The Future of Manufacturing: Trends and Innovation for Growth
The manufacturing industry is going through a dynamic transformation. Manufacturers are experiencing pivotal changes in consumer demand, the nature of products, the economies of production, and the economics of the supply chain. As technology continues to advance exponentially, new market entrants are also equipped with the latest equipment to compete with the big conglomerates. While large-scale manufacturing is still a dominant force, companies are increasingly moving towards local manufacturing to respond to new opportunities and adopt agile manufacturing.
It is also observed that the boundary separating manufacturers and customers has become increasingly permeable. Manufacturers are feeling the pressure to increase both speed-to-market and customer engagement. Nowadays, customers demand personalization and customization to extract maximum value from every purchase. Delivering personalized products with quality and speed has become a priority for manufacturers. All these shifts in the manufacturing environment have challenged manufacturers to come up with innovative solutions.
The Growth of Manufacturing
Manufacturing has continued to grow despite the challenging period induced by COVID-19. Manufacturing supply chains performed exceedingly well, even after facing some major disruptions over the past few years. Manufacturing now accounts for approximately 16% of the global GDP and employs 14% of the total workforce. It is assumed that the global consuming class will have emerged by 2025 and the majority of consumption will take place in developing countries. This will create rich market opportunities and give birth to a rich pipeline of innovations like nanomaterial, 3D printing, and advanced robotics, etc.
As manufacturers are investing in new technological equipment, smart manufacturing is becoming a visible reality. The emergence of Industry 4.0 has enabled factories to be digitally transformed. Manual processes are being replaced with automated systems, while factories and supply chains are becoming smarter. There is no doubt that Industry 4.0 has enabled manufacturers to increase operational visibility, reduce costs, expedite production times and deliver exceptional customer service. Manufacturers must continue to embrace the latest technologies and trends to beat the competition and win market share.
ERP Trends & Innovations For Growth
Analysts and consultants have painted various scenarios for the upcoming growth in the manufacturing business. Experts are convinced that a shift towards a service-oriented business model is preeminent. Manufacturers will aim to achieve integration from the top floor to the shop floor and across the length and breadth of the supply chain. Smart factories will be the way forward and manufacturers will thrive on data. An exponential proliferation of Industrial IoT (Internet-of-Things) will change the landscape for manufacturing in the years to come.
The Major ERP Trends and Innovations for Growth in the Manufacturing Sector are as follows:
Post-Pandemic Planning – Businesses have realized that immediate actions are required to keep essential business functions operational. Activities of reopening, rehiring, budgeting, and resupplying are needed to restore the business’ scalable state. In addition to this, strategic and durable execution of processes and plans across the organization is necessary to emerge from the prior phases and lay a new foundation for growth. Organizations need to stay prepared for sudden surges in demand as the markets bounce back and reinvent themselves by focusing on new lines of business or by refocusing their manufacturing capacity.
Greater Visibility Into Data – Renewed interest in IoT and increased emphasis on predictive maintenance is a bigger trend than ever before. Companies will now look to transform every surface into a sensor for data collection to generate real-time insights for manufacturers. Collecting data from multiple sources and combining it into a singular platform to gain actionable insights is a top priority. Manufacturers need to have the ability to slice and dice data in ways that provide comprehensive business understanding. The absolute reliance on data is essential to reevaluate their forecasting and planning models.
Modernized Material Sourcing – The practice of importing raw materials for domestic production proved counter-productive in the times of COVID-19. Manufacturers are now showing a renewed interest in sourcing the materials domestically or looking for +1 options to import materials from more than one country. Near-sourcing, also known as local sourcing, helps manufacturers bring operations closer to where the finished goods are sold. As manufacturers attempt to reduce or eliminate dependencies on foreign materials, reshoring and near-sourcing continue to remain crucial to business growth.
Focus On Carbon Neutrality – The threat of climate change looms large over the manufacturing industry. It accounts for about one-third of the total global greenhouse emissions, which is driving companies to move towards carbon-neutral manufacturing systems. Governments are taking big strides toward sustainability and making huge investments in combating climate change. These policies coupled with customer demand for sustainable products will require manufacturers to transform their end-to-end operations. Fundamental changes in the design and delivery of products need to be made for a sustainable future.
Building A Resilient Workforce – Looking ahead, manufacturers need to reevaluate their workforce based on shifts in demand. Companies producing non-essential goods have seen a significant reduction in staff and essential goods manufacturers have had to scale up, add product lines and hire new workers to satisfy demands. IoT automation and process optimization have allowed manufacturers to control costs and maintain profitability. In the coming years, we will be seeing more companies look for ways to diversify their workforce to include women and people from different ethnicities to make their operations resilient.
New Approach to ERP – ERP can streamline business processes, encourage automation, provide accurate real-time data and reduce costs. ERP has now become a mainstay amongst manufacturing companies and COVID-19 has fundamentally changed how manufacturers utilize their ERP systems. ERP aids the efforts for predictive maintenance and also integrates with handheld devices to perform real-time transactions. Manufacturers are looking at ERP as a tool to consolidate all the collected data and perform advanced analytics to predict business outcomes and plan for the future.
Manufacturers will have to make continued efforts to solve and manage supply chain issues. There will be an increased emphasis on minimizing the industry’s carbon footprint. Employees will participate in continuous learning and strive to improve their skills. ERP will play an important role in streamlining manufacturing operations and optimizing operational workflows to drive efficiency and profitability.