Manufacturers continue to face significant challenges as they strive to restore full staffing levels amidst ongoing disruptions in the supply chain. In addition to these operational hurdles, they are also confronted with the issues of inflation, regulatory burdens, demands for sustainability, and geopolitical unrest in key production and supply locations. To navigate these complex obstacles, manufacturers are compelled to invest in advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), and blockchain. These digital solutions hold the promise of enhancing operational efficiency, product quality, and speed to market. However, successfully implementing these digital transformation initiatives remains a critical obstacle. Furthermore, manufacturers are increasingly vulnerable to cyber threats, including ransomware attacks, which pose a significant risk to their digital infrastructure. It is imperative for manufacturers to address these security concerns while pursuing their digitalization efforts.
Manufacturers are faced with daunting challenges, but viable solutions are attainable. Some require substantial investments in updating production facilities, revamping assembly lines, providing employee training, and restructuring large teams. On the other end of the spectrum, some solutions are straightforward and cost-effective, such as implementing best practices to optimize factory operations and minimize potential risks. Additionally, manufacturers are finding relief by utilizing interconnected software systems to address their key pain points. Below, we delve into the industry’s major challenges and explore both high-tech and low-tech solutions.
Supply Chain Disruptions
Challange : Despite the closure of factories being resolved, the persistence of product shortages caused by supply chain bottlenecks remains due to various reasons. These include pre-existing deficiencies that were further exposed by the pandemic. External factors such as extreme weather events, labour shortages, strikes, trade embargos, and wars can impact supply chains. Additionally, internal factors like inefficient supply chain management processes contribute to the issue.
Solution : Manufacturers may not have complete control over external risks, but they can mitigate their impact by diversifying production, sourcing, and shipping operations across different regions. Supply chain planning systems equipped with scenario modelling capabilities enable manufacturers to anticipate and prepare for potential disruptions. The ability to swiftly adapt to disruptions is essential for effectively managing risks. Innovative supply chain management (SCM) systems offer manufacturers comprehensive visibility across supplier workflows, schedules, and capacities, as well as those of fleets, distribution warehouses, and end customers. The instant status updates provided by these systems enable the quick identification and resolution of bottlenecks that can strain supply chains across various industries. Additionally, SCM systems utilize machine learning to enhance demand forecasting, enabling manufacturers to optimize their planning processes. These systems also streamline business transactions by coordinating orders, deliveries, and payments, ensuring seamless operations.
Sustainability
Challange : Stakeholders including customers, investors, employees, and government regulators are increasingly demanding that manufacturers provide transparent reports on their environmental, health, and safety (EHS) progress. Rather than empty sustainability slogans, these stakeholders are seeking concrete evidence that manufacturers are actively working to lower the carbon footprint of their facilities, reduce waste, conserve natural resources, implement fair wages globally (including within their supply chain), promote diversity in their workforce, and maintain safe working environments. Research indicates a growing concern among consumers, particularly millennials, who prioritize environmental and social responsibility and are willing to pay a premium for products manufactured according to these standards.
Solution : Implementing incremental changes to various production processes can lead to significant improvements, although there are no one-size-fits-all solutions. One effective strategy is to retool production lines to support closed-loop processes, where materials are reused and recycled to minimize waste. Additionally, upgrading waste management systems can help dispose of any remaining waste more sustainably. Another approach is to source materials from suppliers that adhere to EHS best practices. While verifying these practices may require collecting and transparently reporting substantial amounts of data, new systems are available to streamline this process by collecting, harmonizing, and reporting on all relevant information. Manufacturers have the opportunity to leverage blockchain technology for tracking the environmental and labor practices of their suppliers and partners. Enterprise performance management systems now offer EHS planning, consolidation, and analytics that provide decision makers with detailed reports on their sustainability progress and challenges. Additionally, manufacturers can utilize artificial intelligence to optimize shipping routes, thereby decreasing mileage and fuel consumption. Instead of managing their own energy-intensive data centers, manufacturers can reduce their carbon footprint by utilizing cloud vendors with more efficient, eco-friendly data centers.
