Not only do today’s customers expect innovative products that fill unforeseen needs, they expect to receive those products within days of ordering them. To make that happen, manufacturers can deploy cloud communications across complex supply chain nodes. That will increase efficiency, drive profits up and keep costs down.
Consider this scenario: An online retailer based in New York prepares to launch several new shoe designs in time for the spring and summer season. The new product is approved, manufacturers and suppliers are in place, distribution centers are ready and the ad campaign begins. But while customers are clicking through the website, reading product details and moving toward the shopping basket, they don’t know about the supply-chain problem that’s arisen.
It seems that while customers were doing all that clicking, one of the manufacturers based in China discovered problems with the raw materials that impact the shoe’s design. It can be fixed, but the issue could delay production.
What to do? And how to do it quickly?
Collaboration across the supply chain
In 2017, IDC’s report “IDC FutureScape: Worldwide Manufacturing Predictions 2018,” said that 2020, 80 percent of supply chain interactions will occur across cloud-based networks. The result? A dramatic improvement in participants’ resiliency and a reduction in the impact of supply disruptions by up to one-third. Technologies that have the greatest impact include cloud, mobile, big data and analytics and the Internet of Things (IoT).
“Manufacturers of every size and shape are changing rapidly because of new digital technologies, new competitors, new ecosystems, and new ways of doing business,” said Kimberly Knickle, ICD’s research vice president for IT Priorities and Strategies for IDC Manufacturing Insights. “Manufacturers that can speed their adoption of digital capabilities in order to create business value will be the leaders of their industry.”
Key to the demand-driven supply chain model is visibility and transparency. All players from manufacturers to distributors, designers to marketers, must be able to see data and communicate quickly. Cloud communications make this possible.
The barriers are numerous – geography, hardware, software applications and language all vary across the supply chain. But with a unified communications strategy using the cloud, such obstacles can be overcome. A dashboard that uses APIs to communicate to different devices and software allows all parties to access shared information. Communications can occur via voice, video, text or chat, using desktop or mobile devices.
Boeing used cloud communications to design the 777 and 787. They shared with their suppliers three-dimensional models of component design. Each supplier then shared information about price, delivery and quality. The process greatly reduced the labor and time needed for design changes, while reducing risk for Boeing and its suppliers. The all-virtual design approach cut the time to market by more than 50 percent.
Back to the shoe manufacturing crisis: Using cloud communications, the China-based manufacturing team sets up a video conference with the retailer’s designers in New York. The two teams collaborate to share schematics and solve the problem. Meanwhile the distribution team gets an alert on their smartphones about the changes and possible delays.
The cloud and manufacturing process improvement
IDC also predicts that by 2019, 15 percent of manufacturers that manage data-intensive production and supply chain processes will also leverage cloud-based execution models that depend on edge analytics (data from IoT devices) to improve processes and reduce waste.
Using APIs, data collected from “smart” devices will automatically flow into cloud-based apps. One result: The company’s factory in Honduras will be able to see equipment issues occurring in Brazil and use the data to prevent those problems from occurring at all.
The ability to collect and aggregate raw data in a timely and efficient manner is essential. Sorting through the relevant data, analyzing it and applying it to process improvements must happen quickly. Using cloud collaboration, supply chain partners make this happen.
IDC also noted that cloud investment and Operational Technology and Information Technology (OT/IT) integration will be a very high priority. More than 40 percent of companies reported that they will invest in cloud software and platforms to support their OT processes.
Reliable cloud communications changes how people work together to accomplish efficient, just-in-time manufacturing. Whether the data involves machine operation or supply chain challenges, the need for all partners to access data and problem-solve across geographical and technical boundaries is a key to success. Cloud communications are the future of manufacturing because they alter the very dynamics of the process, paving the way for increased collaboration, greater efficiency and faster delivery of products to market.