The COVID-19 pandemic has caused deep disruptions throughout manufacturing supply chains, forcing manufacturers and distributors to reevaluate their sourcing and inventory practices as well as the technologies that support them. As the pandemic itself subsides, operations leaders must come to terms with new challenges and opportunities in cost management, labor efficiency, and data management to ensure they meet productivity goals and customer demands moving forward.
Fortunately, “early evidence indicates that many firms were bold and innovative in response to the pandemic,” McKinsey describes in its January 2021 article about manufacturing industry technology. Indeed, new technologies make it easier than ever to collect vast amounts of inventory, labor, and supply chain data. Companies that can leverage this data effectively and in a timely way will lead the industry in 2021 and beyond.
Preparing for the Next Productivity Boom
The Brookings Institution estimates there will be a productivity boost following the pandemic, accompanied by “pressure on surviving firms to cut costs and raise productivity as a result. But too many of these firms continue to rely on outdated information for decision-making and automated processes, hurting their responsiveness to changing market and business demands.”
Similarly, McKinsey predicts some firms will deliver a “productivity dividend” through bold innovation — “but that depends on corporate action broadening and robust demand.” Indeed, manufacturers must leverage real-time data for automated and manual processes, as well as up-to-date information for better business decisions, to enjoy new productivity benefits.
Three Opportunities With New Technology Investments
As companies reconsider their operational strategies, they must reevaluate Industry 4.0 technology investments to address three critical challenges: cost management, data management, and labor efficiency, all of which take on new precedence as companies manage the 2021 landscape of global supply chains. Here, we highlight three opportunities to improve operations and meet these new goals, and select technologies today that will help them meet new business requirements in the future.
1. Controlling Inventory Costs
Minimizing costs is a key component to increased productivity, enabling senior decision-makers to reinvest and ensure greater resiliency in their operations as market unpredictability continues. But minimizing inventory costs, in particular, can be a tremendous challenge, especially as product designs change and customer delivery schedules become more dynamic.
Manufacturers and distributors can increase their real-time visibility into inventory quantity and status through real-time data collection that features streamlined or automated data entry, improving operations, and increasing flexibility and control in inventory management.
For example, real-time shop floor data collection allows warehouses to maximize productivity, collecting data from processes so that manufacturers can drive progress for a wide variety of key metrics. These include improving product quality, greater compliance and traceability, prolonged equipment life spans, faster cycle times, and highly accurate inventory control.
In the warehouse, automatic identification and data capture (AIDC) can add visibility to inventory levels and locations, while reducing costs and risks from over- or under-purchasing. Barcode scanners, mobile computers or even RFID tracking systems make it easy to capture and validate data to backend ERP systems.
2. Leveraging Real-Time Data in All Manufacturing Processes
As IndustryWeek described in a February 2021 article, “One of the key tenets behind Industry 4.0 is having the advanced manufacturing technology to extract real-time information and make accurate decisions in real-time.” Still, most companies struggle with vast amounts of data and the inability to both analyze and act on it properly. This is due in part to their wide range of data sources — typically their own internal processes, as well as external sources — which amount to thousands or even millions of data feeds that can inform all levels of decision making.
Decision-makers need access to real-time data in order to make good decisions, especially as unpredictability continues to reign. Fortunately, real-time data systems make it possible to deliver actionable insights through powerful business intelligence (BI). Emerging technologies can utilize a wide range of real-time data — work-in-process, machine metrics, job/work order status, and others — to deliver greater accuracy, visibility, and control to decision-makers. Because many of these technologies feature individualized interfaces, the tools can deliver actionable insights to users at all levels of the organization as well.
3. Increasing Labor Efficiency
Increasingly, real-time data also contributes to new methods for improving labor efficiency. That’s because manufacturers and distributors can visualize and then consolidate tasks into more simple workflows for their employees. Warehouse task management reduces wait and wasted time, allowing companies to boost productivity without adding labor.
Companies are also able to automate an increasing number of processes using real-time data collection and analytics. Human workers can relinquish certain types of decisions to artificial intelligence, freeing them to focus more on value-added activities rather than tedious processes. From labor allocation to automated reporting, the right software solution enables better decision making while increasing efficiency.
Boosting Productivity through Better Decisions
Real-time data collection, analysis, and execution are at the core of these three productivity initiatives. Manufacturers and distributors that connect data from warehouse and manufacturing operations to back-end systems gain greater visibility into their larger supply chains as well.
Business system integration completes the productivity puzzle. With real-time data collection implemented throughout manufacturing and warehousing environments, the data can be pushed to ERP or other backend system. This ensures that validated information is stored in a single system of record, and is available at any time for accurate reporting.
Preparing for What’s to Come
While no one can predict exactly what lies ahead for manufacturers or distribution centers, making preparations for the future now will set the stage for success in a post-pandemic world. Automated data collection can help ensure your supply chain processes are poised to handle whatever comes next.
Wendy Stanley is Marketing Director for Radley, LLC, a leading developer of productivity software. Since 1974, Radley Corporation helped over 600 customers in 30 countries streamline workflows and automate processes. Radley’s integration services help manufacturers with ERP integration and connectivity to back-end systems.