4IR FOR THE SME MANUFACTURER

4IR FOR THE SMEMANUFACTURER: HOW TO REMAIN COMPETITIVEIN THE FOURTH INDUSTRIALREVOLUTION

4IR FOR THE SME MANUFACTURER FLUIDITCONSULTING.CO.UK

WHY READ THIS?

THE TIME TO EMBRACE DIGITAL IS NOW

The purpose of this article is to help SME manufacturers navigate the jargon and noise surrounding the ‘fourth industrial revolution’ (or 4IR) and translate it into pragmatic, affordable IT solutions that can help them develop a competitive advantage. Our goal is to demystify this topic to show SME manufacturers how to leverage 4IR to achieve radical improvements in efficiency, quality, throughput and lead times, and how to create an environment where IT is enabling them to achieve their business goals, rather than impeding them. Much of the conversation around IT in manufacturing can appear to exclude SME businesses. The fourth industrial revolution and the advancements that have come with it such as AI, machine learning and augmented reality may seem beyond the realms of possibility for smaller manufacturers who are still reliant on paper-based inputs and spreadsheets. Our aim is to introduce these businesses to elements of 4IR that they can feasibly implement and that add significant value.

Increasing consumer demand for inexpensive, quality products that are produced at speed, coupled with globalisation, are putting more pressure on British SME manufacturers than ever before.

To remain competitive in this challenging climate, manufacturers are turning to technology to increase their productivity, reduce waste and make better decisions. 4IR, defined as the increasing integration of physical production and digital technologies, is a movement within the manufacturing industry that is causing a rift between those manufacturers who are harnessing IT, and those who aren’t.

FluidIT Consulting recommend three areas that SME manufacturers should focus on to reap effective benefits that will allow them to stay competitive as we enter the fourth industrial revolution:

• Strategic IT Leadership: Pay-As-You- Go IT Directorship

• Process Automation – Intelligent Business Process Management Suites (iBPMS) Tools

• Business Intelligence and Data Analytics

1.

STRATEGIC IT LEADERSHIP

Pay-As-You-Go IT Directorship

Without proper IT directorship, the business failson two fronts.

With increasing pressure to remain competitive from growing consumer demand and globalisation, manufacturers must continually improve their productivity to survive. As we enter the fourth industrial revolution, a key differentiator between competitors is their strategic use of IT to improve performance. It is easy for manufacturers who are not keeping abreast of technological advancements within their industry (and the business benefits they can produce) to suddenly find themselves left behind.

As the McKinsey Global Institute put it:

“The race to keep up with technology and put it to the most effective business use is producing digital “haves” and “have-mores”—and the large, persistent gap between them is becoming a decisive factor in competition across the economy.”

Unfortunately, many SME manufacturers still see IT as an undesirable cost to the business, rather than an investment which drives customer value and business profits; something which is incidental and unavoidable in delivering the end product, rather than an integral, inextricable part of it. This view of IT will prove to become increasingly detrimental as more and more SMEs wake up to the importance of IT to their overall business goals.

Those that do attempt to implement IT solutions are likely to do so without yielding the full business benefit from their chosen technology – either due to choosing a solution not best suited to needs, inadequate implementation or a lack of understanding of the true capability of their chosen solution.

This can be for several reasons. The lack of IT experience within the organisation may mean the typical pitfalls that often occur within an IT project were not avoided. The business may fail to properly utilise and embed the new technologies to their full potential. They could be reliant on a third-party IT supplier who can get away with a mediocre performance because the business lacks the in-house IT experience to challenge their approach.

As SME manufacturers may not need or lack the capacity to have a full time IT director, IT directorship as a service allows businesses with an interim or part time need for IT leadership to satisfy their skills shortage on a pay-as-you-go basis.

Having an objective expert gain an intimate understanding of your business and its needs can ensure your organisation takes advantage of pragmatic, affordable IT solutions which drive strategic competitive advantages, and that any IT project is managed in such a way that minimises the risks of failure, and maximises the speed of benefits delivery.

IT IS TREATED IN SILO TO THE BUSINESS

WHEN IT PROJECTS ARE INITIATED, THEY OFTEN FAIL

2.


