If you work in manufacturing, you’re familiar with the hype around Industry 4.0.
You’ve heard that digital transformation is the future. That investing in technology is the only way to maintain your competitive edge. And while you probably know change is inevitable, one thing remains crystal clear:
Transformation is easier said than done.
While terms like artificial intelligence and the internet of things are becoming part of our daily lives, it can be hard to see how they relate to the day-to-day running of businesses.
Case studies about drones and automated machinery are certainly inspiring. But change isn’t as simple as flipping a switch. Each new initiative needs to solve a specific business problem and be coordinated to fit in an overall long term strategy. And it requires the financial, cultural, organizational and behavioral backing of the entire business.
In this article, I want to deep dive into the challenges facing manufacturers – and explore how SAP S/4HANA can overcome them.
A changing industry
Many manufacturers have already embarked on their journey towards a more digitized future. Early success is common. But inevitably, the biggest challenge comes down to scaling.
Pilot projects are one thing. But to take digital further, businesses need to become much more knowledgeable about technology and demonstrate business proof when it comes to sustainability and return on investment. Understanding the practicalities of implementation, and how to develop new models, tailored specifically for their organization, is crucial.
It’s a big ask. It requires a good amount of technical knowledge – and the imagination to think outside the box.
They also need to consider security. There’re huge benefits to bringing systems online, but it comes with the added responsibility of securing their (and their customers’) data.
Another issue is the shear complexity of manufacturing infrastructure. For many, this consists of multiple plants, a diverse array of platforms, and tiered suppliers – each with decentralized software platforms. Keeping everything connected is a huge challenge. Particularly when trying to avoid costly downtime.
Manufacturers are, understandably, cautious. All of these challenges are significant. And when business is, for now, ticking along comfortably, there isn’t much appetite for change.
The core of the problem
It’s time for businesses to rethink their key operations. To lay the foundation for how they compete in the future a shift from linear, sequential supply chain operations to an interconnected, open system of supply operations — the digital supply network — will be necessary.
You can think of S/4HANA as an enabler. While businesses can successfully pilot digital projects, it takes a powerful Digital Core to enable real change and adapt to new ways of working – whether that’s integrating IoT processes or automating plants with robotics and dynamic inventory control.
Scale is the key word here. All of these technologies generate huge amounts of data. And as businesses build out their tech stacks, they’ll find that MES, Supply Chain and ERP systems of the past won’t cut it.
S/4HANA provides a foundation for digital transformation. It has the raw power to crunch huge amounts of data, as well as the visibility to provide all kinds of Digital Twins as the single point of truth. This puts businesses in complete control of their planning, designing and execution processes, covering all aspects of the manufacturing cycle, from market needs to the shop floor.
Silos will be broken down and platforms much more standardized, giving each business participant the opportunity to contribute to the digital core. This enables businesses to benefit from a seamless flow of data that gives them a 360-degree view of their operations.
It’s a powerful manufacturing solution to the scalability and complexity problems I noted above. It empowers manufacturers to grow at their own pace, giving them the tools to try out new technologies and grow more ambitious as their confidence grows.
From pre-empting machine downtime and optimizing workflows to addressing environmental demands and demographical change, manufacturers can unlock new worlds of efficiency, and even explore exciting new business models.
Intelligent factories may seem a way off. But in reality, once a roadmap is built, manufacturers can reach their destinations quickly. The first step always seems the hardest. But once businesses decide to migrate to S/4HANA and not just follow a single technical requirement, they’ll be well on their way to a digital future as an Intelligent Enterprise.