Workforce Management
Challange : Manufacturers are facing significant challenges in filling vacancies for skilled factory workers, including machinists, welders, and metalworkers. This issue is projected to escalate in the future as a result of a quicker rate of retirement among workers compared to the rate of replacements being hired, or as workers opt for more secure job opportunities in industries with less risk of job outsourcing.
Solution : Businesses have the opportunity to enhance their workforce by implementing mentorship programs and collaborating with educational institutions and universities. By doing so, they can increase interest in the profession and foster diversity within their teams. Additionally, investing in training programs, including those utilizing augmented or virtual reality, can help employees at all levels stay up-to-date on the latest manufacturing technologies and processes. Advanced human capital management (HCM) software suites can assist manufacturers in mitigating labour shortages by forecasting hiring demands, aiding in talent recruitment and retention, pinpointing skill deficiencies, and providing flexible scheduling solutions for existing employees. Additionally, the implementation of AI, robotics, and other cutting-edge technologies can automate certain manufacturing tasks, thereby reducing the reliance on manual labour.
Regulations
Challange : Solution : Many manufacturers face challenges in adhering to regulations pertaining to taxes, financial oversight, distribution, sourcing practices, and more. Additionally, there are new data regulations coming into effect that dictate how companies should store sensitive customer information in their IT systems, whether on-premises or in the cloud. It is important for these manufacturers to comply with regulations governing the use of hazardous chemicals in their processes to meet stringent environmental, health, and safety standards. Similarly, manufacturers of healthcare systems and devices must adhere to strict quality and safety controls, while those producing military systems must follow stringent export regulations.
Solution : Although regulations pose financial, operational, and administrative challenges, they also serve as catalysts for manufacturers to modernize their operations, leading to increased productivity and profitability. Compliance with new mandates related to quality control, waste disposal, employee safety, emissions, foreign trade, and data governance often necessitates upgrades to production lines, factory processes, and financial management systems. These investments generally result in decreased waste and enhanced profits. In response to evolving regulations concerning financial reporting, taxation, and foreign trade, manufacturers may opt to implement cloud-based software for meticulous business expense tracking, regular audits, and waste identification, benefiting from greater efficiency and compliance.
Automation
Challange : Advanced automation technologies such as IoT, AI, robotics, 3D printing, and cloud-based monitoring systems have the potential to enhance factory operations by streamlining manual processes. Despite the industry's focus on implementing smart automation strategies to boost plant efficiency, there is currently no standardization of processes, tools, protocols, and devices. Consequently, integrating various systems poses a challenge when automating the factory floor, rather than simply upgrading individual components. Another obstacle is the need for factories to maintain full-scale operations while introducing new technologies, which must interface with existing production systems. While managers may aim to modernize assembly lines with advanced sensors, they often struggle to do so while meeting immediate production demands.
Solution : Devices and applications that facilitate automation along assembly lines including IoT sensors, computer vision systems fed by cameras, and robots--must be interconnected to efficiently transmit data to cloud-based applications responsible for monitoring, control, and data analysis. Manufacturers hold high hopes for AI, particularly in applications like smart manufacturing, preventive maintenance, online support, field service, and quicker QA testing through digital twins. Generative AI, in particular, is a relatively novel concept for many manufacturers, who may not yet grasp its potential applications or how to integrate the technology effectively. The integration of AI in cutting-edge supply chain and manufacturing systems effectively addresses these concerns. By leveraging AI and machine learning capabilities, manufacturers are able to anticipate and prevent machine failures, optimize production schedules, and minimize costly downtime. Furthermore, they can conduct thorough analyses on industrial equipment sent to customers, ensuring ongoing monitoring of product performance and guaranteeing top-tier customer satisfaction.
Collaboration
Challange : Manufacturing teams often face the challenge of collaborating across multiple sites, some of which are located far apart. This scenario necessitates the need for seamless coordination when assembling products in various plants located in different cities or countries. It is crucial for these teams to harmonize production methods and objectives to maintain consistency in functionality and quality. Similarly, when manufacturing different components for a single product across multiple factories, it is essential to synchronize production schedules to prevent delays in the final assembly process. However, the attainment of a unified product or the creation of distinct product lines is hindered by the utilization of disparate assembly methods, documentation procedures, tracking processes, and reporting requirements, even within the same organizational facilities. Furthermore, manufacturers must also synchronize their schedules and logistics with partners and suppliers, whose systems are often incompatible and disjointed. This necessity underscores the importance of establishing efficient communication channels and resolving operational discrepancies to ensure smooth collaboration and production efficiency across all stakeholders.
