The continuing pandemic has put stress on many business operations due to the disruption in business demand, supply chain fluidity and staff availability. The aftermath of the quarantine period for most of the world has been a rollercoaster of uncertainty with surges in demand for items like chips and containers and products that are downstream in the manufacturing process like cars, inordinate delays at ports, and staff shortages due to an uptick in resignations and lingering health effects.
The pandemic has also been an eye-opener for businesses forced to look at operations from a new perspective. Businesses that had already embarked on a digital transformation journey were not in the same dire straits as organizations that had not been as forward-thinking.
In order to survive, businesses across all industries must be willing to undergo a digital transformation, including the adoption of new and emerging technologies such as automation. Vertical markets in particular address technology differently due to regulations, processes and nuances specific to their market segment.
As Deloitte notes in their 2022 Manufacturing Industry Outlook, manufacturers with higher digital maturity before COVID-19 had an advantage to some extent with greater resilience, as did those that accelerated digitalization during the crisis. For a manufacturer, digital maturity takes two roads – their production operations and their ongoing business operations. Without staying in sync with present-day technological advances, manufacturers fall behind.
Updating equipment and incorporating new business processes for greater productivity will fend off the competition and overseas low-cost providers. Adopting a digital mindset and automation culture will drive the level of digital maturity and enable the organization to be more agile, not just on the production floor, but in their critical back-office operations that keep the business functioning. For these two focus areas in a manufacturer – production floor and corporate operations – the common denominator is automation.
Shared Services & Outsourcing Network’s 2021 State of the Industry Report asked respondents about their current state of automation. Only 4% were not engaged at all, while 25% had already scaled their automation expanding beyond their initial engagement, and 11% percent were adopting emerging technologies of artificial intelligence (AI) and machine learning (ML) — the early adopters in 2021.
What about now?
Looking back on this data, SSON notes that a lot changed in 2021. “The number of tools based on AI technologies of all varieties mushroomed over the course of the year, changing the focus from efficiency to transformation.” The disruption of the pandemic was a game-changer.
All but essential businesses had to close, and to keep those businesses open, there was a great risk to the worker. Senior management saw the problems, and only then began to ask themselves how they could reduce the risk and leverage remote work for the office employees. And on the production floor, they only began to think about how they could automate the processes more when forced to view their operations through a new lens.
Deloitte’s study identifies five key trends for manufacturers, one of which pinpoints digital technology adoption. They note that to be successful in the long-term, manufacturers need to “embrace digital capabilities from corporate functions to the factory floor.”
It is the organizations that are continuously improving all of their operations that will weather future disruptions more easily and find the true value of emerging technologies. According to Manufacturing Tomorrow’s Coming Changes to the Manufacturing Industry in 2021, the use of robotics and technology in manufacturing is growing so rapidly that the shift is being called the next industrial revolution. The surge of IoT, automation, robotics, and machines that utilize deep learning is rolling out in manufacturing warehouses everywhere – and this is just beginning.
Cobots (collaborative robots) on the production floor and software bots in the office, both sharing activities with humans, become the digital assistants that the industry needs to dramatically affect how manufacturing operations can change how employees work.
By embracing robotics for process automation – on the floor or in the office – these tasks are automated even more. Bots add to employee productivity in both arenas by completing the task for the human or by assisting. Tedious, repetitive tasks handled by the bot are helping to erase the inefficiencies and transforming how work gets done.
Does this replace humans? Never. Office workers are relieved of “junk work” so they can do thought-work. Bots achieve greater accuracy on production workers’ tedious work, freeing up humans to do more specialized critical operations and oversight. Bots can be trained for many things, but not everything, and can ease the burden of labor for workers, increasing efficiency, quality and speed.
Every industry has a back-office or customer-facing team that keeps their business going. So the conversation around bots, AI and ML is not just for the production floor.
Corporate functions are the backbone of business and ensure the orders get processed, the invoices get sent and the inquiries are handled. Whether providing a part to another business or providing a product directly to the buying public, the customer experience is critical.
Taking the time to enhance those operations with emerging technologies enables manufacturers to better play the game. Shutting down for COVID? With the corporate functions able to quickly pivot to remote work, those business processes are not affected. But the pivot has to be supported by technology, adopting, training and leadership support in order to be ready to ensure business continuity.
For instance, digitizing and automating processes ensures the physical paper is not a bottleneck and staff does not have to be in an office to process that paper. Layer in the value of using robotic process automation (RPA) to cover the repetitive tasks 24/7, then corporate truly has an operation that never sleeps.
AI-enhanced software just makes it all more interesting. When Accounting goes through testing, teaches its bots and checks up on their performance, they end up with a powerful application that can be up to 100% percent accurate with minimal exception handling. The key is the willingness to take this step. Manufacturing Tomorrow has stated that the growth of AI and IoT technology has finally become something American manufacturers cannot ignore. It’s not going away and those who fail to incorporate digitization into their companies will get left behind.
Edge technology has manufacturers rethinking their computing direction. With edge computing, computation and data storage is closer to the source of the data. For instance, with video security cameras, the images flow to an edge device and then can get pushed to the cloud. Why not directly to the cloud? Using the edge, the flow can be controlled, improving response times and saving bandwidth.
The technology is the answer to the increasing amounts of data we now work with, create with our IoT devices, and will be working with in the future as the volume of IoT technology exponentially explodes. It is also supporting the AI algorithms by processing them locally.
Manufacturers rethinking their operations need to consider the value of a well-designed edge platform and how placement at the edge will help their efficiency. They will see edge AI, edge IoT, and edge analytics driving the new industrial revolution. According to Gartner, by 2025, 65% of global manufacturers will invest in edge AI as a part of their IoT-enabled hyper-automation strategy, up from less than 10% today.
When building a strategy, all these technologies should go hand in hand to support the future of manufacturing and corporate operations. They will enable manufacturers to be ready for future disruptions and build a more sustainable operation as they see the acceleration and increased utilization of software taxing bandwidth. They must be able to be agile and to scale to sustain growth. In the long view, they will be rewarded with the flexibility and knowledge they need to weather future, unforeseen disruptions.