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Ron Fallert

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Industry 4.0: What it means for the manufacturing industry

By | ERP, Manufacturing | No Comments
Manufacturing ERP software

In Industry 4.0, manufacturers can leverage digital tools, augmented realities, and expanded computer storage and analytics to transform business models and improve efficiency.

Industry 4.0 has arrived and is changing the way people live and work. For manufacturing companies, this newest industrial revolution forces organizations to take a new approach to every facet of their businesses.

This article takes a close look at the ways that digital tools and hypercomputing are primed to change the way manufacturers approach everything from R&D to customer service. It also looks at how these technologies can change entire business models, identify new markets, and alter the way work is done.

Defining Industry 4.0

The first industrial revolution arrived in the 1780s, with the advent of steam and water power to mechanize production facilities. The introduction of the assembly line and electrification allowed for the growth of mass production in the 1870s, marking the second revolution.

It was in the 1960s, when the use of computing technologies and automation began to accelerate, that the third industrial revolution gained strength.

The latest industrial revolution is generally defined as the era we live in today, with further growth in automation and data transfer driving the extraordinary changes in the way work is done. While definitions vary, Industry 4.0 generally consists of the following:

  • The increasing use of cyber-physical systems that connect production systems with smart production systems.
  • Reliance on the Internet of Things, the vast network of billions of connected objects that are equipped with sensors, storage, software, and wireless capacity to sense, record, and send information about usage, maintenance, and performance.
  • Cloud computing that allows for the storage and reporting of massive data sets, which can be collected and used in real time.
  • Supercomputing systems that provide the tools that can analyze those collected massive data sets. With supercomputing, manufacturers can collect, analyze, report on, and represent data in ways that can instantaneously leverage information.
  • Smart technologies, including robotics, artificial intelligence, and 3D printing, all of which are creating new opportunities, more efficient manufacturing processes, and interconnectedness.
  • Cybersecurity elements that require the careful protection of proprietary information, especially consumer, customer, and employee data.

Industry 4.0 creates an experience where manufacturing systems and their output are connected to one another like never before. They can communicate, analyze, interpret, recommend, alert, and share information. By doing so, objects and machines share intelligence and drive enhancements.

New models, new work

With the advent of Industry 4.0, manufacturers are forced to reexamine broad swaths of their enterprises. Here are a few ways that the manufacturing world is changing the lens it uses for perspectives on work and work products.

The Segment of one. While manufacturing continues to be, in many cases, a volume industry, there is room for growth and niche production never before possible. The “segment of one” mindset reflects the growing expectations of customers, who increasingly insist on different relationships with the products and brands they use.

Manufacturers need to understand where there are opportunities, and the technologies necessary, to create segments of one in their marketing, experiences, outputs, and customer service. Connected devices can be used to create unique products and services that are customized to smaller segments or even individuals.

The Role of IoT. The Internet of Things provides the capability for manufacturers to use digital information in the physical realm. Manufacturing begins with information about a product, a market, a drawing, or an output from design software. This information is communicated to machines to make the design and transform it from conceptual to physical.

With the IoT, sensors, networks, software applications, and other cognitive technologies provide invaluable inputs and outputs, allowing manufacturers to determine the scope, scale, and frequency of production. They allow manufacturers to better understand the risks related to security, reliability, and accuracy that can rapidly help improve processes and products. They can help address issues of latency and the timing of when manufacturing is optimal.

It is here that IoT can make a deep change to manufacturing. Instead of linear conceptual-to-physical and physical-to-digital processes, IoT allows for continual loops. Ideas and information can now flow seamlessly and multi-directionally, creating a physical-to-digital-to-physical-to-digital loop of information, feedback, enhancement, and innovation that is rapid and highly impactful to consumers.

Focus on outcomes. Customers today are no longer just interested in products. They are instead keenly interested in the outcomes afforded by those products. What does that mean for manufacturers?

It could mean, for example, that manufacturers are selling not just the wearable devices that provide information on vital signs and fitness levels. Instead, it means providing customers with customized information about, say, ingredients in their food products that could result in a lowering of cholesterol or blood glucose levels.

