At the beginning of 2021, CIO.co.uk outlined what they believed would be this year’s top eight challenges for IT leaders:
Facilitating the future of work
Securing the hybrid enterprise
Flipping the 80/20 IT landscape
Skilling up for accelerated digital roadmaps
Scrutinising IT budgets
Maintaining 24/7 uptime
Blending safety and innovation
Well, okay, I get all these. But is this as good as it gets? Couldn’t we aim a bit higher?
For example, we shouldn’t be ‘facilitating the future of work,’ we should be driving it! As for 24/7 uptime, surely we’ve all got that in place already? Particularly now, when technology has enabled businesses to carry on despite the pandemic?
I think we can easily come up with a more inspirational and impactful list—especially when we’re looking for talking points to bring to the CEO.
In this accelerated moment, CEO attentions are more than usually divided. But part of your job as a CIO is to make a case to the CEO for how technology makes a difference to competitive advantage. Technology can and should be the key to more rapid growth, to outstripping the competition, and to becoming more profitable.
And yet the above list would have us focus on infrastructure. If we were in a car, it’s as if the next five sets of traffic lights have all turned green, and yet we’re driving along in second gear: admiring the scenery when we should be hitting the gas.
So, what do I think we should be doing now? We need to focus on getting the CEO excited about their IT. And we need to demonstrate, as CIOs, that we’re commercially astute businesspeople and not propeller heads. We need to show that we’re thinking about how to help the company grow faster and make more money.
So, what about this list instead:
1. Omnichannel everywhere. Everyone engages with the business however they wish, whether they’re suppliers, customers, or employees.
2. Bring the customers closer. Digitisation of everything—now!
3. Integrate and automate to speed up the business; RPA, APIs and Middleware to deliver a connected business.
4. Real BI/MI to make delivering data the lifeblood of the business and enable fantastic decision-making.
5. Give the business what it wants. Departments should want to come to you first.
6. Support innovation. Create sandboxes where employees can safely innovate.
7. Programmes and projects delivered on time, within budget, and to specification. Always.
8. Right person in the right seat on the right bus. Wrong people off the bus.
Consider this list less about challenges than priorities. After all, if there is anything that past eighteen months has taught us, it’s that challenges have a way of finding you whether you plan for them or not.
Are you on your “A” game? Keeping yourself up to date has never been more vital…
FACT: The CIO/CTO position is the only Board position where the necessary knowledge and skills need constant updating. Just like Moore’s Law has seen the exponential increase in computing power, so has the IT expert’s need to stay abreast of technology. It can be a nightmare. CEOs want their teams to be on their ‘A’ Game, and for us that means constantly updating our knowledge and our ability to handle new tech.
And the stakes are high. IT increasingly underpins all strategic business objectives—no department can deliver them without IT. It’s our team that increasingly underwrites the strategic objectives and enables the CEO to deliver them and to provide shareholder value. So we absolutely must understand the latest technology and being able to discuss options, ideas, and principles with department heads.
We don’t have to know everything. I’m not talking about in-depth ‘build-a-layered-network’ type of knowledge. I mean having enough technical knowledge to be able to innovate, to make informed strategic decisions, to keep the business ahead of the competition, and to know what the technicians are talking about.
This means that a fundamental part of knowledge acquisition is deciding what to learn, how to learn and when to learn. So, how do you choose?
We use a simple diagram:
The idea then is to figure out where each bit of technology falls on the continuum. Here is what I suggest:
1. Think about your current situation and the needs. You might even make a list:
· What do you need?
· What does the company need?
· What does your team need?
2. Once you have the needs in front of you, prioritise:
Where is the most urgent need for knowledge? Concentrate on that area, but don’t ignore the others—make sure they have an appropriate place in the order.
3. Work out how best to gain this knowledge. There are a number of ways to learn:
· The traditional route. Websites, books, magazine articles, etc. Many CIOs we know set up Google Alerts on topics they want to stay on top of. This method is useful for finding new knowledge or innovative ideas.
· The on-the-go route. Podcasts, TED sessions, audiobooks and the like—sources that you can learn from when you’re driving or exercising. This method works well for topic assessment or getting under the skin of a specific technology.
