Manufacturing Resiliency

Posted by Andreas Ehrenfeuchter on February 23, 2021

Business woman making analyses and checking fingerprints on tablet

Resiliency is essential to running an efficient and successful supply chain. Your organization must react quickly and respond to unexpected situations so that you can return to regular operations as soon as possible, with minimal losses. Especially this past year, businesses have learned the importance of resilience – but how do you achieve it? To quickly and successfully recover from disruptions, your organization must reflect on where improvements can be made in its management and supply chain operations. It is vital to determine the best-fit metrics, processes, and technology for your organization to achieve manufacturing resiliency.

As business processes are rapidly transforming to keep up with the digital world's needs, your organization needs to match this speed. So how do you maintain a fast-paced supply chain while incorporating new initiatives and continue to run a successful business? The greatest strategy to developing manufacturing resiliency is through digitization- converting your supply chain into an integrated sequence of planning and production solutions that work together to create a more cohesive supply stream across each touchpoint of the supply chain. The result of digitizing your supply chain is a more responsive, agile, and transparent supply network, ready to adapt to various changes and disruptions. In the most basic sense, you can achieve this by switching to a cohesive digital management and supply chain system equipped with AI and machine learning to help you predict, monitor, and manage every aspect of your supply chain.

Overall, digitization will help your organization break down cross-organization silos and collaboration barriers – two significant obstacles to overcome when dealing with several suppliers, partners, and production facilities. In addition to making you better equipped to handle these obstacles, digitization will allow you to incorporate Big Data and cloud computing better, allowing you to have greater data gathering, reporting, and analytics capabilities. With these advantages on your side, your organization will become more resilient than ever.

 

Benefits to Digitization

Now that you are familiar with what supply chain digitization entails, we will detail the benefits it offers. One of the most significant benefits of digitization is the holistic integration of supply chain solutions. While organizations often have several different planning, production, and data reporting systems deployed simultaneously, a digital supply chain allows you to bring each system under the same umbrella. In implementing this strategy, you will eliminate functional silos and increase communication regarding planning and production benchmarks and goals. When working towards this, it’s important to remember the holistic aspect – you should think of all of your supply chain solutions as parts of the same whole rather than individual functions.

Integration of data systems leads us to the next major benefit of digitization, the connection of data sources and outlets. The Internet of Things (IoT) has become a strong force in recent supply chain management planning, not only through connecting systems and solutions but also by cultivating more accurate, responsive, and accessible data management and analytics. With the IoT, digitizing your supply chain merges the various data collecting and evaluating methods to create more accurate forecasts by looking at each system as a holistic whole – the big picture.

This brings us to the third benefit, improved collaboration. As mentioned previously, digitization will help you to eliminate silos across the organization, including communication silos. This means that team members will have a greater capacity to share data, collaborate on projects, and work together to ensure smooth workflows. When there are miscommunications in the supply chain process, it increases the chance of bottlenecks, disruptions, and breakdowns. By incorporating a digitized supply chain based in the central hub of data storage, you create more access points that provide room for communication and supply chain visibility. With access to fully transparent and precise data, your team will be able to communicate in real-time and see the complete project in front of them, ensuring a smooth and seamless workflow.

 

How to Achieve Digitization

Train moving fast in tunnel

Having discussed how your organization will benefit from a digitized supply chain, it’s time to learn how to achieve it. First and foremost, you should align your technical and operational goals - you must set operational goals conducive to going digital. This will help you determine which technological advancements are a good fit for your short-term and long-term goals and help you decide which systems you should integrate. Next, it is essential to involve all stakeholders included in your operations. Since the supply chain impacts a significant part of your operations, going digital could affect stakeholders in several ways. As you're making decisions regarding digitization, open a communication channel to receive various inputs from those involved. Without this integration, you could run into future problems such as new software being incompatible with an existing planning system, so it is vital to include as many stakeholders as possible in your push for digitization.

While every digital supply chain will be different, we find some features to be universally beneficial and available for integrating digitization. Adopting IoT devices with related technology to provide smart tracking and reporting is a necessary first step for any organization to achieve an integrated digital supply chain. IoT devices combined with a digital infrastructure provide you with a roadmap for further digitization, allowing you to plan out what other digital systems you require for seamless digital production. Following this, you will need to develop analytics capabilities - this requires determining where you should invest your financial resources. You must decide which supply chain management software and technological upgrades will best fit your digitization plan, but focusing on analytics capabilities is a strong start. In doing this, you will get the most out of the data provided to you and will be able to leverage the digital data streams you receive into improved forecasts and process improvements. Receiving accurate data is important, but understanding and interpreting it is vital.

Our final suggestion to achieving supply chain digitization is embracing Industry 4.0, the fourth industrial revolution. It is vital to understand that you are not merely adding a few technical tools to your supply chain operations but also reinventing it. This revolution is about more than just maximizing the value of your data; it's about combining human and digital competencies to create cyber-physical systems. Technology has evolved past merely alerting you of issues and can now realize them and correct them automatically. Beyond this, it can calculate late shipments and automatically reorganize the supply chain to provide you with a transparent solution to the problem. While such drastic changes can be daunting, it is vital to keep an open mind and understand that this is the future of supply chains. Take these innovations in stride and look for opportunities to integrate new digitization strategies into your organization. With an automatic and transparent digital supply chain, your organization will be the peak of resilience - able to predict and prevent supply chain disruptions before they have the chance to occur.

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Topics: Digitization, Lean Manufacturing