3 ways manufacturers can create a platform for future growth

Maturing technologies, human experiences and climate change are crucial to future proofing your manufacturing business. Prasad Satyavolu, chief digital officer, manufacturing & logistics at Cognizant, explains why.

Due to a combination of economic instability and rapid evolution in consumer demand, global companies with an integrated supply chain need to be prepared to handle a range of fresh challenges. As a result, the development of new manufacturing ecosystems, with the right set of technologies, people and culture to make them flexible and agile has become increasingly important. A vital part of this will be human experience in order to design, develop and implement effective change strategies.

To lay the foundation for strong growth in a challenging climate, manufacturers should be focusing on three key areas.

Scale the company with the right digital tools

To create an ecosystem that will stand the test of time, scaling up in manufacturing is - and will continue to be - a critical area that involves several technological aspects. According to a survey by PwC, 72 per cent of manufacturing companies are dramatically increasing the speed of their digital transformation and expect to be able to be ranked as ‘digitally advanced’ by 2020, compared with just 33 per cent in 2018. These companies are committing almost 907 billion dollars per year, about five per cent of revenues, toward greater connectivity and smarter factories.

In line with this, there should be large-scale adoption of ‘maturing’ technologies, like 3D printing, blockchain and drones. The latter, for example, will be increasingly used not only for distribution but also to automate internal processes, for example, carrying materials inside facilities in a matter of minutes, increasing productivity.

Unfortunately, many businesses are now failing to take advantage of innovation, mainly because of a lack of a business model that allows a seamless implementation across multiple locations. Companies would be wise to review their current investment in automating processes to establish if they are working as efficiently as they could be with the aim of increasing productivity.

Find a balance between technology and human experience

The second focus area for manufacturers in 2019 will be improving the human experience, not only customer experience (CX) but also employee & partner experience. Companies will, therefore, need to invest heavily in people development and training in 2019.

All industries increasingly realise that it is important to create a strategy and culture that supports digital transformation that incorporates skill and career development.

As for experience, we expect to see many large-scale initiatives with a focus on integrating Industrial Internet of Things (IIoT) programmes and increased application of Artificial Intelligence and Machine Learning to create intelligent processes and improve products and services. Closed loop systems will start to emerge as the norm for creative experience design effectively merging AI and analytics with voice, video and hepatic front ends besides device screens.

Understand the bigger sustainability picture

Last but not least, every company needs to beware of climate change. Companies are struggling with the need to decrease emissions through lower energy consumption. For example, the European Commission has set ambitious targets to lower carbon emissions in the region, as much as 40 per cent less by 2030.

Many manufacturers may start using IIoT systems more broadly to measure and optimise energy consumption across their operations in the region. Climate change and investments in energy efficiencies will take centre stage in 2019 and beyond. According to a global survey by Bain & Company, the share of companies that have adopted a truly transformative sustainability aspiration will nearly triple over the next five years, from nine per cent to 26 per cent.

Increasing awareness of climate change issues will lead to a boost in the production of products and services that are sustainable, such as investments in electric vehicles and alternative fuels.

For competitive advantage, manufacturers should invest in maturing technologies at scale to increase productivity, improve the human experience and make a positive contribution to climate change. Therefore, we will see manufacturers investing in new business models that enable them to innovate, transform and respond to change quickly. Only when the high demands of consumers are met in an experience-focused economy will manufacturers be able to realise growth and stay relevant this year and beyond.