How Manufacturers are Creating Value with Technology
Manufacturers in the United States are entering a new phase of the Industry 4.0 era, where their digital investments are paying off in unprecedented ways. Acumatica helped define Industry 4.0 as, “The concept of combining automation of manufacturing processes with analytics through technologies such as cloud, analytics, and the Internet of Things, thus increasing efficiency and productivity.
Prior to the pandemic, manufacturers who implemented Industry 4.0 strategies were better prepared to deal with its disruptive effects and are now in a better position to rejoin growth mode than their less digitally advanced counterparts.
BDO USA conducted a survey last year and recently published the 2021 Industry 4.0 Survey Results which show insightful information including how digital divergence is growing and how manufactures are creating value with technology.
Upgrading Supply Chain Strategies
The next era of supply chain management will be defined by value creation. Manufacturers that can both satisfy demand while creating new value for their own businesses and customers will have an advantage over their competition.
Improving supply chain efficiency is the top digital objective for manufacturers this year. However, manufactures have a split emphasis when it comes to the exact strategies they’re working to improve. This might be due to the Amazon Effect, which is pressuring all businesses to improve their speed and service quality in order to get their items into the hands of their consumers, regardless of cost.
If members of the first group feel they have completed the digitization of their supply chains because they have implemented a specific number of Industry 4.0 technologies, they need to reconsider their strategies
The Digital Thread Isn't Quite Reality Yet
Manufacturers have made little progress in developing a digital thread—a communication framework for integrating data flows throughout the supply chain ecosystem to provide an integrated picture of an asset throughout its lifecycle—since 2019.
Most manufacturers, on the other hand, are adopting or planning to implement the fundamental technologies that allow the digital thread; nonetheless, the digital thread is still a long way off.
The Growth of Digital Divergence
The gap between manufacturers who embraced Industry 4.0 before the pandemic and those that have just begun to execute an Industry 4.0 strategy is expanding in terms of maturity and overall business success.
“(Re)Born in Digital” firms, which are either younger enterprises that have incorporated Industry 4.0 technology across their operations from the start or incumbent organizations that have embraced Industry 4.0, represented one category of the most digitally advanced manufacturers.
The group of less digitally advanced manufacturers, whether startups or incumbent organizations, is predominantly “Legacy” manufacturers. Fewer of them are pursuing an Industry 4.0 strategy and expect to spend less on their digital investments than those (Re)Born in Digital manufacturers.
They also have not had as much success to date with their digital investments as (Re)Born in Digital manufacturers.
Focusing on Customer Experience
Manufacturers consider the quality of their customer service to be a key value driver for their company, and they are investing to improve it. Improving customer experience is the second most-mentioned overall digital priority among manufacturers, and 20% believe it is their competitive differentiator, second only to better products/services.
For example, the pandemic has made it necessary for manufacturers to be able to connect digitally with all of their clients, and as a result, more companies are aiming to build conversational AI/chatbots.
Prioritizing Connectivity and Agility
Although there have been some early victors in the Industry 4.0 race, firms cannot afford to rest on their laurels. As new and better ways of doing things are devised, technology continues to advance. In the long term, manufacturers who understand that Industry 4.0 is about continual development will be the most successful. Setting up your company with the right Manufacturing ERP software is another way to step in the right direction towards success.
Upcoming Webinar
Executive
Roundtable: How Manufactures are Creating Value
with Industry 4.0 Technologies
The manufacturing sector has come roaring back since the pandemic and recession hit the sector hard. Now that demand and production levels have rebounded and remain at stable levels, manufacturers are looking towards the future. Join BDO and Acumatica’s live webinar that will feature conversations with three manufacturing executives about how they’re planning to use Industry 4.0 tools and solutions, like Cloud ERP, to accelerate growth in the months ahead.
