Chapter 3 Real Digital Transformation - Digital transformation is not just about changing technology
REAL DIGITAL TRANSFORMATION SECTION 3
Section 3
REAL DIGITAL TRANSFORMATION
Digital transformation is not just about changing technology – it’s about driving process changes. Real digital transformation for manufacturing businesses is not just about changing technology, it’s about evolving business processes to optimise performance and achieve business objectives.
re-engineer their processes to maximise ROI. Technology can enable more efficient processes, but only if businesses re-think and redesign their processes to leverage technology’s capabilities. For example, implementing an ERP system may help manage inventory levels, but businesses are advised to streamline their inventory processes to take full advantage of the system’s capabilities. Technology is evolving at an ever-increasing pace, and businesses need to be adaptable to stay ahead of the curve. By redesigning processes to be more flexible and adaptable, manufacturers can embrace new technologies and adapt to changing market conditions more quickly. One way to add greater agility and resilience into a business is through greater collaboration across departments and locations. Digital technologies enable this but only if processes are designed to encourage collaboration. By re-engineering processes to promote cross-functional communication and collaboration, businesses can enhance innovation, reduce errors, and improve customer satisfaction. Overall, real digital transformation for manufacturing businesses is about more than just changing technology. It requires re-thinking and re-engineering business processes to maximise ROI, enhance efficiency and productivity, foster adaptability, promote collaboration, and create a competitive advantage. No technology project is a success in isolation. Only by utilising technology to drive
While technology is an essential component of digital transformation, it is only one part of the equation. Many reports on digital transformation and “Industry 4.0” focus on technologies such as digital twins, AI and machine learning. They discuss the need for a ‘big bang’ business shift towards cloud manufacturing, mass customisation, or lights out digital factories. All are valid, but these are longer term strategies that can be costly and disruptive in the short term. Manufacturers can be just as successful utilising existing technology stacks to deliver continual process improvement, improving productivity, enhancing productivity and boosting overall business performance. This is particularly true of businesses involved in discrete manufacturing. Mid-sized £30+ million firms, and indeed much larger companies, must get the most from their incumbent IT and operational technology, in order to progress up the “technology stack”, and Technology Readiness Levels (TRL)s, to a point where the above interventions will help secure more value. Start with measurable results Long-term, widespread digital transformation can be expensive, and to justify the investment, businesses need to see measurable results. Simply replacing outdated technology with newer systems may not deliver the desired outcomes. Instead, businesses need to identify the specific pain points in their operations and
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It is about optimising what you have, to enable your business to make process and efficiency improvements that reap long-term rewards. The effect of digital transformation on the manufacturing industry The UK’s productivity has been slow since the 2008 financial crisis. According to ONS (Office for National Statistics) figures, between 1974 and 2008, it grew at 2.3% per year, but only 0.5% between 2008 and 2020. Compared to other countries, the UK’s productivity growth has been worse. From 2008 to 2019, the UK’s productivity only grew by 0.27%, while the United States grew at 1% and France and Germany grew at 0.7%. In 2020, the productivity gap between the UK and the rest of the G7 nations widened further, with the UK ranking 16.3% below the average output per hour for the other members of the group. This trend was attributed to various factors such as a lack of investment in research and development, poor management practices, breakdowns in communication and a shortage of skilled workers. This slowdown in productivity is not just a UK problem but an issue for most advanced economies. However, the UK has underperformed compared to other countries. Operated correctly, tools such as ERP and other technologies can go a long way to plugging this gap and improving efficiency within manufacturing.
process change, can a manufacturing enterprise both improve productivity and heighten overall efficiency. NexSys specialises in this sweet spot between effective technology, and efficient processes. Improving efficiency at every stage By implementing the right ERP+ technology stack, manufacturing businesses can attain efficiency gains, enhanced productivity, and increased agility. Be it automation of processes to gain better insights into production performance and losses or adoption of preventative maintenance techniques to eliminate bottlenecks and decrease downtime, every aspect of the manufacturing chain can be optimised with a positive impact on the company’s profitability. The NexSys approach is consultative and equally about process improvement as it is about technology customisation. It starts with our consultants gaining a thorough understanding of your business operations and the areas where SYSPRO and other technologies can provide the most significant value. The success of our approach depends not only on the technology itself but also on the business processes and workflows that are built around it. This may require re-engineering for some processes to align with our technology’s capabilities and training employees to use our systems effectively. As such, it requires continuous evaluation and refinement of the system to ensure it is meeting the evolving needs of your business. Our accessible technology stack ensures that manufacturers are in control at every stage of the supply chain; whether that is raw materials procurement, inventory management, production, product lifecycle, or even carbon tracking across distribution. It is focused around extracting more useful data from your PLCs (programmable logic controllers) that you already have but may not see and, by presenting that data in a clear, intelligible way, helping to make decisions based on that data.
By implementing the right ERP+ technology stack, manufacturing businesses can attain efficiency gains, enhanced productivity, and increased agility.
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Let’s apply some practical maths knowing some real numbers and putting a very conservative value on the effect of digital tools like ERP and MES.