· The planned attendance route. These are occasions when you’ve signed up to a training session, a conference, or a webinar, because the topic is interesting and useful, but it’s not an immediate priority. It’s also useful for ‘large topic’ learning.
· Just-in-time. This is when you’re just a few pages ahead of those you’re working with. This sort of knowledge can be gained from peers, colleagues, or even the technical teams. You just need to know how to ask the right questions. This is not a substitute for the other routes; it has to be ‘as-well-as,’ not ‘instead-of.’
· ‘Find an expert who knows.’ Look within your network for someone with an in-depth knowledge of the subject. Buy them a coffee or lunch and find out the salient points. Also: ask the expert how he or she acquires their knowledge; they may know a website or seminar you haven’t heard of.
Remember that for the most part this is not about monolithic knowledge. It’s about distinguishing which pieces of knowledge will be useful to you and the business. Prince2, for example, is all very well. But if you try and implement the whole thing you lose credibility. Instead, implement a few useful parts as the basis of sensible project management. The key to knowledge acquisition is knowing which bits to leave on the cutting room floor.
CIOs and CTOs have a complex job, and their knowledge base reflects that. It’s not just the functional IT knowledge they need to keep improving, there’s all the IT leadership knowledge as well. Not to mention the business and commercial skills, like forecasting and budgets. Whilst these other areas of knowledge don’t change at half the speed functional IT does, they do move on. So you need to constantly review the diagram above, adjusting your learning objectives accordingly.
A successful CIO or CTO will be the one who invests time and energy in judiciously updating their knowledge and skills. If it’s not yet a priority for you, it damn well should be! The fundamental point is don’t let it become something that you look back on and realise you should have done more of. Regret can be a painful thing to have in a career.
The Future of Digital Transformation
Let’s start with a definition. For us, digital transformation means using IT and technology to dramatically change your business for the better.
That may mean a custom or bespoke software product. Or it may mean integrating your systems on the back end, or a complete overhaul of your IT systems and suppliers. Whatever the tech issues, it means focusing on your customers, your market, and your risks. Every choice is to ensure that the internal operation of your company is not limiting its growth.
Another important point is that the transformation is individual to your company. There is no one-size-fits-all solution, and anyone telling you so is after your wallet.
That doesn’t mean we won’t see big changes in the next few years. Again and again we’ve watched as what used to seem like extraordinary technologies—such as voice recognition, complex mapping and routing, and software robots—quietly become a part of the everyday life of a mid-market company.
Similarly, though the excitement about drone deliveries and artificial intelligence seems to have faded, we still think they’re coming. Whenever I see such innovations being tested, I think they’re important guides to what will gradually come to our sector, the mid-market.
How the Pandemic Transformed Digital Transformation
Before we get into what’s coming, it’s useful to look back. The pandemic changed digital transformation in two fundamental ways.
First, everything went online, and faster than we had thought possible. Everyone now expects online sales, service, and support. Business and domestic consumers rapidly adopted online channels for finding and buying a wide range of products and services. This also extended to after-sales and re-ordering, which are online now in a way that seemed unlikely in 2019.
Similarly, paper is on its way out. Cash has been side-lined by electronic payment. Printed brochures and catalogues have disappeared from many sectors. (In fact, if your business is still reliant on paper, that would be the place to start a digital transformation of your company. More ideas here.).
Second, we saw a rapid shift to remote work. Not that it was a simple process: we saw business struggle when their systems and processes were badly integrated and ill-defined. But everyone, whether they liked it or not, quickly got used to collaborating online.
In every situation above, old-fashioned managers were saying, “It will never work.” Which leads me to conclude that often digital transformation is driven by attitude rather than what is technically possible. And attitudes have changed irreversibly.
What’s Coming to the Mid-Market
In the near future, for many mid-market businesses the next phase of digital transformation will focus on the following:
Data, data, data. It’s never been easier to accumulate data. Companies will leverage these new assets for smarter use by humans and AI. Combining data from different sources is now far easier, and cloud-based processing allows for rapid insights that would have been unthinkable even quite recently. The businesses that adopt data visualisation technologies, simple machine learning, and process automation will have a competitive advantage.
