Three covert roadblocks to achieving agility in manufacturing

What is agility in manufacturing, and why is it worth aiming for?

Agility is a buzzword that's been thrown around extensively in recent years. There's no argument that it's a target worth aiming for in manufacturing, but what does it really mean on the ground?

Take the experience of a global food manufacturer needing to develop a completely new channel (almost overnight), to get their products to consumers during Covid. Achieving this outcome using the systems and IT they'd previously relied on would have slowed the process down considerably (12 - 18 months) leaving them vulnerable to significant customer loss. Younger companies and start-ups had already built direct-to-customer channels into their business model and were ready to capitalize on Covid. How would they make the jump and stay afloat? This is where agility comes in.

Covid and recent global disruptions have provided useful examples of why agility is so valuable. We've seen businesses needing to change how they go to market (delivering directly to consumers when they previously went through a larger distributor) and companies needing to diversify their supply chain so raw materials aren't sourced predominately from one country. These massive shifts are accompanied by associated IT architecture overhauls. This is where change becomes slow and messy to implement for an ill-prepared business.

What are the consequences for businesses who can’t respond with agility?

Depending on the organization, consequences could be fast or slow. But regardless, the end result will likely be the same. At best, they will lose significant market share. At worst, they will cease to exist entirely.

When thinking about agility, there are a few significant covert roadblocks that can highlight where processes are not agile, or not moving toward agility. Think of them as the symptoms of an underlying illness; you're grateful when they can be used to diagnose a problem that would otherwise fester quietly. Keep reading to learn more.

Complex and cumbersome reporting methods and technology

The current reality in manufacturing is that businesses are not going to source all of their software from one vendor and put it into one database. They are going to be sourcing multiple products and need to align them in a way that makes reporting accurate and simplistic.

In order to reap the benefits from data, it needs high integrity to accurately and simplistically provide a reflection of what’s going on in your business. Manufacturers often have multiple systems in place (multiple databases, data structures, etc.) which make it challenging to define something simple like what a customer is. The problem they're facing in this scenario is complex reporting. Hidden challenges and headaches teem from this situation, the very scourge of agility.

The 'single source of truth' architecture that many companies made significant investment in, is an end game that isn't eventuating. As new technologies expand and more solutions come to market, it's fair to say that placing all your eggs in a single-source architecture will hold businesses back and quickly become a barrier to agility.

Facing the fact that software is coming from different vendors, and embracing systems that can deal with that reality, is the most straightforward route to agility now. This leads into another issue relating to data management.

Using spreadsheets to manage data

When this type of scenario starts happening in a business, it's indicative of complex data management processes. Spreadsheets are the fallback of inefficient systems. It's not uncommon when businesses are scrambling to pull data together and get the answers they need, to see companies downloading insights from multiple systems and hoping to synthesize them using spreadsheets.

This might have been the reality for old enterprise resource planning (ERP) constructs, but it's not going to cut it in relation to the software diversity currently available. IT architecture should be able to synthesize data from diverse inputs and execute transactions across different systems without people having to manually create spreadsheets. These are the capabilities we're seeing with Composable ERP. The final roadblock we’re highlighting relates to the complexities that arise when manufacturers operate in multiple countries.

Difficulty satisfying global business requirements

Performing globally in manufacturing isn't simply a matter of scaling and replicating processes across different locations. Government regulations, taxes, insurance (even customs and ways of doing business in general), can be significantly different from country to country.

Some countries can be notoriously difficult to operate in. If you don't have a sense of what your business is getting into or confidence that your systems can support location expansion, you'll end up creating costly mistakes while slowing down your ability to go to market in new locations. These variations add substantial complexity to processes and this is on top of the software diversity mentioned above.

You must have systems that can adapt to these alterations and automate wherever possible.

So how can businesses overcome these problems?

The shifts we're seeing in software architecture are putting more power into the hands of end business users. Better tools are giving people what they need to adapt systems to their unique requirements instead of translating inputs to fit with structures and processes based on old technology.

If we look specifically at composable ERP architecture, there is significantly less reliance on programmers. This is where the shift in power comes from. There's no doubt that this radical change can appear threatening to businesses that have built (and invested heavily into) IT departments that are programmer heavy and control everything from an architecture perspective. To see power filtering into different parts of the business, and still trust that the job will be done to the same standard, can be scary. But this is exactly what these new technologies are offering. The challenge is as much a shift in mindset as it is a shift in architecture and processes. This is adaptability in action.

Speed is another word for agility, and is the essence of what businesses need to understand regarding their processes and systems

If your data and reporting is a mess and you need to make fast decisions, then your choice is either to apply the necessary speed and probably get the wrong answers, or clean up the data and be beaten to the finish line regarding market outcomes and responsiveness.

The only answer here is to not let it get to that point, or at least recognize if you’re on that trajectory and make swift decisions to avoid full catastrophe.

Coming back to the customer mentioned at the start of this article, the major shift in their demand channel required a swift response which they were able to deliver. This company achieved in three months what would have taken 12 to 18 months with their traditional ERP system. They roughly captured 1.5 million dollars in revenue the first day they brought this new system to market.

Agility will be a consistent feature of manufacturing moving forward

Shifts in demand and global instability will only continue, and variables impacting manufacturing will continue to morph and change. Nurturing an attitude of openness toward agility within operating systems will support businesses to respond fluidly when the early warning signs suggest a change in tactics.

The solutions are now much closer to the people who are having the real problems. This is where we're seeing businesses overcome complexities and building genuine agility into their systems.