How manufacturers and distributors can prepare for the upturn by embracing technological innovation
by Kevin Dherman, Chief Innovation Officer at SYSPRO
Sponsored by SYSPRO
If the pandemic has taught business leaders one thing, it is that being agile and embracing digital transformation is no longer a luxury, but a necessity
If the pandemic has taught business leaders one thing, it is that being agile and embracing digital transformation is no longer a luxury, but a necessity. Over the last few months, some manufacturers have remained resilient by pivoting the production line to manufacture essentials needed for the community at large. This has included high-in-demand protection gear, hand sanitizers, masks and ventilators. Other manufacturers have had to shut down completely.
In this time of reflection, it has become apparent that many organizations have yet to embark on their digital transformation journey. Besides the potential costs, one of the main reasons for this is because the process of transforming can be overwhelming. While the C-Suite is keen to evolve by embracing the opportunities presented by Industry 4.0, many attempts at digitalization are stalling before they gain traction because there is a lack of knowledge on where and how to start the transformation process.
Now more than ever, for organizations to remain relevant, and to thrive in the future, movers and makers need to roll up their sleeves and tackle the transformation challenge head-on so they can create real-world impact and take manufacturing and distribution to the next level. Benefits of transforming digitally will be far-reaching. This includes the ability to innovate rapidly, the ability to offer a shorter time to market and a capability to prevent wastage by storing less inventory. Long term results include more efficient supply chains and higher capital efficiency.
The good news is that you can use ERP to support your overall digital strategy. The key is to ensure that it is future-fit; that it has the capacity to act as the heart of your organization; and that it can provide you with the critical information you will need during the transformation process.
Where to start your journey
The best starting point is to gain a clear understanding of your current environment and to ask the fundamental question: ‘What do we want to achieve from digitalization?’ The answer will help to guide your decision-making and define the way forward.
Manufacturers should look at hiring an automation specialist to assess their business and current landscape. This specialist will start by auditing your equipment, technology, processes, and types of interactions with customers, suppliers and employees. This exercise will help identify gaps, bottlenecks, opportunities and missing pieces in your operations. Once you have a good understanding of your current situation you will be in a better position to define a clear strategy and implement a step-by-step plan of action that will support your organization’s transformation journey.
The essentials: your digital toolkit
With a strategy in hand, the next step will be to select the technology to enable your digital journey. This could include connected services, Machine Learning (ML), Artificial Intelligence (AI) or even chatbots. Connectivity is essential to enjoy the benefits derived from digitally transitioning. Without it, applications can’t talk to one another, data can’t be gathered and analyzed, and new streams of revenue can’t be identified.
How Connected Services can help your organization
Your ERP provider should be looking to the future and thinking about how to incorporate the ability to consume connected-service applications, without you needing to write a single line of code. A connected service allows you to subscribe to, and consume, services that have been provided by multiple vendors. They allow you to expand your supply chain outside of your business by integrating different platforms. This proves useful if you want to find new ways to sell obsolete or surplus stock or launch new products in non-traditional markets. These vendors don’t have to be one of your ERP vendors, it can be any supplier, anywhere.
Essentially, connected services help to move organizations from a linear supply chain to a circular supply chain, giving you the ability to connect to the globe, not just to your immediate environment.
How Machine Learning and AI can help your organization
AI should be a first-class citizen of your ERP, not a third-party add-on. ML and AI tools in your ERP system can help identify trends, get predictions and identify anomalies. ML and AI can help the business to create efficiencies, and augment user capabilities.
A true future-fit ERP solution should be for everyone, and your migration to AI should be simple. It should enable people at different levels in the organization to engage with AI and receive various levels of data intelligence without them needing to be data scientists. Unless you understand and can extract value from the data, AI will be meaningless. Traditional report writers and data analysts will need to be upskilled in the art of AI, as this is a new paradigm of thinking. While current reports tell you about the business as it is, AI will tell you what the business should be, in order to be profitable, and productive. Look for an ERP solution that has a tool which brings AI functionality to the user interface for increased user productivity.
AI can help your procurement teams be more efficient. Through more accurate age analysis for example, it can help your CFO and finance department to better predict your organization’s cash flow. AI can also assist with identifying data trends and anomaly detection, which can help you to detect user error; a customer who doesn’t understand which product is best for them; or fraud.
By ensuring that your ML and AI is a pre-existing, first-class citizen, and integral part of your ERP, you save time and money by not having to run two separate systems with work-arounds or add-ons which become security risks.
How digital citizens can bring value to your business
Self-service agents or digital citizens (Bots) are available 24/7 and are always-on, answering questions and servicing requests. They provide your customers with immediate and consistent service as they don’t wake up grumpy in the morning, and they have the same consistent attitude towards work every single day.
Self-service agents/digital citizens should be embedded in your ERP’s machine learning infrastructure and be self-taught and self-learning. It needs to come with a solid understanding of industry specific terms such as bill of goods, vendor, debtor, and service etc and should be engineered to speak in generic business language. Initially however, your digital citizen will be quite immature, not aware of all the specific lingo that your customers might use. As they start to learn the lingo, they will start to provide better service.
By facilitating simple day-to-day tasks, such as disclosing statement balances or status of orders, they can free up your employees to better engage with your customers, strengthen relationships with suppliers, or put their energy toward potential innovative new products and revenue streams.
Finding value in transformation
By gaining a better understanding of what you currently have, and how you are using it, you’ll be in a better position to clarify what you want to achieve from your digital transformation, and whether the value derived will outweigh the cost of implementing it. By investing the time and resources to this initial phase, you should be able to address potential challenges head-on, and ensure the long-term sustainability of your business for years to come.