A look at new technologies driving Industry 4.0

To truly innovate, manufacturers need to understand the array of potentialities driven by new technologies at the heart of Industry 4.0. Here are capsule looks at some of these technologies:

  • Big Data. Refers to the collection of data, both internally and externally, that can be used as an ongoing source of information for analysis and discovery. It is often generated by objects within the Internet of Things.
  • Autonomous robotics. Factories of the near future will have the capability to use equipment and processes that improve via self-optimization, which will automatically adjust outputs, traffic, and processes in response to observed and reported data.
  • Augmented reality. AR allows for manufacturers to access and manipulate information with virtual representations of real-world scenarios. These tools can be used to identify maintenance issues, test solutions, create applications, and solve customer issues.
  • Point-of-use delivery. With connected objects playing a more important role than ever, it is possible to use POU delivery models to reduce wait times for customers, improve reliability, and anticipate production demand better than ever before.
  • Cognitive computing. As manufacturers and the products they make are becoming more wired and interconnected, more data are generated. Bringing function and use to that data requires powerful analytics programs that can display that data and identify patterns and needs. With cognitive computing, manufacturers can parlay all that data in three key ways:
    • Intelligent assets that use the data and analytics to sense, self-diagnose, and communicate in order to lower downtime and optimize performance
    • Enterprise cognition that takes information from workflows, products, contexts, and the environment to improve quality and decision-making
    • Resource optimization that combines data from disparate systems, locations, and usage levels to maximize the use of worker, energy, and equipment
  • Additive manufacturingThe more formal name for 3D printing, additive manufacturing includes some technologies that have been around for years as well as newer tools. This realm of manufacturing output also includes rapid prototyping, direct digital manufacturing, and layered output.
  • Advanced materialsWhether it is nanotechnologies, biomaterials, computing storage developments, or building materials, there is always a need to consider advanced materials in manufacturing.
Manufacturing ERP software

Intelligent robotics that can detect issues, report needed maintenance, and adjust manufacturing autonomously are key factors in the fourth industrial revolution.

Why paying attention matters

As Industry 4.0 becomes the norm, manufacturers should act today to determine the directions to take in adopting and adapting technologies that will impact business both in the short and long term.

Here are a few of the main reasons why manufacturers need to tackle Industry 4.0 now.

Operational ImprovementDeploying new technologies will provide a competitive advantage by maximizing the use of assets, minimizing downtime for equipment and workers, improving direct and indirect labor efficiency, and maximizing scheduling planning and accuracy.

Partnership opportunities. With 4.0 technologies, companies can improve existing relationships by providing more supply chain transparency and identifying new partnerships that can lead to new markets or products. Better transparency leads to risk reduction through clearer availability of raw materials, ingredients, and products. Warranty and recall procedures can be smoother and aided by improved track-and-trace functionality, too.

Supply planningWith deeper, integrated relationships with suppliers, manufacturers can create and respond to demand patterns and track the movement of goods throughout the supply chain. In turn, manufacturers can become proactive with customers, suggesting replenishment cycles and anticipating demand. Better transparency also gives manufacturers a deeper understanding of supplier capacity and lead times, leading to more informed supplier selection.

Revenue potentialWith Industry 4.0, companies can rapidly identify, pursue, develop, and deploy new products and services. Aftermarket opportunities can become significant, especially those that rely on the massive data sets being collected and analyzed.

Stronger customer relationshipsCustomers are demanding different relationships with manufacturers and Industry 4.0 allows those companies to respond. Collected data and feedback can deepen customer relationships, create a better understanding of customer needs and wants, and unearth insights that heretofore were not feasible. Customers can be better integrated into the discovery, testing, feedback, and innovation processes.

Market expansion. New products and services alone will generate new market possibilities. Industry 4.0 allows manufacturers to expand into emerging markets and international markets more quickly and to more readily gain insights into regional differences and preferences among customer bases. These new tools also offer a chance for companies to identify and pursue mergers and acquisitions more easily.

Accelerated planning cyclesNew tools allow for companies to identify potential new offerings, develop and test them, and bring them to market in weeks, not months or years. Automation and cloud computing provide the infrastructure to scale vertically or shift horizontally in support of newly emergent opportunities. In addition, companies can consider ways to make existing products smarter by equipping them with the tools that enhance the physical-digital-physical loop.

Better labor usageGood manufacturers understand the value of a well-informed, well-deployed labor force. With more information available, workers can make better decisions faster. They can be trained and deployed in smarter ways. Labor efficiency and productivity can be monitored, analyzed, and reported. Safety in the workplace can be monitored in real time, reducing accidents and lost work time.

