Everyone Wants to be Smarter: The Manufacturing Sector is Jumping on the Bandwagon

Everyone wants to be smart. Where I work, we believe “smartness” starts from within, and in business, we believe smart decisions are those that keep up with the times. Failure to upgrade can leave you in your competitor’s wake.

It can be quite appealing to suggest to business leaders that in order to be smarter, they need to make smart decisions and implement smart solutions on a regular basis, though we all know of these stand-out cases where a delayed or non-existent business action resulted in bankruptcy.

  • Blockbuster Video – Movie rental store
    • Moved too slowly to get into home delivery/home download model.
    • Netflix developed the convenient mail-order model, and Blockbuster could not be as agile since they had to unload stores while building the infrastructure to support a new model.  Redbox and video-on-demand also rose to provide competition in this convenience model. Filed Bankruptcy.
  • Dan River – U.S.-based printed textiles
    • Moved too slowly to access more sophisticated woven and pieced textiles from Asia, which were more appealing and cheaper to retailers. The company tried to develop the necessary infrastructure to source Asian-based products but was too late.  Competitors were already established plus Dan River still had the overhead of their U.S. mills and high U.S. labor costs. Filed Bankruptcy.
  • Footstar – Footwear sold exclusively through Kmart Stores and FootAction
    • Moved too slowly to diversify business to reduce reliance on Kmart.  Acquisitions to help diversify were executed too late and not were not profitable; new business development was delayed and could not scale quickly enough to offset Kmart’s decline. Filed Bankruptcy.
  • Borders – Bookstores
    • Acquired by Kmart in 1992, joining Waldenbooks, but lost important management and never recovered. Spun off in 1995, they turned their circa-1998 website over to Amazon to administer in 2001, but took it back in 2008. Borders was last to transition to an e-book device and continued stocking CDs when people were already streaming content, allowing Barnes & Noble and Amazon to leapfrog ahead. Filed Bankruptcy.

In each of these situations, business leaders failed to move forward in time and thereby suffered competitive disadvantages. These are just simple examples that show how imperative it is to stay actively engaged, and look two steps ahead  – especially where technology upgrades allow – because the outcome can produce greater benefits. For example:

  • Opting for cell phone mobility instead of landlines
  • Choosing smartphones for internet access versus standard flip phones
  • Updating appliances for energy efficient models to save money
  • Investing in new model cars for additional safety features
  • Disposing of old TVs in favor of high-definition smart TVs for expanded services

Kodak had the first digital camera and set it aside because they thought it would cannibalize their film business, rather than seeing how filmless camera technology would change the world.  Chip credit cards, which have made strides for financial and personal security, did not show up in the U.S. until there was legislation to require them. Because of the immediate costs attached to making changes, there is a reluctance to make them, and without a visionary to push them forward, the delay can leave them falling behind in the wake of their competition.

Upgrading for maximum efficiency

All businesses have the potential to improve the efficiency of their operations by upgrading their systems to take advantage of modern technology and innovations.  From smart cities that now have Wi-Fi everywhere, to factories that now have digital and automated operations (think Amazon Distribution Centers), it is the smart leader who looks to transform or even disrupt their operations for efficiency gains.

In a recent article by Deloitte, “The Smart Factory,” authors note that the essentials for a modern-day manufacturing operation to be smart are: integrated data, augmented workers and digital twinning  (monitoring process data to allow for predictive analysis). The benefits are gains in efficiency, quality, safety and sustainability plus reduced costs. In this scenario, we see “the convergence of the digital and physical worlds – including information technology and operations technology” shifting from linear to interconnected networks.

“The smart factory represents a leap forward from more traditional automation to a fully connected and flexible system.”
          —The Smart Factory – Responsive, Adaptive, Connected Manufacturing, Deloitte

The profile that Deloitte created shows four key attributes of this smart operation: connected, optimized, transparent and proactive.  I’d add a fifth: flexible. We see this model as universal for streamlining all business processes, particularly as we work with content management, and each business should consider how these elements could come to life within their business framework.

  • Connected – Transform paper into digital content that can be ingested into line-of-business systems for seamless integration of data.
  • Optimized – Automate workflows that execute repetitive tasks reliably without the risk inherent in manual operations.
  • Transparent – Provide easy access to data for all authorized users, in real-time, that is accurate and reliable.
  • Proactive – Translate predictive analytics into actionable data for smarter decision-making.
  • Flexible – Suggest agile and scalable solutions to allow for business growth without requiring a 1:1 increase in labor expenses.

In a recent AIIM Best Practice Article, “The Business Case for Paperless Manufacturing – using ECM to improve services,” we took a practical look at information technology as information “management” and how these attributes affect business processes in manufacturing, like accounts payable and human resources. Here, the focus was on driving a paperless environment to improve efficiency with content management solutions. Using invoice processing, we show how content management and workflow automation brought the business one step closer to total connectivity.  Similarly, the HR example demonstrates how unrealized security breaches can be rectified with more secure digital processes.

What makes us smarter?

In our manufacturing scenarios, it is through the convergence of technology where digitization, automation, capturing and using data that makes the operation smart.  To get there, it takes a proactive leader that knows change, upgrades and improvements brings significant benefits in the immediate operational window and sustainable returns – especially against the competition – in the long-term view. It is the visionary who takes the long view who is the smartest one of all.

Joanne Novak is a program manager at Konica Minolta Business Solutions U.S.A., Inc. and is responsible for program development with the company’s Business Intelligence groups, including the Intelligent Information Management (IIM) practice. Her responsibilities are to build sales and customer-facing educational and thought leadership insights as well as strategic initiatives for IIM.