PROCESS AUTOMATION – IBPMSThe purpose of having standard processes and operating procedures is to reduce variation and increase efficiency throughout the manufacturing process. However, SME manufacturers often struggle to achieve these goals as some processes may be overly manual, reliant on inputs into multiple systems or lack true measurability.

iBPMS such as Bizagi and Novacura Flow allow SME manufacturers to quickly create cost-effective, custom applications that automate their processes without investing in any additional IT infrastructure. Applications are designed as work flows which illustrate the manufacturer’s ideal process or standard operating procedure. The flow is then developed into an application with a clean and easy to use interface that can be implemented at every stage of the process, on any device, therefore enabling digitisation of the shop floor and data capture.

The application can be created entirely within the iBPMS, or if stages of the process are dependent on several existing systems (such as an ERP) the iBPMS acts as a ‘layer’ over existing systems. The specifically required parts of each system can be integrated into the flow as part of the application, eliminating the need for the user to log into various systems or record information manually, and instead allow them to work with one simple interface.

The implementation of iBPMS can have profound implications for an SME manufacturer. Manual administrative processes can be eliminated within a matter of days. Underlying systems are no longer limiting factors to processes or procedures and do not need to be customised at significant cost to the business.

3.

As the applications are fully mobile, tablets can be added to the shop floor so that every stage of the manufacturing process can be recorded (for instance the employee can simply press a button when they begin and end their part in the process, or scan a QR / barcode to indicate their step is complete) giving new insight into previously hard-to-measure performance metrics of the process.

USER

iBPMS ACCESSIBLE ONANY DEVICE

ENTERPRISERESOURCEPLANNING

DATABASE

EXISTING BUSINESS SYSTEMS

SPREADSHEETS


ERP

WE RECOMMEND THAT ANY BI INITIATIVE SHOULD ADHERE TO THEFOLLOWING APPROACH:

BUSINESS INTELLIGENCE (BI)Business Intelligence (BI) is the technology driven process of analysing data and presenting actionable insights to senior leadership teams so that they can make better strategic decisions. In an industry where it is especially imperative to improve operational efficiency, it is surprising that so many SME manufacturers still struggle to accurately measure even the most fundamental of KPIs. Not only does this mean a view of current performance is skewed (potentially significantly so), but the ability to innovate is hampered as changes to processes cannot be accurately measured or learned from. There are several reasons for this. Firstly, the data to measure these metrics is not recorded in the first place, or it is recorded manually (e.g. via paper forms or disparate excel or word documents), or inconsistently (for instance a faulty part may be recorded by one employee as ‘broken’ while another may label it as ‘damaged’). Frequently, valuable data is recorded in several disparate systems in various formats and compiling and presenting this data in an actionable, insightful format is impossible, incredibly labour intensive, or beyond the IT capability of the manufacturer.

In some cases, the ERP system may contain all the data the manufacturer needs, but the reporting ability of these systems is often rudimentary and do not facilitate fundamental reporting needs, such as historical comparisons or trend analysis, drill down and meaningful visualisations. Furthermore, running reports from a live ERP system can cause performance issues for other users who are logged in.

Fortunately, with the help of BI experts, BI initiatives based on cloud solutions can be implemented in relatively short time frames and easily integrated with existing systems, without the need to invest in additional hardware.

4.


FluidIT Consulting are committed to helping SMEs in the industrial sectorsimprove their performance through cost effective IT solutions. For further information on how we can help you and complementary advice. CLICK HERE.

Any BI initiative requires senior leadership sponsorship.

START WITHTHE BUSINESS

What are the KPIs that matter most to your business and to

what granularity must these KPIs be understood?

UNDERSTANDWHAT IT IS YOU

WANT TOMEASURE

Processes must be put in place to record this data digitally and consistently to avoid variation.

RECORD THEDATA NEEDED

TO INFORM THESEKPIS DIGITALLY &

CONSISTENTLY

All valuable data must collected, made consistent and loaded

in a central repository (such as Microsoft’s Azure).

EXTRACT,TRANSFORM

AND LOADDATA

Fixed, periodical reports through tools such as SSRS and dynamic

self-service BI through tools such as Microsoft’s Power BI, Tableau

or Qlikview.

BI TOOLS ANDDASHBOARDS TO

INTERROGATE THE DATA

http://www.fluiditconsulting.co.uk/contact/

+44 (0)113 360 [email protected]

FluidIT Consulting LtdDigital Hub, No. 1 Leeds,26 Whitehall Road,Leeds LS12 1BE

www.fluiditconsulting.co.uk

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4IR FOR THE SME MANUFACTURER