Digital Transformation • March 24, 2022

3 Steps an SME Manufacturer Can Take to Begin Their Digital Transformation Journey

3 Steps an SME Manufacturer Can Take to Begin Their Digital Transformation Journey

Much has been written about the challenges with implementing enterprise systems to improve efficiency and automate production activities. Given the size and scope of these projects, the time, resource, and cost investment has typically prevented Small and Mid-sized Enterprises (SMEs) and SME manufacturers from considering such an option. Several things have changed in the past couple of years, which has forever changed this equation. New modular manufacturing applications are now available that can be deployed as a managed service on the cloud. This option is quite appealing given that the cost to implement is substantially less with a higher number of out-of-the-box capabilities pre-configured. And, delivered as a managed service, the internal IT resource constraint is eliminated.  

Still, the prospect of a major software project, tied to digital transformation may seem just too daunting for some companies.  After being inundated with media accounts of massive projects that have gone wrong and stories of failed implementations, it is normal to feel hesitant about undertaking the deployment of new technology.  Yet, the ongoing supply chain and labor issues, coupled with current geopolitical instability make it a necessity to do something.  The “do nothing” option just isn’t viable. What follows is a three-step approach to moving away from paper or spreadsheets or an old legacy Manufacturing Execution System or MES.

First: Get Rid of Paper (or Spreadsheets) in Manufacturing Operations

The factor that finally motivates almost every small or mid-sized manufacturer that wants to modernize is the desire to get rid of that paper.  It is well documented that paper-based data collection is the biggest bottleneck most companies face.  While many of these manufacturers have made the move to an Enterprise Resource Planning (ERP) or automated accounting system because of customer demand, they are stuck with paper on the shop floor. 

Continuing to use paper or manual production line processes leads to numerous problems such as data entry errors when transcribing shop floor data into the business systems. It also results in less data being collected than is available – both the cost to collect the data as well as load it into the ERP or accounting systems is overwhelming. 

This is not a one-way issue. By having to print work instruction packages and have them move with the products throughout the manufacturing process, there is always the risk of paperwork getting lost or associated with the wrong units. Even if spreadsheets are used to collect some of the production data, there are still inefficiencies. It is difficult to connect spreadsheets to the automated systems that collect the data.  If spreadsheets are often used to send production plans to the shop floor, they are printed out and then become just more paper to manage. In both cases, another downside is that almost always, the information that is loaded is done via batch processes that occur only at the end of the shift or daily.

As a first step, implement a minimal set of MES functionality that allows for the preparation of a production plan followed by a way to execute your work instructions that are part of the plan. By automating this first step, you can begin collecting accurate clean data from every process tracked through the MES user interface. This provides for the timely transmission of information and can unlock real-time status reporting. You’ll get multiple immediate benefits from what amounts to a simple step. And, if the MES is Cloud-based, you will have the ability to deploy it incrementally as another benefit.

Second: Once You Have the Data, Focus on Planning and Execution

Management guru Peter Drucker said, “if you can’t measure it, you can’t improve it.”  So, once you have gotten rid of paper or spreadsheets, you are then well-positioned to leverage Drucker’s advice. With more timely and accurate data you can begin to focus on process improvement. 

Manufacturing planning is critical to meeting customer requirements, yet many manufacturers know that Murphy’s Law will ultimately impact even the best of plans.  Or as Prussian Field Marshall von Moltke observed 150 years ago “no plan survives first contact with the enemy (paraphrased).  With a modern MES/MOM system and current timely and accurate information, a process upset due to a machine outage, raw material issue, or labor challenge can easily be adjusted for.  The ability to rapidly implement new production work instructions is another benefit.  With a digital or automated production planning and execution system, it is much easier to update workflow and process steps as new or better methods are developed or required on the shop floor.  

Third: Deploy Advanced Capabilities like Integrated QMS

As you follow a continuous improvement process in your planning and execution efforts, it is natural to expand the scope of these benefits by integrating advanced capabilities, such as an integrated Quality Management System (QMS). Once only available to companies that could afford large integrated deployments such as a major ERP package, the modern MES allows mid-sized manufacturers to access the tools large manufacturers take for granted to manage and improve their product and process quality. 

Here is a notable example of how the benefits of investing in a modern digital automated solution continue to grow. And, how it is possible to incrementally add new functionalities over time – just as you would do to expand your business. Trying to deploy these capabilities without the solid foundation that the first two steps provide is just not practical. Point solutions might be appealing but often end up just requiring additional paperwork or data entry – introducing new data collection errors and increasing costs. Hardly a step forward! 

Planning your migration to digital, automated production systems can be done in steps. With a solid foundation, an SME manufacturer can achieve higher performance by virtually eliminating manual errors and avoiding all the time spent reconciling paper records. As a next step, Tier One quality and service can be incrementally added, gaining the advantages of a larger enterprise’s agility and responsiveness. 

Read more about the strategy of embracing a modular implementation strategy to digitalize production processes, Mid-Sized Manufacturers Should Deploy Software Like They Grew Their Business.


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