The supply-chain crisis that arose in 2020 continues, and is unlikely to ease by the end of this year, according to experts. Recently, the International Monetary Fund pointed to supply-chain issues as a major factor in its decision to downgrade its global economic growth forecast for 2022.
In these conditions, it’s important for manufacturers to focus on supply-chain disruptions and become more agile to keep pace with market demands and grow their business. To do so, they must harness the power of data and leverage digital tools to shift towards agility and smooth supply-chain snags. The risks of “not connecting the dots” through available data can be significant: A lack of supply-chain integration could stall smart factory initiatives for 3 in 5 manufacturers by 2025, according to Gartner.
In the next several years, digital tools will increasingly help manufacturers streamline their supply chain and accelerate production. Here’s how:
Future-proof manufacturing
The current supply-chain crisis’s impact will still be felt years from now, even after component inventories are replenished and manufacturing rates increase. Particularly within the past several years, and as a result of the ongoing crisis, manufacturers have spent much of their energy triaging their processes – solving short-term issues as they happen. But those manufacturers are missing the bigger picture, which could lead to even greater problems for manufacturing processes down the road.
How does this get solved? Turning to digitization and harnessing more data can help manufacturers move from thinking about tomorrow to strategizing three-to-five years into the future.
Consider the implications of resourcing from multiple or different suppliers. When solving for supply-chain issues, coordinating multiple suppliers from multiple places around the world increases the complexity of a manufacturing process exponentially.
For example, three new suppliers can complicate one process by a factor of nine. For a product manager, tracking this gets tricky without better planning and better data to understand what is happening across all the process variables. Simple spreadsheet and documentation tools are not enough for managers to keep up the pace.
Making necessary changes to more digital processes allows data to enter the conversation and build better planning into the system. Product managers can dedicate more time to managing complex processes, interpreting the data, and forecasting changes and trends three to five years ahead of time – rather than tabulating data manually and viewing short-range product development.
More data brings more opportunity
For sales-focused organizations, digitization, and data-driven processes pay off holistically throughout the business, beyond solving near-term supply-chain snags. According to a McKinsey survey, companies that are using data-driven B2B sales-growth engines report above-market growth and EBITDA increases in the range of 15 to 25%. Digitization empowers firms to improve efficiency, increase agility, and lower costs while meeting increasingly challenging consumer expectations.
In the manufacturing industry, better data and business insights open new windows of opportunity for growth. Product managers can move beyond meeting the needs of one customer with one product. Instead, they can take advantage of networked datapoints, global suppliers, and richer consumer insights to understand greater market opportunities for future products and solutions that customers may not yet even know they need.
Applying digital investments to drive next-level business insights requires a streamlined, single point of truth to drive data visualizations and analysis. However, one of the greatest data challenges is learning to trust the data and be confident that it will point to future opportunities – or illuminate potential problems in the manufacturing process.
Keep up with the pace of change
Here are three steps for manufacturers working to keep up with fast-paced market change and fully leverage digital investments:
1. Collect data. There are endless permutations and combinations of data layers that, when put together, can result in a new opportunity for a manufacturer. The first step is to invest in the process of collecting more data and engaging the right tools to centralize disparate data sets to understand insights.
Bring in data from prospective customers, existing customers, current competitors, or potential competitors in a new market and look for ways to understand better your market of products, and related markets too.
2. Find the opportunity. With enough data, manufacturers can analyze and visualize the information that will point to a new, scalable market opportunity. Today, most manufacturers use legacy tools to analyze and process data manually, but better solutions exist and are extremely effective at handling loads of structured and unstructured data.
Market leaders are just beginning to master this step and take full advantage of the data tools that have emerged during the last decade.
3. Build the roadmap. Whether a solution is built for customers or to simplify issues on the supply-chain side, ultimately, manufacturers must create a roadmap of steps to execute on a new opportunity. Ideally, with data-driven insights new product roadmaps are flexible and agile, allowing production steps to happen simultaneously to bring a product to market faster than ever before.
Manufacturers that strive to understand their customers better and standardize this three-step process using higher-quality data management systems will have an easier time keeping pace with change while growing revenues. Supply-chain issues or changes to the market shouldn’t hold back manufacturers from innovating or keep them stuck solving short-term problems. Learn to trust the data.
Maziar Adl is co-founder and chief technology officer of Gocious, a product planning software for manufacturers that promotes product innovation for auto/mobility, industrial equipment, and high-tech industries.