Tuesday, June 26, 2018

Smart Manufacturing is Now: Here’s Why

This blog is a MESA Member Point of View

By: Julie Fraser, MESA Smart Manufacturing Research Program Leader

Join MESA's Smart Manufacturing Community and its LinkedIn Group for more research. 

What is your answer to this quick question? Is Smart Manufacturing a concept to act on
    a) In the future
    b) Now

If your answer is (a) future, you face a risk. I don’t want to sound pedantic, but the best answer is: (b) the time for Smart Manufacturing is now. It may sound counter-intuitive, but it’s actually the safe answer.

Why? Because most manufacturers have at least one Smart Manufacturing project or initiative underway. Those who have not yet started on the journey risk falling behind.

That might be an obvious statement when it comes to technology. In fact, one of the key objectives for most of those who have implemented Smart Manufacturing is competitive market pressure to keep up with technology advances. 

The risk is much broader than “falling behind on technology advances.” For that objective, I would focus more on competitive pressure. Many companies have been experiencing stiff, often unexpected and unprecedented competition in their market. Customers and brand owners seek out suppliers who have become more efficient, provided better services, customized products, or improved quality. In some cases, they buy from disruptors who have changed the price point, the way they can buy, or made the offering more sustainable or valuable.

The risk is to not be one of those preferred and disruptive manufacturing suppliers with which customers and brand owners are undertaking Smart Manufacturing initiatives already. This is one of the key findings of the on-line survey MESA conducted in conjunction with IndustryWeek magazine and Iyno Advisors.

This study shows that 63% of the manufacturing respondents are already working on Smart Manufacturing projects. In fact, 44% of them have implemented multiple projects.

As I said, the reason for this action appears to be strategic. Most Smart Manufacturing programs are driven by executives or senior management. Beyond the objective to keep up with the competition, companies also expect these initiatives to lead them to be more efficient, lower their operating costs and improve quality control and outcomes. This sounds like previous generations of manufacturing IT initiatives. Where it starts to diverge is the objectives for improved customer service, faster new product introduction (NPI), and new business models or value to customers.

Companies who gain some capabilities in those areas, particularly multiple of those areas, are likely to be the competitors to watch. Implementing Smart Manufacturing projects now will begin to deliver benefits that the company can then build on to further secure a strong position in the market.

Today’s economy rewards speed and agility – particularly if it truly improves value to the customer. Manufacturers have been expanding their capabilities in these areas for years, but Smart Manufacturing is a about building a new ecosystem. One where processes are automated, integrated, monitored and continuously evaluated based on all available information for timely orchestrated and optimized execution. This proactive management of operations across both an enterprise and its supply chain allows companies to be more agile and responsive to rapidly changing customer demands.

So, while Smart Manufacturing paints a picture for the future, the time to act is now. Others have started down that path, and with executives driving initiatives toward disruptive strategic business goals, progress is likely to be swift.

The real risk is that your organization won’t keep key stakeholders happy and will be left out of new manufacturing ecosystems. Companies that develop and join early the new Smart Manufacturing ecosystems can reap rich benefits for customers, shareholders, and employees. 

Download the full report here.

To accelerate your progress, join the Smart Manufacturing Research Community here.

With over 25 years of passion and experience as a manufacturing systems industry advisor and researcher, Julie Fraser is Founder and Principal of Iyno Advisors, Inc. and a lifetime member of MESA International, joining the organization in its first year. 

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