Manufacturing companies face hardships ahead because of the Covid-19 pandemic. The good news is that digital process automation can help, setting a new standard for the future.
Ever since the “lean” supplier craze of the 90s, the manufacturing industry has been looking for new and innovative ways to streamline its processes as much as possible. Covid has had an effect on the manufacturing industry, it’s plain to see, and while may feel like a confusing mess, automation has come to light as the new way forward for many companies.
In a recent paper, McKinsey stated that “digitizing supply-chain management improves the speed, accuracy, and flexibility of supply-risk management,” heralding it as a major opportunity for companies to “review the structural resilience” of their entire supply chain. Automation is the second industrial revolution of our age, and it has even more benefits than you would think.
If you haven’t yet heard, the global supply chain is running out of almost everything because of the pandemic. Manufacturers are scrambling to place orders in order to meet client demands, making it more and more difficult to have a reliable indicator of stock. Previous over-buying and stockpiling led to the supply chain shortage, but automation can actually help manufacturers get out of this precarious situation.
One crucial part of the manufacturing process is evaluating where to source raw materials from. Previously, manufacturers would rely on one main vendor but now because of the shortage, manufacturers are forced to expand their horizons. Automation can actually help manufacturers coordinate with multiple vendors, with a new multitier system advised by industry leaders like McKinsey, in order to have a reliable second option.
Manufacturers can automate and digitize Bills of Materials (BOMs) and invoices, generating standardized documents in seconds and sending them to vendors in just a few clicks. Then, a BPM suite like FireStart can also create transparency throughout the entire sourcing process, so manufacturers can be alerted only when they need to complete the next action (like approving an invoice). FireStart can help manufacturers source materials without the headache of long email chains, paper invoices, or lack of transparency in the process itself.
Supply chain process cycles can be long and complex. Without proper process intelligence, it’s difficult to know if a process is performing well, or if the cycle itself could be quicker and therefore more efficient. In fact, “acceleration” is now an industry watchword. To stay afloat, companies need to be quick, getting things done to a high standard. For this reason, leadership teams in the manufacturing industry have embraced technology and data.
The key to more efficient processes is human-technology integration. McKinsey identifies automation as a crucial part of this plan going forward. To accelerate a process cycle, companies can detangle their current processes to clarify the essential steps, see which tasks can be automated, assign clear department roles, and integrate all existing systems like SAP into one overarching framework to maintain a single source of truth.
An intuitive process ecosystem like FireStart does exactly this. FireStart helps take the stress off employees by automating the tasks that humans don’t have time for (like filling forms with data). Then, humans can have the time for faster decision-making and improved company innovation. The end result is a winning recipe that helps manufacturing businesses stay viable in a time of economic uncertainty.
Cutting down on time can mean errors in the traditional sense. Making a process faster in the past created a microcosm of stress on employees, causing a macro “bullwhip” effect further down the supply chain. Automation however utilizes robotic intelligence to ensure that human errors (like copying and pasting the wrong information or accidentally inputting the wrong amount) don’t cause disruptions and potential lost costs.
Automating a process like procurement automation means that manufacturing companies can request resources in minutes, generate purchase orders instantly, and integrate all the digital paperwork into one robust system so details don’t get lost. Automated procurement systems make it possible for humans to have more headspace to develop relationships with vendors, see areas for potential innovation, and strategically plan to negate potential disasters.
Future-proofing is on everyone’s lips right now as we prepare to head into 2022. Manufacturing companies want to be more cost-efficient so they can future-proof themselves against the detrimental effects of Covid-19 that continue to haunt the industry.
Automating the entire supply chain means processes are leaner and more precise. There are no more hiccups with the wrong amount of raw materials being ordered, meaning more cash in the reserve. Employees have more time to make crucial decisions rather than filtering through lengthy spreadsheets, saving costs on staff hours. Partnerships with suppliers can be strengthened, leading to more problem solving like developing improved distribution infrastructure. A more nimble, more refined supply chain means at every corner, cost-efficiency can be boosted, helping manufacturing businesses to be more resilient.
We’re sure you’ve heard about the warnings of not automating. Volatility in the manufacturing industry was a problem even before the pandemic began. What is becoming common among manufacturing businesses is a “nerve-center” or control tower approach to manage business processes so manufacturers can survive.
The hidden cost of not automating is the small costs that mount up throughout the supply chain, leading to massive potential losses. Automating business manufacturing processes is about building resilience for the future. Industry analysts like McKinsey are stressing the importance of a future supply chain built on automation in order to future-proof against further disruption.
This kind of future-proofing goes beyond automating invoices to suppliers. It’s more about having clarity over your entire supply chain, knowing where resources are being allocated and how much stock is in the reserve at all times. It’s about instantly generating Billing of Materials (BOMs) so that you can the stock you need in time to make the next shipment. With a robust iBPMS platform like FireStart, you can not only orchestrate all your processes but also create automations to alleviate the workload from existing staff, and better gain better insights with process intelligence.
Our manufacturing customer, Lenze, chose to digitize key business manufacturing processes with FireStart and as a result, have future-proofed themselves years to come. Lenze, a global innovative automation company specializing in solutions for mechanical engineering, is now 75% more resilient. They reduced their product portfolio by 50% leading to 10% more output. So far, they report better synergy between their staff and the technology they use, while also being more efficient in their daily tasks.
Intelligent process automation helped Lenze to be an example of what manufacturing companies can be. Increasing productivity by focusing on the products that matter, all the while outputting more to bring in more revenue and meet customer demands. The world may feel more uncertain than ever, but automation is how we can step forward on solid ground.