Resolving three key manufacturing challenges with process optimization
The US Manufacturing sector continues to grow, with optimism driving capital expenditures and hiring. It currently contributes 12% of the US GDP. Rapid growth has resulted in successes and struggles, bringing about concerns faced by few other industries as a whole.
To continually grow as they have done in the past, discrete manufacturers have to conquer adversity, dealing with unique challenges. In this first blog of a three-part series, we’re looking at the key challenges in the industry and how technology can be used to address these issues.
Empower decision-makers with accurate data
As with the ever demanding market, it’s become the norm to have to do more with less. Which means increasing pressure from senior leadership, especially around Inventory Management. Of all the challenges discrete manufacturers face, visibility and management continue to be the most prevalent. Of the common issues facing manufacturers, which are you finding the most challenging in your business?
- Multiple excel spreadsheets with no single point of truth
- Difficulty in monitoring KPIs
- Excess Inventory levels causing SG&A problems
- Failure to keep track of stock
- Low product turnover
With the ever growing demand for increased product variations, this throws into the mix the problem of sourcing the raw materials in the first place. With a lot of suppliers needing extended lead times to get the products to the manufacturer, organizations struggle to forecast their inventory demand early and correctly, if not done properly it puts increased pressure on production planning and ultimately, client relationships become strained due to poor order fulfillment, sometimes to a point beyond repair.
Simplify production with predictive planning
It’s an area of Discrete Manufacturing which is the heartbeat of operations. These challenges can be detrimental to the success or failure of many manufacturers, with increased product complexity and the need to get products out of the door quicker, Production Planning takes a fundamental role in ensuring efficient processes and people management. Within the realms of production planning, here are a number of key issues facing manufacturers. How many of the below are still putting the pressure on your production planning?
- Use of unsuitable and dated technology, such as Excel, to manage planning
- Lack of data visibility from teams not seeing the shop floor
- Over optimistic scheduling without factoring in possible downtime
- Reactive instead of proactive maintenance for asset management
- No clear understanding of capacity
- Minimal continuous improvement planning
- No clear visibility for customers of where products are in production process
- Customer pressure on visibility of source pricing and sell pricing impacting margins
Proactive management of fluctuating customer demand
It’s becoming very common to have endless product variations. Customer demand on organizations to demonstrate flexibility and continue to meet requirements but with more product variations, is now the reality of today’s discrete manufacturing industry.
The identification of changing demand patterns is certainly a common problem, product lifecycles are reducing drastically and the volumes are on the increase. This puts strains on enough skilled labor, equipment which has the ability to produce masses of product variants quickly and with minimal downtime. All these are drivers for hitting the bottom line and are a key issue within the cost pressure challenge.
How process optimization is addressing manufacturing challenges
With the above issues being very current, they are having real-time and drastic implications on the ability to meet the increasingly challenging revenue targets as well as satisfy customer demand.
Process optimization is critical in manufacturing to:
- Drive a proactive, transparent supply chain
- Build a foundation for innovation to take advantage of IoT, predictive analytics and blockchain
- Enable adaptability in rapidly changing markets
Manna Foods recent SAP S/4HANA implementation has enabled them to empower decision makers and simplify production. From empowered consumers and high brand loyalty to greater trust between supply chain partners, the solution has driven more mature, streamlined processes. Find out more in the video case study here.
Without innovation in the business process and technology aspects of manufacturing, organizations are failing to address these challenges and are heading on a downward spiral. Consequently, competitors who innovate and continue to meet the ever demanding customer needs are the ones who are succeeding both now and in the long-term. Short term vision and planning can mean long term failure or stagnating growth.Next up: The challenge of complex supply chains and the impact on business planning.