To become future-ready, manufacturers need to focus on data strategies, rich customer experiences, workforce upskilling and action-backed sustainability goals.
The manufacturing industry has historically been at the head of the pack when it comes to innovation and the application of advanced technology. However, an onslaught of challenges accelerated by the pandemic is forcing manufacturers to both consolidate their position as technology leaders and make advances in new areas.
For example, while operational efficiency has long been a goal, the go-to cost-savings measure of offshoring production and supplies has been impaired by geopolitical tensions, competitive labour markets and a need to rebalance facility location. Efficiency with resiliency is the new goal.
As a result, manufacturers are seeking new ways to build resilience and efficiency into their operations. Beyond tech investment, this means creating comprehensive data strategies that leverage the information flowing from increasingly connected environments, and building rich customer experiences, in addition to other priorities that focus on efficiency enhancement.
As our recent research with Economist Impact demonstrates, all these factors combined mean that an industry previously obsessed with driving down costs is going through something of a brand refresh. From the automotive industry to packaging suppliers, manufacturers are now striving to be high-tech and sustainable businesses. Only by backing up this progressive image with tangible action will manufacturers be ready for the future.
Manufacturers have already made significant progress by creating a solid tech foundation. In their pursuit of smart factories and automated production lines, manufacturers have turned core technology investments, such as cloud, Internet of Things (IoT) and robotics, into table stakes. Over 80% of respondents of the research have adopted or plan to adopt each of these technologies.
The quest for high-tech operations means technologies such as robotic process automation and big data analytics are also seeing high adoption rates, reflecting a need to pull data from disparate systems and drive valuable insights.
Heavy tech investment needs to be paired with a strong data strategy
Respondents to the research were asked to identify the areas in which their company is leveraging data; 39% of them already use it to improve the customer and user experience. Other areas that are also already covered by many include collecting data to guide decision-making processes (35%); to ensure regulatory compliance (35%); to guide product development (34%); or to employ predictive analytics across the product lifecycle (32%).
To be able to make all these targets come to life, a data strategy is still needed to tie everything together. Despite the wealth of data generated by IoT, cloud and 5G, many manufacturers lack robust data strategies to glean real value. For example, just 38% of respondents are using data to improve the customer experience and less than one-third are deploying supply chain analytics —despite several years of serious challenges in the space. This is worrying. Without identifying a prioritised use for their data, businesses will struggle to manage, structure and store it.
In addition to using innovative tech such as Artificial Intelligence (AI) or other forms of intelligent automation, manufacturers also stand to benefit from the monetisation of the data they create. For many, the strategic imperative is to use data to open new revenue streams by designing premium support capabilities based on predictive analytics, or offering predictive maintenance, asset utilisation or productivity optimisation services to customers at a premium.
Competition for digital skills requires a new approach to workforce development
There is no doubt that the skill sets required for modern manufacturing are becoming more digitally focused. Manufacturers have recognised that providing career progression and advancement is the best way to retain and cultivate digital talent in a hyper-competitive market.
Though while 93% of respondents agree that talent readiness is very important to future readiness, fewer than half are acting on talent management strategies. If advancement pathways are not in place and training is not provided, it will be easier than ever for employees to take their skills into other industries.
Moreover, employees with institutional knowledge aren’t being sufficiently leveraged with only 39% of respondents having implemented coaching and mentorship programmes. Manufacturing is a tech-heavy industry, but it must better leverage its advantages in this space to change the perception of the industry. While the sector has long struggled to woo digital talent, manufacturers can attract skilled workers by promoting its investment in technology, efforts toward data monetisation and focus on sustainability.
ESG: beyond regulatory requirements
While manufacturing can be a carbon-intense industry, 92% of respondents understand that becoming environmentally sustainable is crucial to being future-ready. Fortunately, the same infrastructure that manufacturers have invested in to promote efficiency and resilience can be applied to sustainability.
Setting targets and reporting on them is a priority, often due to legislation. Beyond that, becoming sustainable is about efficiency and resilience.
Most manufacturers are struggling to capitalise on the data, technology, and process advantages they possess. Just over half of respondents say they are setting sustainability targets, and few are applying data to these efforts. IoT sensors, cloud infrastructure and big data analytics are ready and waiting to provide what is needed, but almost half of manufacturers are not applying these tools to achieving their sustainability and social goals.
Empowering manufacturing with data, tools, and control
In a world of rapid technology acceleration, it is little surprise that manufacturers are ramping up investment in technology – whether to power a new insight engine or to replace legacy technologies.
While technology may form the cornerstone of investment strategies, the overarching goal is to use the data and insights to deliver better results. The future must empower manufacturers, so they can respond intuitively to the changing world around them.
About the author
Duncan Roberts is a Senior Manager for Cognizant Research. He joined the company in 2019, working as a digital strategy and transformation consultant in industries ranging from satellite communications to educational assessment and has advised clients on how to best utilise technology to meet strategic objectives while also turning around projects that had been in danger of failure.
