Business Process Automation is Lagging in Manufacturing. Here's How to Improve It.
Manufacturing has historically been ahead of the curve with automation — at least in terms of production. But when it comes to business process automation, the industry has generally been slower to adapt.
Recent research from Deloitte asserts that "the Fourth Industrial Revolution was born in the factory." The combination of artificial intelligence (AI), the Internet of Things (IoT) and automation is transforming production lines, making for smarter, more efficient supply chains around the world. Digital technologies have also leveled the playing field. Breakthroughs in 3-D printing, for example, enable small businesses to create prototypes and partner with manufacturers who can help them mass produce their products.
Yet many manufacturing companies are behind the curve when it comes to business process automation. Why?
A Lack of Perspective
In their report, "Distinctive Traits of Digital Front-Runners in Manufacturing," Deloitte researchers noted two key traits common to manufacturing companies that were successfully digitizing their processes. Those were, "a high understanding of the business value of new technology solutions and adoption readiness for those new technologies." Only 26 percent of companies surveyed were considered "front-runners" that understood the value of new technologies and were actively integrating a tech-centric approach into their organizations. Most of the decision-makers surveyed were either aware of the value of business process automation, but hadn't made significant steps toward it, or they hadn't yet bought into the concept.
The latter group in particular is at a growing disadvantage. Deloitte reported that not only are front-runners more confident in their abilities to generate strong financial returns, they're also better equipped to meet evolving tax obligations, deepen their customer engagement and adapt to the inevitable shifts that come with constantly advancing technologies. Companies that embrace automation are already seeing significant results.
One aircraft manufacturer reported that it saved more than 850 hours in manpower per day and reduced its average handle time for purchase orders by 75 percent through robotic process automation (RPA). A European belt drive manufacturer said it boosted its time to market for new products by 75 percent through automation, and eased auditing workflows through the creation of standard digital processes. Manufacturers that fail to leverage automation in both their production and business processes stand to fall woefully behind.
There was one outlook that all the executives surveyed by Deloitte shared. They agreed that any new technology they might invest in must be able to integrate with their current systems. Small businesses especially must be conscientious about where they funnel their technology budgets. Not having a digital-centric philosophy severely inhibits their future growth prospects, but investing in the wrong platforms can hurt them badly as well.
Find the Right Partners
Implementing new technologies is challenging, especially when it comes to business process automation. When everyone in your organization is used to doing things a particular way, there's a certain amount of preparation and training necessary to ensure a successful transition. To minimize the obstacles you'll face in the process, make sure you choose your vendor partners carefully. Schedule multiple meetings and demos to make sure you understand their platforms and they know your needs. It's essential that you select tools that match up to your specific priorities, such as monitoring production via sensors or creating more transparent and streamlined records, thereby minimizing the risk of costly errors.
Include key stakeholders in those conversations. If automating will affect your billing team, for example, then speak with them. Find out what their pain points are and which tasks they have to do repeatedly that distract from more urgent priorities. Ask them about the software they're currently using. What do they like about it? What don't they like? Do a deep dive into each department's workflows before selecting an automation platform.
Once you've identified some viable options, talk with department heads to get their input. You want the people who will be using the software to not only be comfortable with the change, but excited about it as well. If they believe a tool will make their lives easier, they'll be that much more motivated to master it.
Funding the Transition
Switching to automated software platforms might sound like a costly undertaking, and it can be. Not all companies are able to invest millions of dollars in their own automation revolution, but that doesn't mean there's no middle ground.
If you're facing budget constraints, examine your processes and look for easily automated areas. Chances are your administrative tasks are strong candidates for automation, and your invoicing and accounting may be bolstered as well. Robotic process automation offers many potential solutions for manufacturers, including vendor management and purchase order workflows. An automated system could track inventory levels in real-time to let key personnel know when stocks are low. These platforms may even be able to order additional supplies automatically, lowering the risk of shortages and delays. Such a platform would boost efficiency while also eliminating downtime and ensuring on-time order fulfillment. You may be able to integrate an automation system that manages vendor communications, which speeds up response and turnaround times and removes opportunities for human lapses and errors.
Examine areas where employees are bogged down by repeated tasks that are important and low-skill. Look for solutions that offload those duties and allow workers to focus on more complex, value-driving initiatives. You're likely to see an increase in productivity, which means you'll be getting a better return on your employee investments.
Integrated in Mindset and Function
The key to a successful shift toward business process automation is seeing each platform as part of the greater whole. These tools should complement and enhance existing workflows, not create silos and frustration. Once you see where automation software is needed, you can identify partners who meet those demands without unduly burdening you and your team. Technology should be used to improve your business outcomes and strengthen your client and customer relationships, and when you find the right solutions, you begin seeing a new level of results.
The opinions expressed and information contained in this article are given in good faith, may be subject to change without notice, and are as of the date issued. The accuracy and completeness of this information is not guaranteed. Since each client's situation is unique please review your specific objectives and needs with your advisor and/or tax planning professional.
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