As more manufacturers adopt Smart Manufacturing 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. A new degree of collaboration and integration in 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. Consumer-facing technologies have become embedded in our lives and are increasingly making their way into industrial operations, enabling information sharing, communication, and operational analysis in real time.
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, and quicker to see new opportunities in the market and respond to disruptive changes.
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, companies are increasingly prioritizing restructuring their supply chains and approaches to production to counteract such disruptions.
Manufacturers are not only enhancing traditional supplier management features like procurement and issue management, 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-sized manufacturers can take a low-risk incremental approach as long as they 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.
However, manufacturers should first establish an internal technology-enabled, insight-driven infrastructure and culture for transparency and collaboration. Cloud services and business-to-business integration can help them take that collaboration to a new level in the supply chain. Examples can be found in the Smart Manufacturing guidebook from MESA International. 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 measured values to a mobile app for the inspector; and
- Material Requirements Tracking—realtime material availability status updates to shop floor systems 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 $20,000 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 $32,000 within 18 months. Another example describes how a manufacturer extended these smart methods into their supply chain to improve the visibility of component inventory commitments and remove uncertainties that were causing delays in their deliveries.