An overview of the insights gleaned from an exclusive roundtable discussion hosted as part of The Manufacturer Director’s Forum, co-hosted with IFS.
Of all the technologies that are powering the digital manufacturing revolution – or evolution, it is artificial intelligence (AI) that senior executives believe will have the greatest impact.
Almost 80% expect AI to have a profound influence on the future of work and will likely disrupt their market, with 85% planning an AI investment by 2020*. However, levels of investment remain a concern.
When it comes to actual and expected investment in AI, although 44% had already invested, 4% said they had no plan to invest, and a further 15% were still not sure.
So, what’s holding UK manufacturing businesses back from investing? What are the barriers to adoption? How do you turn a buzzword (as some see it) into a workable medium to long-term strategy?
Providing answers to these questions was the focus of the latest Director’s Forum dinner, co-hosted by The Manufacturer and IFS, a global enterprise software solution provider. The roundtable discussion brought together a select group of senior engineers and executives who represented largely global food and beverage organisations.
Is the UK behind the curve?
There was some disagreement within the group around where the food and beverage (F&B) sector – currently the UK’s largest manufacturing sector – stood in terms of AI adoption.
The Head of Manufacturing at a global wine business saw the F&B sector as being behind the curve, when compared with discrete manufacturers, particularly those operating in automotive, aerospace and defence. A Supply Chain Director at a multinational food, snack and beverage manufacturer echoed these views.
The attendees wondered whether F&B organisations are not under as much pressure to embed IT and advanced technologies as deeply into their businesses, hence the pace of change is a little slower.
However, Antony Bourne, President of IFS Industries, had an alternative view, arguing that although many F&B businesses may feel as if they’re lagging behind, there aren’t many companies currently leading the way or blazing a trail for others to follow.
“Everyone is trying to find their own way, no one has all answers and there’s certainly no silver bullet,” he said.
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Accurate demand planning
“Food and beverage manufacturers face significantly greater pressures than most discrete businesses and work to much shorter sales cycles,” Colin Elkins, Global Industry Director for Process Manufacturing at IFS noted.
They also operate in unpredictable, complex markets which can be affected by external events as random as a cookery programme being broadcast (the so-called ‘Delia Effect’, prompting a dramatic increase in demand for cooking products), or an unexpected spell of hot weather.
Given the importance of cost-control, efficiency and remaining competitive, particularly in F&B, it wasn’t surprising to hear that accurate budgeting, responsive planning and dynamic forecasting was where attendees saw the application of artificial intelligence and process technology generating the greatest gains.
“You may want to improve the efficiency of your production process, build deeper customer relationships or improve your pricing accuracy,” said the Supply Chain Director of a global confectionary and pet food manufacturer.
“But this can only be achieved through a more unified, accurate approach to forecasting, planning, simulation and scenario analysis. A 1% improvement here can generate substantial gains or cost-savings across the entire supply chain.”
What are the barriers to adoption?
So, what’s standing in the way? Attendees identified six primary challenges facing businesses:
- Getting key stakeholder buy-in: Senior management team members can be somewhat parochial, one director noted. Several others claimed that people’s attitudes and/or organisational cultures were actively hindering progress.
- Quantifying ROI: With every business having a unique set of needs, AI’s potential returns can be difficult to predict. Benchmarking its performance against a human operator doing the same job, or comparing predictions with real-world results, were suggested as useful starting points.
- No business plan/identifying the use case: There’s a danger of being seduced by the shiny kit of digital technologies, or being dazzled by the possibilities, leading to investment without identifying the use case. “Too many businesses invest big, but gain little.”
- Legacy systems: Many of the manufacturers represented are still shackled to ageing facilities and production systems. This represents a significant risk, one which only increases as time moves on.
- Moving too quickly: Having taken successful first or second ‘pilot’ steps, there is sometimes a tendency to jump ahead to step seven or eight. “Everyone wants to move quickly, but skipping the vital early stages is rarely the answer,” commented Bourne.
Above all else, however, attendees universally cited the UK’s desperate lack of technical skills, especially digital skills.
Future-proofing and tackling the skills shortage
One Head of Manufacturing said that he started the evening’s discussion believing his biggest inhibitor to progress was IT, but was beginning to realise it was more likely to be his business’ approach to training.
“All our apprentices are being trained the traditional way in classical engineering to perform the tasks of today. It’s the way we’ve always approached it, but we probably need to take a more long-term view,” he commented.
“It’s the skills, tasks and job roles of tomorrow that will deliver and sustain growth, not that of today,” he added.
A Business Line Manager at a global manufacturer of industrial tools and equipment agreed, adding; “Your business aspirations can stand still because of the current skill level of graduates. Apprentices are better but many still struggle to adopt additional learning opportunities.”
Yet, manufacturers themselves don’t need to become artificial intelligence or digital technology experts, noted Antony Bourne.
Rather, they should identify what it is they want to overcome, improve or add to their market offering and pass that problem on to a more knowledgeable third-party to solve, such as a technology partner.
IFS develops and delivers agile, component-based software for enterprise resource planning (ERP), enterprise asset management (EAM) and field service management (FSM).
Visit the website to learn more: https://www.ifsworld.com/uk/solutions/
* Figures taken from Deloitte’s inaugural Digital Disruption Index
[All images courtesy of Depositphotos]