It’s not an easy time to be a manufacturer. Everything from global supply chain issues to inflation to factory worker shortages to geopolitical uncertainty is causing the industry to feel the financial pinch.
In response, leading manufacturing executives are prioritising cost reduction and factory floor efficiency to avoid operational disruptions that impact Overall Equipment Effectiveness (OEE) on the factory floor. These disruptions are costly. They can slow or stop production and then ripple across the value chain, threatening supplier relationships, customer loyalty, and financial stability.
Manufacturers are ramping up investments to automate their plants and resources, but they still face fundamental challenges. Operational complexity and siloed data prevent optimised performance. A reliance on no standardised and error-prone manual processes for factory workers leads to down-time and inefficiency. Further, high labour costs and a retiring workforce are widening the skills gap.
In early 2023, ServiceNow and Dynata surveyed more than 1,900 manufacturing executives and business leaders. Incredibly, 89% report that a lack of digitisation for factory processes has a medium to high impact on OEE. At the same time, while 82% of respondents acknowledge digitally enabling factory floor workers is a high priority, only 37% say they’ve made significant progress on this transformation.
It’s clear that even though manufacturers understand the impact of digital transformation on their operations, there’s still much to do. And beyond simply improving processes for efficiency’s sake, digital transformation initiatives also offer concrete competitive advantages.
There will always be a need to prioritise the basic needs of the factory floor, which keeps equipment operational, timelines on track, and factory workers productive. However, if companies ignore the opportunity to both digitally transform their factory processes and digitally empower their people, they may also place their businesses at risk.
Digitally empowering the workforce
The gap between manufacturers that have made significant progress and those that recognise the need for digital transformation on the factory floor is wide. So, how can these companies close that gap?
There are three ways that manufacturers can build a connected workforce to increase factory floor agility and boost productivity. All three help companies create a manufacturing organisation that is productive, profitable, secure, and resilient.
First, connect factory workers to the digital factory so they have access to information they need to be productive. That means eliminating silos and consolidating data from enterprise resource planning, manufacturing execution, quality management, customer service, and customer relationship management systems into one platform so everyone can see the same things.
Manual, paper-driven processes have no place in the modern factory. Using mobile devices and automation, workers can replace their reliance on nonstandardised processes and institutional knowledge with real-time data and standardised ways of working.
Additionally, manufacturers can unlock the full potential of their IoT technologies to identify and proactively resolve issues related to preventive maintenance and find ways to automate incident management across teams.
Second, increase operational visibility and drive factory wide efficiency by establishing digital connections between systems, processes, and teams so the entire company – from C-suite to factory floor – can see and act on the same data in their decision-making. Data can be used to identify trends, scale efficiencies, and eliminate common or recurring issues. Knowledge databases can disseminate information widely across all operations.
Technologies such as AI and machine learning can accelerate operational efficiencies by quickly analysing patterns and providing steps employees can follow to resolve issues on their own. AI-driven automation ensures consistency and repeatability across the factory floor. Continuous improvement becomes the norm, not a project.
It’s also important to note that even as AI enhances what factory workers can do, it’s up to employers to help their workers feel comfortable using AI as a tool to help them work smarter – and not view it as a threat. In addition, AI skills can be a differentiator for future job opportunities.
The survey revealed that lack of know-how, skills, and talent was the biggest reported barrier to improving factory floor processes. Therefore, third, embrace new digital tools to draw in new talent and better use existing talent. An unprecedented labour shortage and rising labour costs are forcing companies to adopt new digital strategies to attract, retain, and upskill talent.
Workers – especially younger ones – value streamlined, digitised work environments that contain the tools and resources they need to collaborate and resolve issues. Factory workers can more easily pivot between roles on the floor as automation handles much of the repetitive work. This imbues workers with a sense of ownership, fosters greater loyalty, and leads to lower attrition.
Getting value from investments
Manufacturing companies have invested heavily in automating their machinery, including using the data from IoT sensors to drive efficiency. But companies that don’t fully leverage technology and continue to rely on paper-based, manual processes are going to struggle to get the maximum value they can from these investments.
Those that invest in connected factory workers will be better placed not only to manage the impacts of the present uncertainty, but also to remain agile in the face of future challenges. Simply put, investing in people in addition to tech will ensure the business remains productive and competitive no matter what.
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About the author
Peter McDonnell, Chief Transformation Officer, ServiceNow
Peter brings more than 20 years’ experience in global IT as a resilient and outcomes-focused leader. A chief transformation officer, ServiceNow, he has partnered with customers to help them realise end-to-end transformation and unlock business value using the Now platform. During Peter’s career, he has held leadership positions at Qantas, Fujitsu, and APA Group in Australia.
