The Cost of Manufacturing is changing rapidly in India. Automation is helping businesses operate at ever-higher levels of efficiency by giving businesses improved precision and productivity across different industries. However, as many in the industry such as Mr. Veerendra Jamdade from Vritti Solutions have noted, true competitiveness now requires more than just operating their machine to a higher level of production; it requires a deeper type of integration with each company being able to think as an interconnected ecosystem within the industry. Further to that point, the next step for manufacturers will continue moving forward from machines that run at higher speed working independently to the industry being able to move forward through a more cohesive interconnected ecosystem that has successfully aligned data, departments, and decision-making, therefore, allowing organisations to move from being fragmented and efficient to having co-ordinated intelligence as they compete in an increasing worldwide competitive marketplace.
From task efficiency to enterprise intelligence – While automation provides improved individual functions like production speed, reducing defects and packaging accuracy, often the benefits are limited to a departmental basis. Integration expands that level of efficiency into enterprise intelligence by integrating production data with sales orders, purchase cycle figures, and financial plans. Having the systems communicate allows for real-time decision-making rather than an isolated or reactive manner. Manufacturers then utilize that holistic understanding of their operations to plan together, forecast accurately, and optimize the allocation of their resources. This change in manufacturing changes the status of a factory from that of an optimized unit to that of an intelligent enterprise capable of strategically responding to changing market conditions.
Breaking data silos – Multiple systems of operation are used by many manufacturers i.e. ERP systems; CRM systems, etc. that operate independently from each other; and therefore result in the creation of silos in addition to duplication of data, inconsistencies with records, manual reconciliations, and reporting delays. Integration allows to eliminate these data silos by providing a continuous data flow across multiple systems providing a single source of truth. Therefore, each department does not rely on separate spreadsheets or out-dated summary reports as a source of information; instead any information entered into one of these systems will reflect immediately throughout the organisation. As a result will reduce the amount of administrative overheads associated with manual reconciliation, reduce the number of errors through the use of multiple systems, foster greater transparency throughout the organisation, and enable different teams within the organisation to focus on their job performance rather than on reconciling data to validate it.
Real-time operational visibility – In a competitive environment, lacking timely information can result in loss of potential sales. By using an integrated system, visibility can be improved throughout the entire value chain in real-time. For instance, from order entry to raw materials procurement to production status, and finally to dispatch dates, manufacturers can identify bottlenecks, assess their inventory levels and react quickly to operational disruptions. Access to live data means managers no longer need to wait until the end of the month to receive reports; instead, they now have unified dashboards that show evolving metrics throughout the month. Access to this kind of data makes them more responsive, makes customers more reliable, and enhances their ability to make agile decisions thus converting historical data into ongoing competitive advantage rather than just being a record of what happened last month (or last year).
Better demand-to-production alignment – The unpredictable nature of fluctuating demand often causes significant discrepancies between sales forecasts and their respective production output, leading either to surplus stock or missed sales altogether. Integration creates harmony between both the forecasting system and the production planning department, linking them together through the dissemination of “real-time” sales to Corresponding Manufacturing Schedules. Aligning these two functions results in reduced overproduction, stockouts and improved working capital efficiency because resources are allocated based on current market signals versus previous assumptions/estimates (commitment). By linking demand to Capacity Planning, manufacturers can achieve operational stability while maintaining flexibility; thereby increasing both their profitability and their customers’ satisfaction in an ever-increasingly volatile marketplace.
Informed Leadership Decisions– Strategic decisions rely on the use of accurate, consolidated data to make decisions. Unfortunately, fragmented systems create multiple reports that can only partially represent the underlying data for strategic planning. The process of integrating these systems allows for the creation of integrated real-time dashboards. These dashboards allow CFOs and other CXOs to view financial performance, operational metrics, sales and inventory from a single dashboard. This “big picture” view enables CXOs to analyse trade and evaluate risks before making major business decisions. Instead of relying on manual, corporate report-making, executives now have access to real-time enterprise-wide visibility. Rapid change and intense competition have compelled organizations to be able to make informed and data-driven decisions. Therefore, when an organization makes a strategic decision that aligns closely with its operational environment, they can gain a competitive advantage.
Strengthening supply chain resilience – The disruptions occurring globally due to COVID-19 have shown that supply chains with a fragmented approach create risks. With integrated systems, manufacturers gain greater capacity for resilience through achieving end-to-end visibility from procurement through to inventory, production and logistics. By integrating their supply chain systems, manufacturers can track their suppliers’ performances, monitor shipment status and change their sourcing strategies in real-time. Using traceability as a means of quality assurance and regulatory compliance within industries that involve complex products will be improved when there is an event of disruption. In the event of disruption, integrated data provides the opportunity for faster response and coordinated efforts between manufacturers, suppliers and customers. Integrated data helps to eliminate uncertainties by connecting all of the supply chain stakeholders, everyone will be more capable of responding quickly to changes in the global environment.
MSME digital maturity – India’s MSMEs generate a significant contribution to the manufacturing sector; however, they often utilise outdated technologies coupled with limited automation. The integration of existing technologies provides a step-by-step means to achieve digital maturity through interconnectivity instead of replacing the current systems. This means less disruption to business operations while giving companies developed workflows and increased visibility through their operations. Furthermore, MSMEs are able to manage their finances better, develop future production plans, and obtain a clearer picture of their inventory status. In the long run, an integrated operation will allow smaller manufacturers to remain competitive, to operate within larger supply chains, and to grow over time with the necessary complexity to scale successfully.
Competitive advantage in global markets – With its manufacturing goals under programs like “Make in India” and the Production Linked Incentive (PLI) scheme, India has grown in sophistication as a global economy. In order to remain competitive on a global scale, companies need processes that allow them to be reliable, traceable, and to comply with local regulations. Integrating these systems provides reliable documentation of activity and reporting as well as creating reliable methods through which to continually monitor quality across an organization. When all systems are connected and transparent, the organization is better prepared for exporting. Today’s international buyers require operational visibility to hold their suppliers accountable; this cannot be accomplished without the use of integrated platforms. By developing aligned internal processes with those of global manufacturers, manufacturers develop credibility and ultimately have a stronger position within global supply chain networks.
Future-ready foundation – To realise the full potential of advanced digital technologies, manufacturers must prioritise integrated systems that connect people, processes, machines and things. When these advanced technologies are built on an interoperable data foundation, they can create a cohesive system of technologies that will work together. These connected technologies will enable predictive maintenance, intelligent forecasting and automated decision support. If manufacturers do not integrate their digital technology investments, they will remain siloed, making innovation scalable, sustainable and accelerating the change in the way we do business. Creating an interconnected system today will enable manufacturers to continue to evolve with the advances in technology that are coming tomorrow and remain competitive in today’s increasingly digital world.
While automation has transformed India’s manufacturing facilities, automation will determine how successful they ultimately will be. Manufacturers can leverage integration of systems, data and decisions across their enterprise to shift from operating independently on improving operational performance to creating a coordinated enterprise-wide intelligence capability. As a result, manufacturers will be positioned to compete at a higher level within an increasingly competitive and globalized marketplace, making integration not just an upgrade to their operational capabilities, but more importantly the basis on which they can achieve continued success.