External integration. Internal integration and adoption of the cloud should be in the rear-view mirror. (If that doesn’t describe your situation, that’s the first step to transforming your company.) Businesses should only select tech products that support integration and should gravitate towards suppliers, customers, and partners who form integrated communities. Because integrated communities will out-perform those that are not.
Points of difference. As cutting-edge technology becomes more widely available, companies will have to work harder to distinguish themselves by their actual product or service. Their brand really must mean something, and they really do need a competitive edge. For example, now any company can stream movies like Netflix; Disney+ has surged ahead on the strength of its content.
Environmental, social, and governance concerns. Both regulators and consumers will insist upon more transparency when it comes to data use and environmental sustainability. Traceability of products, optimisation of materials and energy consumption, privacy, security, and justifiable decision-making will all become part of the digital transformation agenda.
Virtual currency. Products and services will be increasingly virtual and paid for with virtual currency. It remains to be seen which form of digital currency will prevail. But mid-market companies need to tune into this accelerating change and invest in new types of virtual storefronts and virtual branding. Though I hate to use the term, this is the metaverse.
What Hasn’t Changed—and Likely Never Will?
Most mid-market businesses are deeply concerned about supply chain issues, recruitment, and energy costs. New technologies—and the judicious application of existing solutions—can ease all these issues, but only if you successfully meet human needs at the same time.
Zoom and shared docs are no substitute for real face-to-face collaboration. You cannot have a real creative discussion, shift entrenched opinions, or lift someone’s spirits online. Digital transformation can drive everyday productivity. But for most people, an enjoyable job also means human contact.
Most people also want their company to have a vision beyond profit. They want to draw more from their work than just their salary. Digital transformation can absolutely make a difference in a mid-market business—but only when you include the human factor.
No matter what your sector or the size of your business, a digital transformation won’t take unless your staff feel included and valued.
With all that in mind, now it’s time to think about your company. If you redo your IT and technology with a magic wand, how would you do things differently? What barriers to growth would you remove?
For more guidance on digital transformation, see our free, plain-English guides here. And for a no-strings, no-pressure conversation about the digital transformation opportunities within your own business, get in touch.
The Future of Manufacturing Part 3: Getting Data Right
In previous installments of this series, we discussed the key trends in the future of manufacturing and provided a checklist for new ERP and MRP projects. Now we need to talk about a critical commercial issue for any manufacturing business: getting the data right.
We meet many manufacturing CEOs who are frustrated that, despite spending huge sums on new systems, they lack visibility of the true cost of production, have higher than expected waste, and have no clear view of inventory.
New systems like IFS, Nav, AX or Dynamics 365, SAP, Sage, Epicor, Oracle or Syspro can cost big money. But if the project fails to deliver, often the root cause is that the master data is wrong. The system may be fine (though often it isn’t!), but if the data is wrong then everything is built on sand.
Poor master data confuses everything, embedding waste, errors and poor service throughout the organization. For example, product costings, bills of material, recipes, or routings, may have not been set up correctly in the first place or may have become out of date.
We’ve frequently seen examples of businesses where the same customers, finished goods (FGs) or raw materials (RMs) are entered multiple times, but called different things, creating all kinds of confusion. The bigger and more widely distributed the company, the more possible this can happen.
These issues usually result in reports that are wrong or time-consuming to fix. Staff costs increase, especially for the finance team, who may have to clear up the mess in Excel.
Procurement may over-order to create safety stocks, tying up cash; sales can’t accurately forecast delivery dates. Eager salespeople may “borrow” items from different orders to fulfill today’s priority, creating more problems down the line. Inventory turn is lower than planned and OTIF targets get missed.
Customers are disappointed by long lead-times or upset by incorrect, incomplete, or late delivery. Labels or documents may be wrong, which is inconvenient at best and, at worst, can have legal or safety implications.
On the other hand, well-structured manufacturing data provides insights to senior managers, allowing them to answer important questions:
Who are our most profitable customers?
What are our least profitable products?
Which processes require the most rework?
Well-structured data also allows for accurate real-time data, empowering supervisors to organize work within defined boundaries.
Fundamentally, poor data can make it hard to take advantage of efficiencies of scale. You can roll out new systems, but the problems will remain. And a growing business becomes less profitable rather than more profitable.
So then, how does a mid-market manufacturing business get data right?