Solution : Effective collaboration is often a product of efficient communication. Within a company, this can be achieved by establishing communication channels between managers and employees, such as internal messaging groups, regular team briefings, and Q&A sessions. These simple yet effective methods help ensure that all colleagues are aligned and working towards the same goals. It is essential for managers to keep all team members informed about business developments and provide training on effective communication strategies. Similar approaches can also be extended to suppliers and other partners. Regular meetings and open lines of communication between companies, involving employees at various levels of leadership, play a key role in minimizing obstacles to collaboration.Cloud-based collaboration and project management platforms facilitate the coordination of manufacturing processes for widely distributed workforces by monitoring resources, tasks, and budgets; establishing uniform operations through a shared reporting structure; and regulating access to different components of the production workflow based on job responsibilities.
Productivity
Challange : Manufacturers are seeking ways to address labour shortages, inflationary pressures, and disruptions in the supply chain by enhancing employee productivity. This is commonly measured as the ratio of output to inputs, such as labour hours and capital, needed for production. Several factors can hinder productivity, including inefficient processes, complex workflows, inadequate performance management, and insufficient worker training. As a result, manufacturers waste valuable resources like energy, materials, and employee time. Poor productivity can also negatively impact job satisfaction among employees, leading to decreased engagement and motivation, as well as a higher likelihood of seeking alternative employment opportunities. Implementing technologies, processes, and training to improve productivity can be challenging while maintaining consistent operations on the factory floor. While investing in new systems may ultimately enhance the productivity of each worker and production facility, it can also result in short-term disruptions and delays.
Solution : Improving productivity often involves assessing and enhancing workflows, as well as offering consistent training for all employees, including line managers and production staff. Manufacturers have the option to work with specialized consultancies that focus on optimizing plant operations through process refinement, training programs, and system improvements. Cloud-based ERP systems designed to support manufacturing operations can offer valuable assistance. These innovative applications serve as a centralized platform for all of an organization's data and processes. An effective ERP system has the potential to enhance workforce efficiency by automating mundane tasks and administrative functions. Furthermore, ERP systems are adept at handling data collection, aggregation, and organization, which sets the stage for the utilization of cutting-edge analytical tools and AI technology. These capabilities can provide valuable insights that drive operational improvements and increase productivity. In order to avoid complications and delays during implementation, manufacturers seek out comprehensive ERP and supply chain suites that are fully integrated right out of the box.
Digital Transformation
Challange : Digital transformation of the manufacturing industry also referred to as smart manufacturing or Industry 4.0, revolves around the utilization of technologies for data collection and analysis, as well as the coordination of physical and digital processes within factories and throughout the supply chain. Objectives of this transformation include enhancing productivity, expediting time to market, and reducing operational costs. While most manufacturers acknowledge the necessity of undergoing comprehensive digital transformation initiatives, many proceed cautiously by implementing new systems incrementally. These intricate IT projects, integrations, and change management endeavours may span over several years, all while ensuring that production lines continue to operate without interruption. It is important to recognize that simply deploying new internet-connected machinery, equipment, servers, and software is not the sole endpoint of a digital transformation journey- workers must be retrained and operational processes updated, introducing additional challenges amidst the industries on-going labour scarcity.
Solution : The idea of digital transformation encompasses a wide range of technologies that can be overwhelming for executives, IT professionals, facility managers, and production line workers. To begin the process, it is helpful to pinpoint a specific problem area that requires attention, such as an inefficient procedure or outdated system. Once this issue is identified, organizational leaders can develop a case for integrating a particular module into an existing system, transitioning an application from outdated infrastructure to a software-as-a-service model, or implementing a new cloud-based system. For example, this could involve incorporating a warehouse management module into an existing ERP system or replacing outdated HCM applications with a cloud suite that offers improved capabilities for talent management, training, and employee engagement. When a manufacturer effectively resolves a persistent issue and starts to see a positive return on investment, it becomes simpler to validate and obtain C-suite endorsement for pursuing the next phase of the digital transformation strategy.
