The Challenges of Manufacturing Transformations

Introduction

“Cutthroat and quick.” Those two words sum up the state of the modern manufacturing industry. Customers want the lowest possible prices, abandoning long-term relationships to save money. They also want their products and they want them Now. It makes no difference to some companies that the containers that move their goods are stuck on a freightliner offshore: the client wants their goods this instant.

So how can an older company known for producing quality merchandise compete with the upstarts? The answer is by digitally transforming its operations.

Key parts of this transformation involve:

• Automation
• The Internet of Things
• Using AI (artificial intelligence)
• Upgraded equipment
• Enhanced cybersecurity
• An emphasis on “going green

The good news is each of these challenges can be overcome, leading to a company that is leaner, greener and in terms of the competition, meaner. The bad news is doing it requires planning, forethought and a willingness to disrupt the “we’ve always done it this way” mindset.

There are three key components for a successful digital transformation:

1. 1.A change champion to push, prod, cajole, criticize and even complain to keep the project moving on track.
2. 2.A trained consultant, one experienced in performing similar upheavals at other companies in the same or related industries.
3. 3.A suite of products that can be customized to meet your specific needs.

1.Change Champions Drive Innovation

One of the reasons why some businesses fail when attempting to modernize is mindset: leadership is unwilling to abandon the old ways, not only of doing business, but of thinking. A change champion who has the authority to drive modernization is a key player in bringing any company from the 20th Century into the always-changing 21^st.

Often described as “a mono-maniac with a mission,” change champions are the people who ensure new technology gets adopted. They work-hopefully with the support of top management-to drag their company forward.

“A good champion is passionate about their cause or change. They are staunch, zealous, and even fanatic. A great champion is emotional, irrational, irreverent, impatient and unreasonable. They want the change – no matter how big – to happen this week, this month, or certainly by the end of this quarter. To an impassioned change champion, the sky is often falling and the situation is desperately urgent,” Innovation Management states.

Overcoming management inertia is one challenge facing digital transformation in manufacturing. This is critical because AcqNotes looked at several studies and concluded that the failure rate of software projects range between 50 percent – 80 percent.

Causes of failure include:

• Lack of user participation
• Changing requirements
• Unrealistic or unarticulated project goals
• Poor communication among customers, developers, and users
• Poor Project Management
• Stakeholder politics
• Lack of Stakeholder involvement

Some of the worst software acquisition practices include:

• Using schedule compression to justify new technology on a time-critical project
• Expecting to recover more than 10 percent schedule slip without a reduction in delivered functionality
• Putting items out of project control on the critical path
• Planning to achieve more than 10 percent improvement from observed past performance
• Burying as much of the project complexity as possible in the software as opposed to the hardware
• Conducting critical system engineering tasks without software expertise
• Believing that formal reviews alone will provide an accurate picture of the project
• Expecting that the productivity of a formal review is directly proportional to the number of attendees above five

Effective change champions working with top management backing-president, board level and/or owner-can overcome these hurdles.

Change Champions work with consultants experienced in helping manufacturers adopt a digital mindset. Knowledgeable consultants with a good track record for installing well-known, proven enterprise resource planning (ERP) products like Microsoft Dynamics 365 Finance can help change champions in their goal to convince naysayers to the project.

2.Digital Transformation Consultants

Before looking at the role of a consultant, examine one of many definitions for digital transformation.

“Digital Transformation is the profound transformation of business and organizational activities, processes, competencies and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritized way, with present and future shifts in mind,” several websites state.

Digital transformation for manufacturing has several important-and ultimately, profitable-benefits.

They include:

• Greater efficiency through streamlined processes and decisions
• Improved productivity as automation lets skilled workers spend their time and attention on critical, rather than mundane, tasks
• Insights letting executives understand why projects failed and how they can succeed the next time
• Enhanced customer service aimed at a global, 24/7/365 audience
• Finding competitive advantages where they may not have existed before

Once Change Champions help executives understand what a digital transformation is and what it can do, the next key step is hiring a consultant to help them plot a course. A lack of any plan, or even deviating from the plan is a recipe for disaster.

A digital transformation consultant’s role is helping an organization understand how it can achieve its medium and long-term goals, ultimately becoming more profitable by using technology to implement strategic changes. Common steps taken by consultants, such as the technology strategists and road mappers, begins with:

1. 1.Assessing each customer’s current position and its needs.
2. 2.Developing implementation strategies specific for each client company.
3. 3.Convincing management and staff that while change is always hard, their lives will be easier and more productive in the long run.
4. 4.Working with the firm to ensure the implementation meets the company’s goals, offering advice and potential fixes for any roadblocks that appear.
5. 5.After the implementation is complete, they review what happened. What went right? What didn’t go as planned? How can we learn from any failures in this phase to make the next phase smoother?

3.The Software

Whichever software package suggested by consultants that the company accepts, must be:

• An industry leader
• Safe and secure from digital threats
• Easy for employees to use
• Expandable when growth occurs
• Customizable to meet company-specific needs
• Flexible to meet the needs of a changing world economy, one currently suffering major supply chain disruptions
• Able to be implemented in stages that allow the company to keep operating during the installation

Microsoft Dynamics 365 checks all of these boxes. Built on Microsoft’s Azure platform, it offers flexibility by having individual modules such as Sales, Finance and Supply Chain Management that can be installed as needed. More than just easy to use, D365 offers a familiar look and feel with most administrative staffers using Office 365. Security is built-in both through extra layers in the Azure platform and in Microsoft’s cloud architecture. D365 is also easily expandable, letting the software expand as the company grows.

The Bottom Line

Overcoming the challenges of a digital transformation in manufacturing requires having a Change Champion with the power to keep the company on track. It requires trained, experienced consultants that help the company understand what it wants to do and how to achieve its medium and long-term goals. And it requires software that can meet a company’s needs today, tomorrow and in the foreseeable future.

REFERENCE:

How to modernize your manufacturing business