If you’d like to talk about your manufacturing challenges, Get in touch
1. Instill strong leadership and ownership.
Data is difficult and detailed. And let’s be honest: it’s not very interesting. Solution vendors are contracted to deliver technology, so they don’t really care about the data.
Everyone’s too busy doing their day job, so it may get left to the Finance or IT teams to work out data problems, and they may not have the knowledge to fix issues or the authority to get people to change bad habits.
But data has strategic implications, so an executive must take ownership. And whoever takes charge of the data needs to have time to get to the bottom of the issues, experience in this kind of work, and authority to make decisions and get things done.
Production and business teams will have to be involved as well, taking responsibility to help get the data right and keep it that way. And since data quality is an ongoing exercise, the senior team must receive reports at regular meetings.
2. Identify the problems and their solutions.
It may seem obvious, but it’s often overlooked: data quality issues will keep reoccurring, even snowballing if you don’t find the root causes and create solutions.
One place to start is to look for who is supposed to be in charge of data quality – if anyone. Data problems often reflect process problems or a lack of alignment between people and departments.
It may not be clear internally who is responsible for what, for updating data as things change, or for correcting data when errors are found.
Perhaps data quality falls to some very overstretched, helpful people who may be vital but have a very low profile. Or there may be no-one who has the time to manage data quality.
Using multiple systems without proper integration is another common cause of poor data quality. Sales, finance and production teams’ reports simply won’t agree if they are working from different base information. Fixing the problem may require process changes, technology changes and some retraining (or even “redeployment” if the real issue is particular people!).
There may be good reasons for using multiple systems: for example, specialist warehouse management solutions that work with advanced technology such as voice- or sight-picking, which isn’t supported by a basic ERP platform.
But with separate systems, there must be clarity as to which system owns what data (e.g. ERP owns stock quantities, WHM owns stock location) and the interfaces need to be tested and working.
3. Make rational decisions about when to solve problems.
Data issues often arise because time and commercial pressures make shortcuts necessary. Getting data right may be a matter of diminishing returns, as obscure problems can be very difficult and time-consuming to fix, and they may just not be worth it!
The most important thing is to make rational decisions about your data. List the data problems, estimate the necessary effort for solving each of them, and the business impact.
If short-term pressures mean that a problem won’t be fixed now, then perhaps it’s on the list for next month. In the meantime, monitor its impact. It may make sense to tolerate a problem for now. It will never make sense to sweep it under the rug.
Even poor systems can work effectively if the data is structured, maintained, and policed. Most importantly, this is a good platform for system improvements: maintaining data quality can eliminate a whole range of problems and inefficiencies, can boost profitability, and can give everyone new energy as less time is wasted on distractions and snags.
The Future of Manufacturing Part 2: C-Suite Checklist for Successful MRP/ERP Projects
Our previous installment on the future of manufacturing discussed the main trends and their effects on mid-market businesses.
In this installment, we discuss something of direct importance to mid-market manufacturers: Material Requirements Planning systems (MRPs), which help manage manufacturing processes, and Enterprise Resource Planning systems (ERPs), which integrate your main businesses processes.
More specifically, how to ensure you get them right.
A manufacturing company’s internal efficiency and effectiveness are highly reliant on sound MRP or ERP systems. But all too often we meet CEOs whose systems just tie them in knots, add cost, and hamper customer service. These systems become a brake on expansion and growth.
Large systems projects are expensive exercises. And yet the results are often disappointing and rarely meet their business objectives. And then you are stuck with them: MRP or ERP systems generally have a lifetime of seven years or more. Get it wrong, and you can repent at leisure!
How can you avoid this?
This checklist provides some key pointers. It can be a useful review even if you’re halfway through, or a primer if you’re about to start.
If you’d like to talk about your manufacturing challenges, Get in touch
1. Get the business objectives clear.
Has there been an open workshop in the boardroom to agree on the basic business objectives? The objective isn’t to implement a new MRP or ERP, it’s to deliver specific business outcomes…what are they? Has everyone agreed on them?
Be specific. For example, an objective may be to halve the manufacturing cycle/throughput time; to remove four FTEs by avoiding any rekeying between the ERP and website; or to eliminate errors in labeling by automating label production.