Cyber Security
Challange : Cyber-attacks have been utilized to pilfer intellectual property and hackers are increasingly skilled at manipulating software that governs industrial machinery, such as assembly lines and control systems in energy, shipping, and manufacturing sectors. These malicious actions have a detrimental impact on manufacturers seeking to enhance automation and connectivity, as they present significant financial risks to individual businesses and the broader interconnected economy that depends on them.
Solution : Manufacturers are advised to adopt a zero-trust security strategy, requiring continuous authentication for all users. Additionally, employees should be educated on the latest security protocols, such as using strong passwords (and refraining from sharing them), avoiding opening links from unknown sources, utilizing secure Wi-Fi connections, and consistently updating security software. When implementing a new IT system, manufacturers must prioritize security measures. This entails investing in a comprehensive range of cybersecurity tools, including endpoint protection, threat detection, network monitoring, and next-generation firewalls. To streamline these security processes, manufacturers can migrate more of their applications to a cloud provider that incorporates end-to-end security measures as a standard practice.
Data & Analytics
Challange : The rapid expansion of industrial applications and IoT-enabled machinery in factory settings and across the supply chain produces enormous volumes of raw data. The issue for manufacturers lies in the collection, aggregation, and analysis of this data to provide valuable insights into production and supply chain activities.
Solution : Through the utilization of big data platforms and advanced analytics, businesses can transform unrefined data into actionable business intelligence. These sophisticated systems have the capability to unearth hidden patterns within vast quantities of data, empowering organizational leaders to make informed and timely decisions. By leveraging advanced data analytics, companies can proactively identify potential disruptions in their supply chains, enabling them to enhance the resilience of their logistics networks in anticipation of geopolitical shifts. Furthermore, predictive analytics can forecast maintenance needs for machinery and vehicles, mitigating the risk of unforeseen downtime. Some enterprises rely on data analytics to optimize their inventory management processes, ensuring they maintain sufficient stock levels without excessive storage costs. Additionally, advanced analytics plays a crucial role in streamlining complex transactions by identifying and rectifying errors in invoicing, payments, and shipments.Business executives often depend on analytics systems integrated with their cloud-based ERP, SCM, and HCM applications to assist them in visualizing, interpreting, and presenting more accurate financial, supply chain, and HR metrics.
Manufacturers face a variety of challenges that cannot be solved by a single application or technology category. However, Nirmalya provides an extensive range of applications, technologies, and support services to assist manufacturers in establishing a strong digital foundation for success. Our integrated suite of cloud-based manufacturing, supply chain, financial, and workforce management applications is the starting point for this journey.
Nirmalya Manufacturing Execution System, a component of the Nirmalya Enterprise Platform, has the capability to enhance productivity within the factory environment by linking shop floor data from IoT sensors with maintenance and planning systems. Through the utilization of AI technology, the system can anticipate machine failures that result in downtime. Additionally, this platform offers productivity-enhancing functionalities such as intelligent track and trace, logistics visibility and management, as well as smart procurement platform.
Nirmalya SCM and Nirmalya ERP platforms empower manufacturers to efficiently manage finances, collaborate with supply chain stakeholders, achieve sustainability goals, and comply with regulations. With the Nirmalya EAM platform, manufacturers can boost productivity, schedule maintenance activities, optimize asset utilization, and reduce operational disruptions through user-friendly web and mobile applications that enhance asset value remotely. Additionally, Nirmalya HCM platform simplifies HR tasks, including recruitment, onboarding, and retirement procedures, streamlining human resources operations for organizations.
Nirmalya Logistics Management platform offers manufacturers the tools they need to optimize their freight, fleet, and logistics operations to meet sustainability goals and improve ROI in global and local transportation services across various industries and transport modes. In addition to Nirmalya's ERP, SCM, EAM, EDMS, MES, CRM, LMS, FMS, and HCM platforms, our cutting-edge data management and analytics capabilities are second to none. Our advanced Business Intelligence platform harnesses AI-enabled predictive and prescriptive analytics along with role-specific insights, allowing organizations to go beyond traditional data analysis and embrace a data-driven approach to decision-making.
