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The Supply Chain Management Blog covers the latest in SCM strategy, technology, and innovation.

Modernizing Manufacturing for the Digital Age

Julia Vagdati
Product Marketing Director

The digital age is changing industry dynamics at speeds and in ways unforeseen just a short time ago. New business models are evolving and new competitors are emerging forcing companies to move faster and be more innovative in order to compete effectively.

Some of the significant challenges include:

  • Inability to pivot from an inside-out supply-driven model (focused mainly on cost and efficiency of supply) to an outside-in demand-driven operating business model (starting with the customer)
  • Inability to support new digital business models such as subscription or automated service
  • Complex legacy systems are constraining companies’ ability to adapt quickly to new requirements and opportunities
  • Customized systems and tools lock companies into current out of date business processes
  • Inability to take full advantage of rapid advances in sensor-based and IoT technologies to increase revenue and improve operations
  • Getting the right products and services to market faster than the competition

Today’s customers seek more responsiveness from brands and manufacturers, and the battle for the customer requires manufacturers to move closer to the customer.  Tying manufacturing directly to the needs of the customers and collaborating throughout the process helps to validate that companies have the right offerings and are able to quickly adapt as market needs change.

Many businesses are moving to outcome-based business models to increase the durability of their competitive edge and improve margins. Digital services and operations become a key capability to respond to, reshape and deliver an individualized customer experience. This shift demands a new mental model for the supply chain which becomes the business operating model designed from the outside-in or buyer-back perspective rather than classical inside-out.

One overarching end-to-end cloud based architecture

From a technology perspective, an overarching end-to-end cloud based architecture is required to pivot to deliver the agility to support the outside-in operating model. Organizations must master the use and integration of new technologies like IoT, digital collaboration, social, machine learning to build a dynamic digital ecosystem around customer needs, leveraging these new technologies to gain real-time insights into different areas of the business to improve decision making effectiveness. Manufacturing involves many processes and user communities, which often operate in poorly connected silos. The key is to develop a "digital thread" that ties all of these together, increasing automation, reducing latency and errors, creating new capabilities, and improving performance.

Every process step generates information that can be leveraged across the business. For example, assets in the field can be monitored for issues that may impact maintenance, manufacturing, quality and customer service. By digitally connecting these threads companies can improve all aspects of the manufacturing process.

An overarching end-to-end demand driven operating model can help companies:

  • Continuously respond and adapt to meet changing market and customer demand with a flexible and agile operating system.
  • Evolve to be a market disrupter by implementing Industry 4.0 strategies with IoT, BI and big data analytics to gain real-time insights into different areas of the business for improved decision making.
  • Support end-to-end innovation and integrated business planning processes that enable business growth, for example optimizing new product launches and faster time to value in M & A.
  • Reduce the IT architecture complexity and costs of ownership (data, infrastructure, integration, multi-vendor , multi-technology) that is constraining the agility of companies to market and respond to customers.
  • Integrates real-time machine data and factory performance data into the discrete manufacturing decision making process

Oracle provides the most complete and integrated cloud platform for manufacturers. Oracle Supply Chain Management Cloud is the only platform built from the ground up, that enables you to digitally connect all of your business processes in one cloud-based architecture.  Oracle Manufacturing Cloud, part of Oracle’s Supply Chain Management Cloud solution, can help you transform your end to end business, providing you with the agility, visibility, analytics and execution capabilities to improve customer responsiveness, drive innovation and growth and reduce costs.

To learn more download our ebook.

Julia Vagdati is SCM product marketing manager at Oracle. Connect with her on LinkedIn. 

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