2. Be clear about the key requirements.
In everyday business language, document the key things the systems must do, or must enable, or must achieve. This might be a list of forty or fifty statements, such as, Telesales handling staff can see accurate stock info and pricing on any products within thirty seconds.
Often the emphasis is on how you go about things today, but the focus should be on outcomes, as there may be better ways to get there. And all department heads need to be involved, to agree, and to sign off – yes, put ink on the paper!
3. Get specific about who is involved and who is accountable.
First, pick the right people to own the project. Are there experts on the business who will need to be assigned to the project team? Will their positions need to be filled?
And don’t assume that every technologyie in your business understands MRP or ERP projects. Increasingly the line is blurred between shop-floor technology, automation, and information technology. The Ops team (who might have owned this project a decade ago) may no longer have the right skills or experience.
Second, everyone must be clear on their roles in the project. Are you aiming to involve some of your own people in the details so they can become expert superusers of your new system? Who in the C-suite is accountable for delivery? This should include not only delivery of the technology, but all the business outcomes identified at the start.
4. Get clear on the cost-benefit model.
Although you don’t know the detailed costs yet, you can establish the cost-benefit model. This means understanding how this project will deliver hard benefits, so that when compromises are necessary, you can identify what’s worth keeping and what you can drop. The cost-benefit should be based on improvements in Key Performance Indicators (KPIs)—for example, identify the target on-time, in-full (OTIF) and compare to current measurements of the same KPIs.
5. Select your products rationally.
There are hundreds of systems available: IFS, Nav, AX, SAP, SAGE, Epicor, Oracle, Syspro to name a few! This can be a minefield—but not if you’re clear-headed about it. Once you have all your requirements, use them to create selection criteria, a scoring system, and clear questions to ask.
You need to weigh up the advantages of integrated ERP with multiple specialized systems, which may offer better features but greater complexity.
For example, it can make sense to select a standard ERP and a specialist warehousing product for better goods handling (picking, putaways etc.), or a dedicated Manufacturing Execution System to collect detailed process efficiency data. Make sure all the business stakeholders are part of the decision-making, so they have a vested interest in success.
6. Select your partners rationally.
A partner will configure, customize, and support your systems. As you will need to have a long-term relationship, it is critical that there is trust and a good cultural fit. Get references, and check everything! Ask around: are they experts in your sector? Are they financially secure? Have they got a stable team?
And start early, so that you have time to negotiate a good price and contract rather than having to cave in due to pressing deadlines.
7. Insist that your partners have a plan.
The vendor or implementation partner must provide a credible plan, and you must extend it to your own plans for things like communication, data setup, and retraining. Most importantly, the plan needs to show all activities to deliver the business objectives, not just delivery of the technology; and the plan should include all the resources and commitments, not just the supplier.
8. Define target business processes.
Working with the implementation partner, you need to design your target processes.
Many MRP and ERP projects fail because companies try to configure new software to match the way they always have worked, as opposed to designing the most efficient processes.
This often leads to expensive custom programming; and, if the implementation partner is charging for this, then their salespeople will be delighted to help you make bad decisions!
9. Identify process and organizational changes.
With new systems come new ways of working. And change can be hard for some. You need to plan, document, and carefully roll out these changes, and communicate frequently with everyone involved. This may be the most difficult part of the entire project, especially if some of your teams are remote and not often in the office. It will not happen by accident; without proper management, many people will go to great lengths to avoid changing how they do their jobs!
10. Take the opportunity to clean up your data.
Start cleaning your data today. Because getting the data right can be make-or-break for a new system, and this task can be the biggest and most critical part of the project. After all one of the key benefits of an ERP or MRP is how the information helps decision-making; if you take away that with poor and inaccurate data, you’re taking away the whole point.
Think about product codes and bills of material and how they can best be structured to deliver the information the business needs. Seriously, start now. Don’t wait until go-live. In our experience, those who wait end up bringing inaccurate and unclean data across to the new system!
11. Manage device integration.
Devices are going to be integrated with these news systems, so get started on identifying them and testing as soon as possible. For example, shop-floor data collection devices like scales, environmental sensors, barcode scanners, or RFID trackers are increasingly key sources of efficiency, so they can’t be an afterthought.
Remember to test for more than just if the new software works. Are the devices suitable for the environment? Consider temperature, humidity, vibration, etc. Whenever you can, involve the device suppliers.
