The 4th industrial revolution: it’s time to focus on the end-consumer
Today’s end-consumer requirements are changing so rapidly that the B2B model operated by many manufacturers is becoming outmoded. New technology is having such a dramatic impact on the way people live that companies are increasingly being urged to think of the end consumer first and foremost.
In a new whitepaper on aligning business change with technology investment in UK manufacturing, Stefan Barden, former CEO of Northern Foods and UK CEO of Heinz and Brakes comments: “If you’re B2B, think of yourself as B2B2C. Start with the consumer and think how technology can help you win. A successful strategy will always have IT underpinning it, but IT is the last thing to think of – not the first.”
This kind of mindset can keep manufacturers fresh and relevant, and ensure their products, business processes and strategies continue to drive the success of their customers.
A recent Barclays report predicts that manufacturers could boost the sector by an additional £102 billion per year by 2026, through investment in 4th industrial revolution (4IR) technologies such as big data, Internet of Things, analytics, artificial intelligence and automated systems.
In this blog, we examine what advantages digital transformation for the 4th industrial age can bring, helping manufacturers become agile and adaptable enough to respond to end-consumer demands in today’s competitive environment, and ability to add capabilities and insight to products and wraparound services.
Supply chain agility and collaboration
Collaboration is changing between internal and external supply chains. Manufacturers who aren’t digitally connected and collaborating with all their suppliers, partners and customers run the risk of additional costs and being left behind by their connected, more agile competitors.
Most large manufacturers operate with a core central system – typically an ERP package – for production, supply chain and finance management, and general business processing. However, these highly integrated business suites don’t always lend themselves to quickly supporting a change of strategy or fresh business direction.
In an era of fast-changing consumer trends, it’s now prudent to have in-built flexibility in processes and systems to support business-led digital transformation for process optimisation.
For instance, the baker Warburtons has operated with SAP ERP for many years but has been adding more flexible integrated solutions to its core functionality, including promotional planning software.
This has helped to improve forecasting accuracy, saving over £0.5m in the first two years. Iain Bishop, Senior Commercial Forecast Manager at Warburtons, comments: “Given that we produce over two million wax-wrapped loaves, wraps, crumpets, pancakes and bread rolls every day, a 6% increase in forecast accuracy is a massive achievement.”
(See The New Era: Making the most of technology whitepaper for full details.)
Connected operational technology
Manufacturers increasingly want to connect their shop-floor to their core planning and execution systems. Here, we’re talking about linking devices on the shop-floor not just to process control systems, but to real-time management control systems, and connecting devices to allow for proactive and predicative maintenance.
This evolution of technology on the factory floor means has the potential to reduce costs and to be a valuable source of information to support business decision making.
Rob Pritchard, former CIO at global drinks company Britvic agrees:
“Micro-second stoppages on production lines and understanding what causes them, and all the data to see what’s really going on, can help drive micro gains and percentage improvements. This is all within the CIO’s remit now, as it provides a chance to lower the cost of manufacturing and build more margin into products.”
Around the world, manufacturers are understanding that 4IR technology gives them the ability to measure work accuracy and boost efficiency on the factory floor in real-time.
Making it happen
Today’s manufacturers face huge challenges but change also provides the opportunity to drive efficiency and take advantage of new capabilities in 4IR technology to keep up with changing end-consumer demands.
Successful digital transformation means integrating these new technologies and processes efficiently into your business systems. The key is to create a business process underpinned by information and technology, rather than approaching it as a technical implementation.
For major projects like implementing a smarter process or simply revamping ERP systems, it often pays to look to third-party consulting expertise to ensure you reach the right balance between business change and the delivery of IT technology solutions.
Find out more
Our full report, The New Era: Making the most of technology, is available to download free.
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