The Top 5 Technology Trends For Discrete Manufacturers

Technology in an enabler of business strategy. And at the moment discrete manufacturers business strategies are more dynamic and fluid than at any time prior. To respond, technology savvy business leaders and CIOs are adopting new technologies which directly align and support their more nimble business strategies. Here are the top 5 technology trends being adopted by discrete manufacturers.

1. Cloud Technologies. A growing global customer base, increased competition, regulatory pressures and changing tax implications are altering the physical locations of where discrete manufacturers design, build, assemble, distribute and support their products and services. And to support more decentralized operations, many of these manufacturers are significantly expanding their use of cloud technologies.
   
   Whether communication and collaboration tools or enterprise software systems such as Enterprise Resource Planning (ERP), Supply Chain Management (SCM) or Customer Relationship Management (CRM) applications, discrete manufacturers are leveraging cloud solutions for greater business agility, faster implementations, predictable investments and even a change in moving expenditures from CapEx to OpEx.
   
   For discrete manufacturers becoming more decentralized, scaling IT resources to every new location, or delivering IT support services across time zones and cultures creates a services challenge and cost burden. Using cloud solutions to offload application installation, operation and support across locations can better manage costs, improve services and rid a non-core competency.

2. Lean Manufacturing. For over two decades lean manufacturing has sought to eliminate waste and non-value added expenditures from anything in the production process that doesn’t create value. However, only in the last several years have the market leading manufacturing business systems fully enabled this production practice from a technology perspective. And this technology enablement is being adopted by discrete manufacturers in a big way.
   
   For example, manufacturing systems such as SAP ERP, Oracle Fusion, Microsoft Dynamics AX and Dynamics NAV have enhanced their project accounting and cost accounting modules with deep integration to both finance (receivables, payables, ledger) and core manufacturing processes (Master Planning, Shop Floor Control, TMS, WMS) to identify waste and thereby preserve value with less work. After a somewhat slow start, this is a business trend which is gaining momentum and one where we’re going to see more lean principles technology innovation coming from several business software vendors.

3. Supply Chain Optimization. According to Gartner, the supply chain management software industry grew 7.1 percent to reach $8.3 billion last year. And while that’s solid growth, the real technology trend here is the continued morphing of supply chain management systems and manufacturing systems into single solutions. In fact, this trend is part of an even bigger trend in which best-of-breed business applications are being replaced by much broader integrated business suites.
   
   Discrete manufacturers are increasingly turning to the supply chain to reduce cycle times, reduce inventory (and related working capital), accelerate customer fulfillment and lower distribution costs. To help the cause, ERP applications are enabling these more strategic goals with more strategic capabilities such as better leveraging customer segmentation for improved demand planning, integrating multiple supply chain strategies (including Agile, Lean, Responsive and Replenishment) for more accurate forecasting, and simulating buying patterns along with What-If analysis to better align the supply chain with current market conditions.
   
   Demand is the most influential component in determining the best use of working capital, operational capacity and resources and therefore should drive supply chain planning. Fortunately, some forward thinking ERP software vendors are responding to these supply chain strategies by improving their applications to achieve more than distribution efficiencies and become more adaptive and demand driven.

4. Customer Relationship Management. Discrete manufacturers have a reputation of using CRM systems for the bare minimum; essentially as systems of record for sales prospects and customers. However, as buyers are now more connected with other buyers, more informed, and have more options than ever before, companies must rethink their CRM strategy, processes and software.
   
   For example, customers are now more active and vocal when reviewing products. And they’re sharing their findings and feelings with other customers and entire online communities in social networks and Web forums. To meet these customers where they congregate, CRM software systems have evolved to include social CRM tools which leverage social listening and collaboration applications to better identify and engage social customers where they communicate. Early adopters are using these engagement techniques to acquire new customers and deepen their relationships with existing customers. Laggards are sitting the sidelines, uninformed that customers are talking about them and their products, and unaware as to why they are losing customers to competitors.

5. Business Intelligence. Business Intelligence (BI) has evolved from something technical staff do in a back room to something that any decision maker is empowered to do with the right technology. Historical BI software have fallen short of delivering real-time information with easy to read analytics and actionable insights. But that's changing. The scope of BI has advanced from simple dashboards on the front end and sophisticated data warehouses on the back end to also include rapid BI and self-service BI.
   
   But as with all technology trends, this opportunity is dependent upon accompanying business process, and in this case knowing what measures most impact business performance. It’s been my experience in working with discrete manufacturers that there’s a lack of standardization and agreement on the most salient performance metrics. Sure, you could argue that every business is unique and so performance metrics will be different, and I accept that to some degree, but not much.
   
   Clearly, discrete manufacturers that can identify the most salient measures, and deliver the right information to the right people at the right time, will aid those people in making better business decisions, and the company will improve its business performance.

While each of these manufacturing technology trends delivers specific benefits, there is an overarching trend that seeks to leverage their collective gains while at the same time avoid the decades old problems of disparate and siloed information systems.

This all-embracing movement is toward packaged ERP applications which are realizing increased adoption because they are able to deliver the benefits of cloud, lean, SCM, CRM and BI without the customer needing to create and maintain complex system integration and software customization.

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Manufacturers that can identify the most salient measures, and deliver the right information to the right people at the right time, will aid those people in making better business decisions, and the company will improve its business performance.

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