12. Run a testing and conference-room pilot.
By making the vendor run their product through your business processes, you can check that the system and business practices will fit and that the key staff are ready for change. A pilot is more than a last chance to stop problems. It’s a great way to get superusers onto the system; it may also be an opportunity to identify additional benefits.
13. Manage the implementation / cutover / go-live.
A “big bang” go-live can be complicated and risky; different parts of the new system may be ready at different times; and different phases will deliver different benefits. So there will normally be a progressive adoption of the new system(s) and decommissioning of the old ones. This needs to be thought through and carefully managed.
14. Train and monitor staff.
Staff will need training and coaching in how to work with new systems and processes. There may be a period of de-snagging and minor changes. This needs careful monitoring and policing to ensure that employees have clear ways of working and do not adopt bad habits. You should be prepared for some pushback: for many, change is daunting and can cause stress and resentment. And when they don’t yet fully understand the new way of working, some may blame the system for mistakes or slower processes.
15. Get specific about who has ownership moving forward.
The project owners need to ensure the original business objectives and cost benefits materialize. But this is also the moment when the new system becomes “legacy,” so it’s critical that ongoing ownership is clear.
Ongoing monitoring must be part of the routine, and new issues must be addressed quickly and without a fuss. Whose job is that?
In addition, you will need an annual budget for vendor support, for training of new staff, for fixes, and for amendments so the system stays aligned as working practices and products change (as they inevitably will).
Lay the foundation for your future
All too often we see a lack of focus on the key points of this checklist. As a result, projects become bogged down, with overruns of both cost and timescales. Eventually, in the race to finish, the original vision is forgotten, there is no more time or money, and the aim becomes to “just get it done”!
But if you follow the checklist, you greatly increase the risk of success, and along with it, the transformational benefits of a new ERP or MRP system. Many of our clients have achieved significant uplift in efficiency and service and find new confidence to grow because their business starts to feel like a platform for scaling up!
When system issues are no longer on the agenda, the executive team has more time to talk about strategy and growth. And effective systems provide data and reports to feed those conversations.
The Future of Manufacturing Part 1: The Six Key Trends of Manufacturing 4.0
The IT industry often deliberately spreads “fear, uncertainty and doubt” in the marketplace. They create confusion about the future, and then, of course, sell you the perfect solution. So is the so-called “Fourth Industrial Revolution” and “Manufacturing 4.0” part of the usual befuddlement bandwagon?
What is really happening? What are the technologies that will form this change? And what difference do they really make? Read the 6 key trends, but for a top line perspective watch the short video below.
Shop Floor technology Is Increasingly Information technology
First, a little context. Historically, there was a clear distinction: your operations teams owned shop-floor technology, and the IT team owned IT. But this gap is rapidly closing. For many companies, the challenge now is to have the right leadership to effectively lead these cross-border initiatives and to deliver value.
The winners will be those companies who are smart enough to use technology and data to meet customer needs more effectively and to innovate ahead of the competition. This is as much about leadership as it is about technology.
We believe there are six key trends to this generation of technology:
Big data, AI and machine learning
Here’s what they each mean.
1. How Will IoT/5G Make a Difference to Manufacturing?
Just to be clear, “IoT” means the “Internet of Things,” or using connectivity to control machinery and harvest data. “5G” is the fifth generation of technology for cellular networks.
When it comes to manufacturing, IoT and 5G are about incorporating sensors and controllers on the shop floor to make the production activity more visible and controllable in real-time. This requires new systems as well.
Most importantly, it requires skilled personnel to deliver the benefits, which include minimizing costs and maximizing output with more accurate ordering, production, and stock management.
One of the best aspects of IoT and 5G for manufacturers is how it improves reporting. Rather than basing decisions on reports that were manually created a week or a month ago, information flows into your ERP or MRP systems to provide accurate, up-to-the-minute information, with minimal manual intervention.
Ultimately, IoT lowers costs, increases profits, and delivers better quality and service to customers.
Continue reading the key trends below the video.
If you’d like to talk about your manufacturing challenges, Get in touch
2. How Will Manufacturing 4.0 Improve Internal and External Collaboration?
When you hear “Manufacturing 4.0” or “Industry 4.0” it generally means increasingly autonomous systems and information in real-time.
