ARTICLE | June 06, 2023
Authored by RSM US LLP
Digital transformation is crucial for manufacturers that want to drive revenue, reduce costs and thrive in the future. To successfully undergo that transformation, industrial companies need to improve their global supply chain with advanced technologies, prioritize data-driven decision-making, and make IT infrastructure enhancements.
Strategic investment in Industry 4.0 technologies is critical in driving the factory of the future. In truly digital factories, real-time metrics make adjusting to supply chain disruptions easier, connected devices make operations more seamless, and a variety of advanced technologies make scenario modeling more accurate.
The possibilities are vast. RSM can help you understand where to start.
Data is the foundation
Data is the thread that runs through virtually every conversation today about the future of manufacturing, from the potential uses of machine learning, to the broader capabilities of factories of the future, to what the workforce will look like in years to come.
Organizations’ ability to harness, filter and analyze data is central to digital transformation. Connectivity among machines, products, employees, suppliers, customers and processes across the value chain is the key to unlocking the value of this data.
To be able to take full advantage of the enormous amount of data they generate and collect, manufacturers need to focus on three foundational areas:
- Data and system architecture
- Data governance
- Data analytics, both traditional and advanced
A robust information technology infrastructure is of particular importance, and most middle market manufacturers’ IT infrastructure is not ready to support advanced Industry 4.0 technologies. Technology should lead the way in how manufacturers think about investments, and manufacturers will need a flexible, scalable and highly interconnected IT architecture to support the shift to more data-driven operations and meet the challenges of the future.
“I’ve challenged the RSM team to leverage new technologies, and then they come and show me the art of the possible.”
Colm McKenna, Vice President of Internal Audit and Sarbanes-Oxley Compliance at Element Solutions Inc.
Reimagining global supply chains
The era of globalization is transitioning to a new state, and manufacturers need to take advantage of technology to create more connected supply chains. Companies that prioritize the digitization of their supply chains will be in a better position to respond to future supply and demand disruptions.
With entrenched global supply chains presenting more risk in recent years, manufacturers would do well to explore whether a regionalized supply chain network may better suit their needs and the needs of their customers.
Companies also need to understand how the growing focus on environmental, social and governance issues affects their supply chain decisions. With the right planning and strategy, manufacturers can harness ESG frameworks to improve product quality, production efficiency, profitability and talent attraction.
“Rather than saying, ‘Well, most companies do this,’ RSM’s team was willing to listen and understand what about what we were doing was unique and special and finding a solution.”
Jordan Edwards, Director of Operations at Wild Goose Filling
Harnessing advanced technologies
Companies are using artificial intelligence, cloud computing, the industrial Internet of Things, advanced data analytics, additive manufacturing, smart devices, virtual reality and advanced robotics to accelerate innovation. These advanced technologies enable manufacturers to be more efficient, faster and more focused on optimizing customer lifetime value.
Manufacturing has always used technology to increase efficiency and productivity. It’s a trend we expect to increase, especially as more manufacturers adopt advanced tools to help them increase their agility, enhance productivity, accelerate growth and manage a more dynamic workforce.
Creating a strategy and adopting a business model to take advantage of Industry 4.0 technologies makes it easier to navigate change and allows manufacturers to reinvent their business models to focus on value-added services. These technologies also open opportunities to enter new geographic markets or adjacent market segments.
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This article was written by RSM US LLP and originally appeared on Jun 06, 2023.
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