If we take a look back at each major technology shift that has transformed the manufacturing industry, the identification and harnessing of a new type of utility is at the core. We have seen how the power of water and steam has introduced mechanisation to the production process; how electricity has enabled mass production; and how the rise of electronics and computers has substantially increased production automation.
As digitalisation continues to disrupt the foundations needed to operate a successful manufacturing business today, cloud computing is proving itself as the new utility that is helping manufacturers to compete, innovate and survive in this constantly evolving industry. Not only is it creating new opportunities for business growth and innovation, cloud computing is improving everything from product design and creation, through to inventory management and supply chain visibility.
Redefining supply chains
By moving their entire operations to the cloud, Australian manufacturers have the opportunity to rethink and redefine their underlying supply chain operations. Instead of each factory and warehouse being separately managed and monitored like separate links in a chain, manufacturers can achieve a complete view of their entire operation by establishing an integrated, demand-driven environment.
Enabling new levels of flexibility and transparency, an integrated, demand-driven environment utilises a unified data set that fully integrates all supply chain business processes in the cloud, regardless of where they occur – whether entirely within a manufacturing plant; within the facilities of one or more partners; or initiated in one location and completed in another. This environment brings all those processes together and enables data to flow freely across the entire environment.
Manufacturers gain the ability to not only manage their own operations, but also those of their partners. By doing so, they achieve control and insight into their entire supply chain, as well as the complete lifecycle of their manufactured products, from prototype through to finished product.
Moving towards mass customisation
We live in a customer-centric world – customer expectations for product design, quality and availability are set very high; there is growing interest in more personalised products; and the need for the latest products means the lifecycle for many is continually shortening.
While the focus of manufacturing has traditionally been on mass production, today it is shifting towards mass customisation, which combines the low unit costs of mass production processes with the flexibility of individual customisation, to keep up with these rising expectations. It is critically important for manufacturers to now have complete control and real-time visibility across their supply chain to meet customer demand.
As the manufacturing process continues to become increasingly digitised, manufacturers will be forced to turn to new and emerging materials and technologies. They will have to collaborate more closely on innovation and design with a broader set of communities – partners, customers and potentially anyone with useful input and expertise – which means they will need to focus on the business processes that will help them achieve this.
Leveraging emerging opportunities to drive value
As technology becomes more entrenched into all facets of the creation of goods and material as a result of digitalisation, the Internet of Things (IoT) and 3D printing are emerging as two disruptive forces set to change the manufacturing process, as well as many business models and focus.
With more products now including embedded intelligent sensors, the IoT is creating new opportunities to drive manufacturing and supply chain performance. Other than making manufacturing operations more streamlined, efficient and faster, these smart technologies generate a lot of valuable real-time information that can be captured and analysed for actionable insights.
We will begin to see components and finished products digitally communicating critical data with manufacturers and with each other directly from the floor. If there are any issues or defects, for example, this will be immediately communicated to enable manufacturers to act quickly to dramatically rectify the issues and improve product quality.
3D printing is also disrupting conventional manufacturing and supply chains, offering improved product design, faster times to market and increased profits due to lower manufacturing costs. The shift towards 3D printing could see companies no longer needing large workforces or having to move offshore to produce cheap products, like so many Australian icons have done in recent years.
Today, manufacturers mainly use 3D printing to prototype products, but as the printers become commodity items, they may become a household fixture in the hands of many consumers in the future. Once that happens, some manufacturers may shift to focus purely on product design, while consumers “make” the products via their printers.
Responding to disruptive change
Sparked by cloud computing, the next evolution in manufacturing is upon us as manufacturers reinvent their businesses and processes to take account of mass customisation and emerging smart technologies.
By moving all core business processes into the cloud, manufacturers are positioning themselves to replace complexity with fluidity, and educated guesswork with real-time transparency and execution. This will enable them to be more agile and responsive to all the forces of disruptive change, while at the same time achieve optimum performance, reduced costs and improved efficiency.
Mark Troselj is vice President and General Manager of Australia and New Zealand for NetSuite. For more information, contact NetSuite Australia on 02 9464 6100 or visit www.netsuite.com.au.