How Supply Chain Digitisation is transforming the manufacturing landscape

The UK’s manufacturing landscape is undergoing a major transition. Over the last decade it has suffered a decline in employment figures, shrinking by nearly 600,000 jobs[1]. With an ongoing skills gap issue and the unknown impact of the Brexit decision, the industry is in need of major revitalisation.

Signaling new hope, the advent of Industry 4.0 presents big opportunities for UK manufacturers, with innovative technologies promising transformational improvement for the entire . However, to achieve this and reform the existing, silo-based approach, manufacturers need to incorporate every stage of their network from production line to logistics, marketing to product development. This requires collaboration between all business functions, as well integration of the systems upon which each relies.

Let’s take a look at some of the key considerations needed for digitisation.

Internet of Things (IoT)

Manufacturers are predicted to invest $189 billion in IoT technologies in 2018[2], driving a bigger uptake than any other industry. From the connection of machinery and control systems to rapid production; used intelligently, IoTs potential is applicable to every area of manufacturing. To harness it, businesses must implement IoT-enabled supply chains with smart production lines, capable of reacting faster to customer demand. When achieved, smart technologies can greatly streamline and improve processes, ultimately leading to higher-margin.

AI and machine learning 

Artificial intelligence (AI) and machine learning are crucial players within the digitised supply chain, enabling a host of benefits. While the utliisation of IoT may capture enormous volumes of data, this is only useful when translated into insight. AI and machine learning provide manufacturers with the brain power to do this. From a factory floor perspective, it has the power to increase production capacity and lower consumption rates by providing a more intelligent use of resource. It can predict customer demand, and unify internal and external parties to enable effective collaboration.

Understanding the impact

End-to-end supply chain transparency is the number one operational goal for many manufacturers, considered as key to significant efficiency gains. However, only 6%[3] of manufacturers form part of an ecosystem that offers data transparency for all members involved. Along with facilitating greater visibility, digitisation enables the creation of insight that can provide manufacturers with a real-time overview of every link in their supply chain. With this, they can simulate various scenarios, preparing fully for whatever lies ahead.

When it comes to gains, speed and cost are two of the biggest benefits that manufacturers believe they will gain from digitisation. 52%[4] of businesses expect the ability to dramatically reduce time taken to make strategic decisions, while 43%[5] say it will increase operational efficiency. Financial goals include the reduction of operating costs and improving pricing, with 22%[6] of manufacturers believe it will increase sales and effectiveness.

Next steps towards digitisation

While manufacturers may face many hurdles on their way to supply chain digitisation, the benefits are clearly recogniseable. Speed-to-market, increased efficiency, and improving top and bottom line are all achievable, with a sharp strategy that determines best route to digital transformation. Those wanting to successfully digitise must go beyond finding new technologies and building capabilities. They must attract and retain skilled people, manage a culture shift, and transform their entire organisation. Supply chain leaders embracing this will be poised to lead their businesses towards a successful future, helping secure the UK manufacturing industry’s long-term health.

 

Sources:

[1] https://www.theguardian.com/business/2018/jun/04/uk-manufacturing-has-lost-600000-jobs-in-a-decade-says-union

[2] https://www.manufacturingglobal.com/technology/digitisation-manufacturing-industry

[3] https://www.themanufacturer.com/articles/50-manufacturers-expect-benefit-digital-supply-chain/

[4] https://www.themanufacturer.com/articles/50-manufacturers-expect-benefit-digital-supply-chain/

[5] https://www.themanufacturer.com/articles/50-manufacturers-expect-benefit-digital-supply-chain/

[6] https://www.themanufacturer.com/articles/50-manufacturers-expect-benefit-digital-supply-chain/