244,000
208,000
£340bn
manufacturing companies in the UK (2021, Statista figures)
remove companies <£3m and >500 employees - e.g. approx. 15% total
85% of the value of production in 2021 which was $400.8bn
The effect of digital tools like ERP and MES.
A 10% increase in output through efficiency equates to an additional £34bn a year.
Even a very conservative increase in productivity of just 3% from using this technology properly would add £10bn to the total value of production in manufacturing. And this does not account for the increase if all 244,000 companies received a mere 3% uplift.
£10.2bn
would equate to a conservative increase in productivity of 3%
Improving communication and collaboration
end up with a collection of disconnected technologies that may automate specific areas of the supply chain but fail to communicate or integrate with each other for complete automation. The result is often decreased productivity and a more severe lack of efficiency. DataSwitch provides a solution to this problem by enabling businesses to integrate and communicate various business systems through a single source. By setting up unique workflows, DataSwitch bridges the integration gap that many manufacturing businesses encounter, empowering employees to automate without requiring deep development expertise. This integration of disparate systems into a cohesive
One of the biggest barriers holding manufacturing businesses back from reaching their true digitalisation potential, is the integration and communication between different business systems, a problem which DataSwitch was developed to solve. Although many manufacturing businesses are adept at recognising the need for new systems and implementing them, they often do so reactively, rather than taking a strategic approach to their overall technology infrastructure. Consequently, these businesses
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for preventative maintenance, MOM can both improve performance and minimise downtime.
whole allows for complete automation and provides manufacturing businesses with a more comprehensive view of their operations, resulting in greater efficiency and cost savings. One way of achieving this is by leveraging the capabilities of the Internet of Things (IoT) to integrate front-office, back-office, production management systems and provide manufacturing businesses with a more efficient and effective way to manage, utilise and analyse their data. With DataSwitch, manufacturers can automate various processes such as Advanced Shipping Notices, order confirmation with logistics companies, creation of Bills of Materials, and issuance of works orders to machinery on the shop floor. By integrating an ERP solution such as SYSPRO with a CAD solution, DataSwitch streamlines processes and ensures that machinery operates at its full potential. This allows manufacturing businesses to achieve greater productivity and efficiency, while reducing costs and minimising errors. MOM integration Manufacturing businesses have always tried to eliminate waste by making process adjustments such as 5S, lean manufacturing, and Six Sigma. However, unplanned downtime still occurs, making it challenging to maintain productivity. SYSPRO’s Manufacturing Operations Management (MOM) solution provides a real- time link between the shop floor, ERP system, and management teams. MOM improves visibility by tracking employee and machine performance, allowing businesses to plan more accurately and minimise loss. MOM also captures data to identify patterns and monitor factory performance, integrating with SYSPRO to increase productivity and reduce waste. With automated alerts for machine failure and the ability to customise
The platform enables manufacturers to connect their production systems, automate workflows, and gain real-time insights into their operations. DataSwitch integration can also be leveraged here to further improve these efficiency gains. The ability to integrate DataSwitch with various data sources, such as PLCs, SCADA and MES, enables the capture of real-time data from production processes. This data can subsequently be analysed to provide insights into production performance, quality and efficiency. An example is when DataSwitch is used to as a bridge between production machines (using sensors) and the MES, enabling the data to be transmitted seamlessly from one system to the other. The MES then processes this data and presents it in a visual format on a screen, allowing users to analyse it for trends and patterns. This data can be used to make informed decisions and optimise manufacturing processes to improve efficiency and productivity.
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Digitalising older machines
Overcoming the skills shortage
NexSys is collaborating with hardware partners to attach sensors to older machines that lack the ability to provide specific data or cannot be upgraded easily due to high costs. These sensors capture crucial data, such as the piece count rate and machine utilisation. However, this data is typically isolated at the sensor level, requiring an operator to read it manually, and it is therefore inaccessible to the ERP system. To solve this problem, DataSwitch facilitates the translation of data between the sensor and ERP levels in a cost-effective and repeatable manner. This allows the data to be instantly available in the ERP system, Manufacturing Execution System (MES), and warehouse management system. As a result, manufacturers can efficiently monitor and track material levels, and schedule the right people on the shift. DataSwitch’s automated integration reduces the need for manual data extraction, making the process more efficient and less labour-intensive.
Businesses may face challenges with digitalisation due to a lack of IT skills among their employees. Modern digital tools often require technical expertise, making it difficult for businesses without the necessary skills to implement and maintain them. SYSPRO helps alleviate this problem. It’s user-friendly interface and low-code platform allows non-IT personnel to easily tailor the system to match specific industry and business data capture needs without exposing the complexity to employees. Additionally, SYSPRO can be configured to alert operators in case of transaction failure or success. Marrying the easy power-tailoring capabilities of SYSPRO with DataSwitch also eliminates the need for costly in-house solutions, saving businesses from the expense of bespoke development. Implementing integrations is much faster with DataSwitch compared to developing them in-house or hiring external parties. Within days or weeks, DataSwitch can be integrated seamlessly into existing systems, significantly reducing the time to value and enabling businesses to reap the benefits of integration sooner. One of the biggest barriers holding manufacturing businesses back from reaching their true digitalisation potential, is the integration and communication between different business systems, a problem which DataSwitch was developed to solve.
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