More specifically, Manufacturing Execution Systems (MES) allow the capture of more data about detailed process activities and individual operations on individual items. MES can make use of barcode or QR-code scanning, or automated collection of RFID information, or similar smart-monitoring.
As more real-time information is available, and office IT like Microsoft Teams becomes mainstream, your management, supervisors, and even skilled operators no longer need to be on the shop floor to manage production. Managers and supervisors can see precisely what is happening, managing production in real-time, or detecting issues as they happen. They can also look backwards to understand costs, cycle-times and quality. Managers can assess effectiveness of processes, teams, production batches, and even individual machines or staff.
E-commerce has reset customer expectations across all industries. Your customers will increasingly expect to be able to see and assess the progress of their own orders through your factory
This technology has external implications as well. Fortunately, with Manufacturing 4.0, integration of your production activities with your customers, suppliers and partners becomes possible at a far more detailed level.
3. The Impact of Big Data, Artificial Intelligence and Machine Learning in Manufacturing
Of course, large volumes of data create new challenges as well as opportunities. Manufacturers need new tools to understand data patterns. technologies such as Tableau and Snowflake make vast number-crunching and visualization easy, and once the data is digestible, it’s a small step to introduce automation for some aspects of decision-making.
It doesn’t have to be rocket science. It can be a structure of simple rules, such as alerting the customer to reorder ahead of time. Or it can be sophisticated Machine Learning and Artificial Intelligence.
The combination of data, AI, and machine learning is already proving to be extremely powerful. But it doesn’t mean that people no longer matter. The issue is often one of skilled leadership. Manufacturers need technology-savvy leaders to set the vision and to create a culture of data-driven, analytical decision-making. With the right technology leadership it becomes much easier—and more profitable—to exploit all this new technology.
4. The New Generation of Robots and Cobots
In the past, due to their high cost and the production volumes necessary to justify the expense, industrial robots were often only used by large manufacturers.
But now we have a new generation of collaborative robots, or cobots, which automate tactical elements of production activity. Their simplicity and flexibility mean that they are easier to deploy and can quickly deliver value, which makes them far more appropriate to the mid-market.
Again, implementing this fantastic technology creates a leadership challenge. Cobots are often configured and programmed by skilled production operators working in tandem with IT staff. Again, you’ll need a skilled IT leader who can facilitate this collaboration.
5. Servitization Creates Greater Value
“Servitization” simply means the shift from selling products to selling services. We live in an era where companies want to buy everything “as a service”: manufacturers can increasingly look to a future where they charge customers for using their products rather than buying them. Whether it’s car tires, aircraft engines, or workwear, manufacturers are charging recurring revenues or licenses to their customers for the use of the products, often with support and replacement bundled in.
Servitization will increasingly work in tandem with other aspects of Manufacturing 4.0. Perhaps the greatest opportunities are in monitoring and communicating with your products while in use. This enables new models for preventative maintenance, guaranteed service and support.
We will also see entirely new opportunities for value-added services, along with greater opportunities for upselling and better customer lock-in. The bottom line is that reliable, recurring revenues are more valuable than one-off sales. Manufacturers who make this change will become increasingly dominant.
6. The 3D Printing Revolution Continues
3D printing will have a revolutionary effect on many aspects of manufacturing. Rapid prototyping and iteration are already becoming the norm, but the real revolutions will be in mass customization where customer expectations will undergo a major change. Customers will expect endless product versions and variations.
For manufacturers, the benefits are also enormous: 3D printing now allows for a wider range of materials, and data can be included directly onto the product. For example, QR codes or human-readable product IDs can be printed as part of the production process, with obvious benefits for process monitoring and stock management.
And 3D printing will massively reduce the need for stock holding, especially for spares, which will free up cash. This may have a transformative effect on smaller companies and their ability to invest in these new trends.
What This Means for Everybody (and the Midmarket)
Along with the increased flexibility for customers and manufacturers, the above trends will have enormous, worldwide effects.
These changes will reduce labor costs, which in turn will reduce the attractiveness of low-cost economies as well as economies of scale. Together with an increased post-COVID focus on security of supply, this will enable a return to more local manufacturing.
