The manufacturing sector is no stranger to automation. Manufacturers know how to automate a process, and they know how to scrutinize a production line for any inefficiency. But, they often don’t apply the same scrutiny to their office processes – which can become stagnant and wasteful over time.
Many companies still maintain paper-based tasks. Even if they’ve shifted to PDF documents or enterprise workflow systems, their solutions have gone years without being streamlined or standardized. “Enterprise software has been around since the early 90s, and a lot of that stuff is still in use,” said Grant Thornton Advisory Services Principal Roy Nicholson
But the sector is rapidly changing – the buzz of digital disruption has spilled into manufacturing, and a convergence of factors is now driving manufacturers to review operations on the office side.
There are primarily four factors driving manufacturers to transform their outdated IT systems and office processes. If manufacturers do not address these factors, they risk losing value, market share and their most talented employees.
Factors driving transformation in manufacturing
Changing competitive landscape
Manufacturing has traditionally had a high barrier of entry, given the financial and logistical hurdles of establishing a new operation. But new technologies are making it easier to establish small-scale operations, and for established players to expand into new markets.
Emerging risks in policy and regulatory compliance
The risk of new regulations, tariffs and other compliance issues means that manufacturing administrators need to be flexible and keep their options open, or risk losing out when more nimble competitors respond to changes quickly and form new relationships or take market share.
Financial health and efficiency
Manufacturers to continually demonstrate their financial health and efficiency, which means they need to be especially strategic about investing in long-term improvements. It can be difficult to make the short-term investments that may be needed for long-term viability.
Many manufacturers are still burdened by enterprise technology solutions that absorb almost 80 percent of their IT resources, which leaves few resources for innovation and large initiatives that implement updated and efficient solutions.
Intelligent automation can play a powerful role in helping companies adapt to these market factors. In fact, it’s already proven successful for other companies in the sector.
The success stories
Intelligent automation has proven that it can improve the speed, cost efficiency and accuracy of many office tasks in a range of industries, including the manufacturing sector.
Five real-life use cases for office automation in manufacturing
- Improving inventory management
Grant Thornton Digital Transformation and Management Partner Tony Dinola said that he worked with one medical device manufacturer where picking and restocking processes required a lot of resources because products were time-sensitive and had significant variations. “We worked with them to implement an automated storage system for inventory management, using artificial intelligence (AI) to make recommendations based on historical demand,” Dinola said. The solution saved resource time by reducing waste and over-processing, streamlining orders and replenishment, and even opened the door to continuous improvements by increasing visibility into inventory needs.
- Linking disparate systems
When organizations evolve through acquisitions or technology transformations, they are often left with multiple enterprise resource planning (ERP) systems – or on an ERP system with an overlapping manufacturing execution system, material requirements planning system and more. In these cases, data analytics and data visualization can mediate inefficiencies created by disparate systems. Dinola recalled applying intelligent automation to a data visualization tool that helped one organization link all of its underlying data to produce enterprise-wide reports and metrics. “The company was able to make decisions on that consolidated reporting, versus looking at it in a much more siloed environment,” Dinola said.
- Optimizing/digitizing the supply chain
“Everybody likes ‘just in time’ delivery,” said Grant Thornton Digital Transformation and Management Senior Manager Vivek Rodrigues. “However, in the real world, there’s always a safety stop component. How do you manage that, so that there’s no serious effect on the supply chain if something breaks?” Rodrigues said that AI can look at historical patterns to determine the optimum safety stock to maintain. “The results have a direct tie to the bottom line – because we all know excess inventory has a cost.”
- Reducing cycle time
Rodrigues cited a global electronics company that had a very manual and repetitive process for sourcing special product requests. The process was clearly rule-defined, so the team was able to build it into an automated bot and “from a business outcome perspective, it reduced manual effort for an order, improved accuracy and freed up staff time to focus on other value-added tasks.”
- Improving vendor management
One large manufacturing company was overwhelmed with the growing number of vendors that it needed to validate across its facilities. Rodrigues said it’s common for organizations to struggle with situations like this, which require consulting two sources of data, comparing them and then taking action. “In this case, RPA was used to automate the entire validation process. The RPA extracted the vendor information from the web-based ticketing forms and then performed the validations.”
Dinola said that it’s also common to apply automation to accounts payable, month-end close and tax reporting and compliance. Rodrigues added that “We’re starting to see widespread applicability for automation across all functions in the organization – the front office, the middle office, the back office, wherever there is manual repetitive work. And a lot of the RPA vendors are making it easier for the general user without a technology skillset.”
Your best automation opportunities will depend on the unique characteristics of your organization. “Innovation and ideation is really all about innovative ideas coming from the people that are currently performing the work – from thinking about newer, more intelligent ways to execute work on a daily basis,” Dinola said. To help foster and filter out the best opportunities for automation, many companies begin with by assessing their processes and then implementing a structured methodology for automation.
Most importantly, successful companies recognize that automation is an ongoing effort that requires leadership from a responsible team or specific roles.
To drive ongoing efficiencies, you need to assign teams or roles to drive your intelligent automation strategy. By assigning a central team or role for driving intelligent automation, you can also centralize the institutional knowledge about your lessons learned.
In a recent Grant Thornton webinar for manufacturers, attendees identified whether and how they have assigned the responsibility for ongoing intelligent automation within their companies. Although many manufacturers have hesitated to establish a center of excellence (COE) or other central responsibility for intelligent automation, this central authority can be an early indicator of which companies will achieve their goals.
“One of our observations is this: The organizations that establish a COE for these intelligent automation initiatives are by far the most successful,” Nicholson said.
As market forces continue to drive manufacturers to review and streamline their office processes, it’s time for companies to establish responsibilities and take proactive steps needed to capture the time, cost and accuracy benefits of intelligent automation.
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