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An Oracle blog about Internet Of Things

  • February 27, 2020

Investing in the Best Digital Manufacturing Technology for Finance

Deirdre Houchen
Senior Marketing Director, ERP/EPM, Oracle
This is a syndicated post, view the original post here

The Digital Future of Manufacturing is already here. The ability to use data to optimise operations, wirelessly connect production-line machinery, and automate different processes is getting ever closer to a working reality. Agility, it seems, is needed to keep pace. But ROI is needed to stay afloat. 

In fact, according to research 75% of large manufacturers are set to incorporate Internet of Things (IoT) and analytics-based situational awareness in their operations by the end of this year. 

But, as positive as this appears, it still sounds like a tall order. Even though the technology might be available, it doesn’t necessarily mean that manufacturers are broadly embracing digital transformation. 

So what are the opportunities available to manufacturers? What does successful digital manufacturing need? What’s stopping CFOs from investing in the necessary infrastructure? 

To advance their businesses, finance departments need to realise the long term impact of the technology investments they make today; ensuring that they can keep pace with both their immediate competition and shifting customer needs.

Let’s take a closer look at some of the major strategic and practical concerns of doing this.

Understanding the opportunities on offer

There comes a point when a manufacturing business – or any kind of business – suddenly realises the full benefit of having transitioned to being a ‘digital first’ operation: that point where suddenly it seems that all systems are running smoothly. 

For example, consider autonomous robotics. From a productivity point of view, the benefits are immediately tangible – seeing production line machines completing highly complex processes, making independent decisions, and operating with minimal human intervention.

Similarly, having several factories filled with Industrial IoT devices; all working in different environments but being able to adjust their operating speed according to peripheral conditions – and broadcasting that data back to technicians – is something that is already happening in many manufacturing facilities. 

But what does this actually mean – in the cold, hard, light of day? From the outside looking in, the reality of being able to reach this level of operational excellence can seem like a huge time and money cost. And one that’s often more ‘nice-to-have’ rather than operationally imperative.

This is why it’s so important that companies have a clear business strategy in place – not solely to justify the need for a digital overhaul; but to benchmark what successful implementation actually looks like in the short, medium, and long term.

Setting digital manufacturing’s wheels in motion

Reading between the lines in any description of digital manufacturing – whether we’re talking about the use of Big Data analytics, AI-powered algorithms, machine learning, or smart devices – one critical infrastructural component underpins pretty much everything: cloud technology.

Simply put, there’s no other way of providing the scale, speed, security, or agility needed to run any digitally-driven operation. But more than these benefits alone, the true key to cloud computing’s effectiveness is the synthesis of data – being able to draw operational insights from across an entire organisation – before being able to action it on-demand, and offer additional services like small batch manufacturing or one-off customisation.

In this way, tasks can be categorised into stages of completion, all components used in the build can be recorded, and manufacturers have live access to inventory, orders, warehouse, and supply-chain information – on demand.

However, being able to interpret and act upon this level of granular information is a challenge in itself. But again, automation can quickly adapt and optimise processes without the need for human intervention. As long as it’s configured correctly in the first place, that is. And getting to that point presents its own set of challenges.

Understanding the impact of inactivity

Where manufacturing’s concerned, incorporating sophisticated software into what has traditionally been a hardware- or machinery-driven industry requires commitment and buy-in – from the top down.

While it seems CFOs are becoming more involved in technology investment; there’s an increasingly urgent need for all C-Suite executives – from the CEO to the CIO – within manufacturing businesses to truly understand the cost of implementation.

As logical as this might sound, sometimes the rationale for an innovation-led initiative is the fear of obsolescence, rather than the need to change what already appears to be working. 

This is why it’s critical to understand how cloud technologies such as ERP (enterprise resource planning) can quickly demonstrate the value and impact of innovation. With access to all of the financial – from material expenditure, to manpower costs – and operational information from different departments pooled together, CFOs can determine the KPIs needed and how best to reach them. 

Developing digitally to ensure longevity

On a broader scale, businesses of all kinds are committed to the idea of digital transformation – from marketing agencies to financial services specialists. The potential for technology to make a resoundingly positive impact in manufacturing is just as clear cut.

While any overriding hesitance may stem from the cost of outlay, productivity downtime, and time taken to train staff and get up to speed; the bigger concern should be whether any temporary inconvenience can be offset by the prospect of shutting down operations entirely in a few years’ time. 

Share best practices with finance leaders at Modern Finance Experience at MBX in Chicago, March 23-26, 2020.

Come meet and network with your peers in the Manufacturing Industry Forum on Thursday, March 26 from 9:00–11:00 a.m. Hear Oracle’s commitment to manufacturing and how companies are benefitting from Oracle Cloud solutions.

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