Finally, it’s worth noting that more local manufacture would be a reversal of decades (or centuries) of growth in global trade of manufactured goods. Despite forecast increases in consumption, a recent ING report estimates a reduction in world trade by as much as 40% by 2040!
The reduction will affect a wide range of industries, from shipping to insurance, and may have very broad-ranging geopolitical ramifications as well. It won’t be the first time that manufacturing has changed the world!
It seems then quite reasonable to speak of another industrial revolution. But while many in the IT industry will want to sell solutions, we see it more as a leadership challenge. We believe that ambitious mid-sized businesses will find huge opportunities, so long as they have the right leadership in terms of their IT and technology.
Well, you should be concerned. Criminals are ramping up their activities because systems are more vulnerable when people work from home.
But there’s no need for panic. Most cyberattacks are successful simply because basic steps haven’t been taken.
Here is a simple checklist to ask the person in charge of IT. The answers should all be YES!
Protect your data
1. Do we know for sure that our backups are working? 2. Does data stored on a home user’s drive get backed up? 3. Does our central data storage have versioning? 4. Do we have a Data Loss Prevention system running?
Protect your remote devices
5. Do we have multi-factor authentication set up for our systems? 6. Will our anti-virus, anti-malware and patching tools automatically update for home users? 7. Has everyone who’s working from home signed a communications and internet usage policy? 8. Have we given cybersecurity training to the team within the last six months? 9. Are our legal policies appropriate for people working remotely and at home?
We held the LinkedIn live event “IT Roadmap for Growth – the pitfalls, myths and how to get it right!” on Tuesday, August 10th, 2021. If you couldn’t attend the event, please see the recording here.
This 30min session was led by our Co-Founder and President Graeme Freeman and also featured CIO Bryan LeBlanc. They discussed the importance of businesses aligning their technology/digital strategy to their business goals, the all-too-common pitfalls and how to prepare the groundwork to create a robust IT Roadmap for Growth.
Bitcoin – What Is It and What Does It Mean to Business?
What is Bitcoin?
Bitcoin is a digital-only currency, or “cryptocurrency,” created in 2009. It has many (or perhaps all) of the characteristics of any currency, except it’s 100% digital and that it isn’t controlled by any bank or government—Bitcoin exists without any institutional support and parties transact without requiring a trusted third party, such as a bank. This is because the mechanism for recording Bitcoin transactions, which is called Blockchain, is secure and reliable.
These fundamental differences haven’t stopped people from using it: the total value of Bitcoins in circulation is now over $190Bn!
To find out more about Bitcoin and other cryptocurrencies, and what they’ll mean to your business moving forward, read our CEO’s Briefing:
Bitcoin - What is it? And What Does It Mean to Business?
Depending on how you look at it, either Bitcoin offers the ability to operate safely and freely, or it’s a “wild-west currency” without a trusted overseer.
Many of our clients want to explore opportunities for their employees to work from home. They have two main drivers:
Reduce office costs by reducing space requirements and associated expenses
Ease recruitment by (a) offering more attractive terms and (b) opening-up options to recruit outside their immediate locality
In addition, many knowledge workers are frustrated by their commute. As they increasingly see others working from home, they begin to expect this as an option from their own employers.
But there are so many questions that arise when companies allow their employees to work from home. Our CEO’s Guide, How to Make It Work When They Work from Home, will help answer many of these questions.
The guide covers the business and IT strategy aspects of working from home. It includes issues of cost reduction, recruitment, teamwork, cultural changes, and collaboration. Specifically, it describes team-working for home workers, technology and connectivity, and use of products such as Teams, Slack, SharePoint, Trello, Basecamp, Wrike or WhatsApp.
This guide covers how to enable business applications for those working from home (including virtual desktop technology, e.g. Citrix) as well as outlining issues of cybersecurity. In addition, it discusses how to change management style for remote workers, including defining jobs, monitoring performance, and encouraging collaboration.
Finally, the CEO’s guide talks about how home-working can improve disaster resilience, which is related to business continuity planning, (BCP), disaster recovery (DR), and risk management.
How to Make It Work When They Work From Home
There are many questions surrounding employees being able to work from home. Our CEO’s Guide, How to Make Home Working Work will help answer many of these questions.
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