Tying it together

At NexTec, we help companies leverage the growing technological revolution with solutions that integrate disparate corporate systems. Enterprise resource planning (ERP) systems provide companies with the platforms that allow for smart manufacturing for the 21st century.

We help companies identify their integration needs and identify, select, and install the right manufacturing ERP software systems that meet their unique needs. Our consultants have deep information and insights on the vendors, products, and features of leading ERP systems and will be trusted partners throughout the selection and installation processes.

Download the NexTec Corporate Brochure to learn more about how NexTec can help your organization thrive in Industry 4.0.

shipping container

4 challenges facing distribution

By | Distribution / Supply Chain | No Comments

As we barrel down the highway heading for the third decade of the not-so-new millennium, the impact of the digital reformation is making a huge impact on the industries of manufacturing, transportation, and distribution. Known for being industries that are traditionally slow to embrace change, the entire supply chain is learning to leverage the modern improvements and conveniences of cloud computing, mobile technologies, connected devices, and software for distributors. What challenges face distribution as we draw closer to 2020? How can technology help address those challenges? Here are your answers.

1. Supply Chains are Becoming More Complex & Less Visible

Any breakdown in the supply chain anywhere in the world can derail your ability to make on-time delivery and satisfy your customers’ demands.

The layers upon layers of suppliers and middlemen are growing rapidly. Each layer of supply and demand adds complexity while reducing the ability to achieve visibility into the supply chain.Most distributors admit to having very little visibility into their supply chains, even as tools for tracking and communicating with suppliers get richer in functionality and more reliable. A single breakdown in any layer of the supply chain can upset the entire industry — isn’t it time you got software for distributors so you can control your company’s destiny?

2. Customers are Less Tolerant of Delays

You’d think that in an era in which complexity is compounding by the day, customers would become more accepting of inevitable kinks in the process that lead to delays in distribution. However, B2B customers have quickly grown accustomed to the immediate, almost infallible service of tech giants like Amazon, and aren’t readily accepting of anything less than 100 percent reliable service, 100 percent of the time. That means distributors are forced to improve on multiple levels. In addition to being able to assure on-time delivery, distributors must provide superior customer service, predictable quality, and even take on the responsibility of making extraordinary product recommendations that reliably delight their customers.

3. Technologies are Addressing Needs Across the Supply Chain

The good news is, distributors now have the technology they need to help meet these rises in demand.

Though demands on distributors are indeed growing, the technologies available to meet those stringent demands are also maturing and becoming more potent. Along with more powerful software for distributors, there are tools like GPS devices to track fleets, automation tools to streamline and simplify processes, and paperless warehousing solutions that reduce errors, improve productivity, help manage inventory, and even lower labor costs. Without these and related technologies, it would be difficult or impossible for distributors to keep up with increasing demands.

4. The Supply Chain is Migrating to E-Commerce

Just like buyers take to Amazon and eBay to buy their laptops and gym bags and books, they’re also learning to leverage e-commerce for their business-related buying needs. B2B buyers are shopping and buying online, meaning that it’s essential to have a functional website (more than just a storefront window), customer portal, and other online presence.

Do you have the right software for distributors and other tools you need to succeed in the age of technology? Contact us today so you can prepare for the distribution environment of tomorrow.

ERP

The need to know is always now in warehousing & distribution

By | BI, CRM, Distribution / Supply Chain, ERP | No Comments

ERPA mere 25 years ago, many, if not most, businesses tracked inventory on a daily lot basis, updating once a day. Twenty years before that, even major corporations were painstakingly tracking inventory in ledger books which could be several days behind.

We have come a long way. So far, in fact, that no business can operate successfully today without knowing precisely where each component, each piece of work in progress, and each finished product is, not only in-house but upstream and downstream throughout the entire supply chain. It can’t be done without the right business systems.

Integrated business systems are imperative for successful supply chain management. To compete in a global marketplace, the need to know is now in warehousing & distribution.

Minimizing complexity

Supply chain management is, on its face, a complex array of interrelated functions and operational areas. Whether an organization is small in scope or a multinational conglomerate, there are myriad components that need to work well together.

With a network of interconnected business units, suppliers and sales channels, distribution hubs and methods, personnel and regulations, supply chain management becomes an integral component of business success.

