The Rise of the distribu-facturer and a New Focus on the Supply Chain

TECH TRENDS FOR THE MANUFACTURING INDUSTRY

was a time like no other with the economic and political landscapes having been changed forever. But how has this rapid change impacted the global manufacturing industry in 2017? Vince Randall, vice president for Australia and New Zealand, and Frank McLoughlin, Vice President, Business Solutions Group, for Epicor Software, have identified a number of key technology trends for New Zealand manufacturers to watch in 2017.

WILL WE CONTINUE TO SEE THE EMERGENCE OF THE “DISTRIBU-FACTURER”?

One key factor behind the growth of the distribu-facturer is that the industry is moving in two mutually exclusive directions–towards customer-tailored products and streamlined manufacturing. Distribu-facturers thrive on the configure-to-order and assembleto-order environment, providing customers with tailored products, while allowing pure manufacturers to concentrate on streamlining their processes.

Distribu-facturers have reignited interest in the “batch size of one” methodology and have profited handsomely as a result. In response to growing pressure to add value for their customers, many are electing to provide services such as assembly, light manufacturing or kitting, offering components using additive manufacturing technologies and adding field services to the mix. Couple this with manufacturers expanding to field service and maintenance offerings in order to extend their value, we see manufacturers adding distributor-like offerings, and the distribufacturer is born.

The would-be distribu-facturers, focusing on meeting a range of customer needs and connecting more closely to the end customer, are discovering that customer experience is critical if diversification is to be successful. The end-user creates a pull for information – wanting regular and timely updates on the status of their order, and manufacturers need to be able to access data at different stages within the production process. This is one area where the right technology tools can have an impact, enabling widespread collaboration and visibility across the entire manufacturing value chain. Solutions like enterprise resource planning (ERP) software assist the manufacturing side of a business to connect the shop floor to the top floor operations.

The right technology solution such as modern, integrated ERP software, can: • Support a configure-to-order environment. • Promote standardisation where appropriate. • Create a centralised and shared source of information. • Track the entire process. • Reduce delays normally associated with producing bespoke orders.

THE SUPPLY CHAIN IS THE NEW FRONTIER

Cost cutting, a search for efficiencies, and efforts to increase productivity– these activities are nothing new to New Zealand manufacturers who have been refining their manufacturing processes over the years. Yet, many organisations find themselves at, or close to the end, of their ability to find efficiencies in this direction and must now focus on the supply chain to find ways to lower costs, improve responsiveness and reduce risk.

Supply chains have become more complex as manufacturers diversify and extend their reach to new markets to fend off the competition and find growth opportunities. Indeed, a multinational supply chain and distribution network can easily become uncontrollable and must be reined in by IT systems that can cope with managing a larger, more complex manufacturing business model by supporting close capital management, and an integrated just-in-time supply chain. Alongside this, manufacturers must enhance their business management systems to track and access the information which will help to manage an expanded and extended supply chain.

TECHNOLOGY TREND PREDICTIONS, IN SUMMARY:

• Cloud, the internet of things (IoT) and analytics will be key areas of technology investment for manufacturers, globally, as many move past the design and concept stage to full-on production execution and deployment of these technologies in 2017. • Cloud is quickly becoming table stakes and even the smaller manufacturers must put a cloud-readiness plan into action if they are to jump ahead of more established, but potentially less agile players. • Regarding IoT and data analysis, many manufacturers have taken a ‘wait and see’ approach. However, there are already IoT and/or cloud enabled processes which represent low-hanging fruit in a manufacturing organisation. Manufacturers should start there and start now! The effective application of Big Data and the IoT can enable insights to support operational efficiencies. •Manufacturers must rethink their relationship with millennia ls/ digitallyliterate workers andre tool their organisations to leverage technology to motivate and empower this next-generation workforce. Technology plays a vital role in reducing complexity, improving the quality of work life, and enhancing productivity. Business systems that are intuitive and accessible can assist millennials hungry for an immediate impact in the workplace. Now, more than ever, manufacturers need to enable high levels of automation for optimised productivity across the company. For this, they need access to accurate, real-time information from one, centralised source to support day to day manufacturing tasks, on-the-spot decision making and long-term strategic planning.