The manufacturing sector has been subjected to varying scales of planned and unplanned demand fluctuations and supply chain disruptions. This is on account of economic policy changes, trade wars, seasonality, economic meltdown, and natural calamities like floods, earthquakes, and tsunamis. Organizations have learnt from these events and have designed systems and processes to be flexible and responsive to these incidents. The current disruption on account of COVID-19 is not new for the manufacturing industry but certainly it has never faced an impact on this scale as a result of any event. Demand for certain products increased multifold and supply chains were disrupted so significantly that most manufacturers struggled to keep pace with market demand. On the other hand, others struggled with high levels of inventory across the supply chains.
One thing that leading manufacturing companies did during their low demand days is that they invested in preparing for the future. During the economic recession of 2008-2009, forward looking manufacturing companies invested substantially in training and development of their employee’s skills. A major portion of the workforce time was invested in driving continuous improvement projects, conducting trials, process innovations, etc., that were typically difficult to manage during business as usual scenario. Clearly, these companies benefited from their investments and were able to scale up quickly compared to competitors. The importance and role of operational excellence tools like Lean Manufacturing, Six Sigma, TPM and TQM in enhancing the maturity of the manufacturing sector can neither be questioned nor overlooked. Over the past few years, adoption of Information Technology in the manufacturing sector has increased significantly and has driven the continuous improvement journey.
Again, forward-looking companies would like to use the current scenario to accelerate their Digital Manufacturing journey—but the business situation doesn’t support it. While a few companies have been able to manage and continue the digital transformation journey, most manufacturers have put their plans on hold on account of financial constraints. As markets are slowly opening across the globe, normalcy will take time to return Most CXOs believe and understand the importance of investment in IT at this point of time but uncertainties in the economic scenario, cash flow challenges and short term returns in IT investments make them inclined to favor a delay in their Digital Manufacturing plans.
ITC Infotech understands the importance of technology in a manufacturing setup and has accordingly modified solutions and offerings to address some of the challenges of a CXO. In this blog, we talk about our 4D-MES framework that can be leveraged by companies to manage their ongoing Manufacturing Execution System rollouts or start the MES journey that has been put on hold. The 4D MES Framework allows manufacturers to extract maximum value at optimal cost from their MES landscape. The framework optimizes cost in the current program and generates additional value from the existing solution without new capex or major investments. The dimensions of the 4D framework are as follows:
- Domain Leadership – By pre-building industry templates leveraging our access to manufacturing plants of our parent company ITC Limited and utilizing the knowledge of domain experts, we reduce MES implementation lead time by almost 30% and help realize return on investment in a much shorter duration in addition to implementing industry best practices.
- Depth of Technology Expertise – Our Technology Assessment Framework is used for improving MES components utilization and to extract maximum value from the existing MES landscape. Automation toolkit (DevOps & Test Automation) helps automate the end-to-end MES lifecycle resulting in development and deployment effort optimization and business disruption reduction.
- Delivery Efficiency – The current team structure is designed and equipped to work remotely at 100 percent efficiency, helping us design, develop, test and deploy solutions even in a scenario where mobility is severely restricted. The team structure leverages the concept of shared resources to improve resource utilization and optimize overall development cost.
- Disruptive Business Model – The proprietary assessment framework helps quantify benefits from an MES implementation and enables us to work on commercials linked to an outcome-based model. Subscription-based pricing linked to the number of users and factories, variable bandwidth-based support engagements and commercials linked to outcomes help manufacturers reduce the overall initial investment and risks associated with a milestone-based payment model.
Recent surveys and articles by leading consulting companies highlight that technology will play a vital role for manufacturing and supply chains in the post COVID-19 era. CXOs believe in its importance and commit to its adoption but, with few exceptions, also agree that their digital journey is not well funded. The implication is clear: organizations should leverage the innovative and compelling business models and differentiated solutions being offered by technology companies to accelerate their digital manufacturing journey and prepare for the post COVID-19 era.