Consider that even in smaller organizations, effective management of warehouses and distribution requires clear communication, ready access to data for decision-making and foundational systems integration for many operational areas, including:
ERP

  • Supplier management
  • Inventory management
  • Sales force management
  • Distribution
  • Financial management
  • Payment management
  • Channel management
  • Customer relationship management
  • Customer service management
  • Order fulfillment
  • Manufacturing flow
  • Procurement
  • Product development
  • Returns management

Importance of integrated systems

Given the dynamic variables possible with each of those processes and functional areas, providing real-time information and analytics becomes critical for effective enterprise resource planning. With growing demand on the part of consumers and customers for rapid service and transparent information, there is an ever-greater need to provide system-wide information to those who need to make decisions.

Efficiency means having real-time access to reporting, inventory management, orders, and logistics deployment. Yet all too often, companies have disparate systems that make the analysis and sharing of data daunting.

Fortunately, new tools are available today that provide enterprise resource planning (ERP), business intelligence (BI) and customer resource management (CRM) solutions in one integrated platform. With integration, companies can bring together disparate data points, identify and solve problems faster and identify trends and opportunity.

All of these functions, in turn, can lead to increased revenue, improved B2B or B2C relationships, streamlined operations, cost savings, and adherence to regulatory requirements.

When choosing ERP, CRM and BI systems, it’s important to make sure that integration is maximized. But understanding the many vendors and solutions can be daunting.

At NexTec Group, our worldwide team of consultants partners with the leading providers of business systems and can create a comprehensive solution to meet your distribution and warehousing needs. Download the NexTec Corporate Overview Brochure to learn more about how NexTec can keep the gears moving throughout your organization.

Where in the world is manufacturing growing?

By | Manufacturing | No Comments
Recent Fed reports indicate mixed growth and moderate expectations for the manufacturing sector.

Recent Fed reports indicate mixed growth and moderate expectations for the manufacturing sector.

Which way is manufacturing headed? It’s hard to tell. On the one hand, you see reports of declines in the sector while on the other, the media touts a booming manufacturing base driving growth.

The truth very likely lies somewhere in the middle. So, where in the world is manufacturing growing and going?

More gas, more growth?

The rise of shale gas has been controversial. The fracking techniques used to extract trapped natural gas have allegedly caused significant issues with the environment. Yet the abundant supply has pushed the cost of natural gas domestically to less than half of that in Asia, Europe, India and South America.

A July 2016 article by Mark Perry of the University of Michigan and the American Enterprise Institute points out that lower prices and energy security are driving manufacturing growth, particularly in energy-related industries such as iron and steel, food and paper products, plastics, bulk chemicals, and petrochemicals.

Coupled with lower electricity prices, the reduced energy costs helped propel the US to an all-time high of $2.17 trillion in 2015, second only to China and more than the combined outputs of France, Germany, India, Italy and South Korea.

Strong growth is reported in certain sectors, including machinery manufacturing.

Strong growth is reported in certain sectors, including machinery manufacturing.

Fed reports mixed results

On the flip side, the Federal Reserve, in its most recent “beige book” look at the US economy, reported “mixed” demand for manufacturing products from early October to mid-November. The Fed reported that growth was expected in many key US manufacturing markets, including New York, Atlanta, and Dallas. However, the strong US dollar is a concern for exporters in Boston and San Francisco.

So where are the gains? According to the Fed, there’s optimism in chemical, automobiles, machinery, aerospace and electronics manufacturing, though not in all regions of the country. From a national perspective, there are clear manufacturing trends emerging.

What’s driving uncertainty?
There are several factors experts point to that are driving the mixed messages. Strong US currency and weakened international currencies are one crucial factor. The Fed is cautiously optimistic but not predicting any economic surge.

Another critical factor is the Donald Trump presidency. Trump consistently pledged an isolationist stance and a desire to incentivize companies to keep jobs on American soil. His pressuring of Carrier Corp. to make a deal to keep about 1,000 jobs from moving abroad was met with mixed reviews and is unlikely to be a sustainable, long-term strategy.

Being certain with uncertainty

How can manufacturing companies withstand the variability of the current marketplace? At NexTec Group, we work with clients in a wide range of manufacturing sectors to develop integrated systems that help to reduce complexity and boost efficiency.

With NexTec Group, your company will work closely with one of our experienced consultants to find the right ERP software solution both for today and tomorrow. We have relationships with a large number of ERP providers and a deep understanding of the strengths of each.

By gaining a deep understanding of your business needs, we can recommend an ERP solution that best fits. Contact us today to learn more about how NexTec can help your manufacturing company find the right solution.