The benefits of connecting your physical equipment with virtual systems to support your people and their processes have been clear for some time. One of the first steps towards connecting the siloed activities that plague many operations is to move towards paperless manufacturing. This allows for greater productivity, more accurate information, higher profits, and a host of other benefits. Furthermore, research shows that companies that have adopted digital operations consistently outperform their competition.
While true, these benefits have existed mostly for the large manufacturers competing on a global scale. That’s not because the mid-market and smaller firms haven’t known about it. A survey by the Manufacturing Leadership Council found that 99% of mid-market manufacturing executives have at least some understanding of the benefits of Industry 4.0.
But for most mid-market firms, the time just hasn’t been right. The technology has been expensive, and the need to change is not as pressing as this week’s production goals. In the last few years, however, the scale has tipped in the other direction. Mid-market manufacturers are beginning to move seriously toward paperless manufacturing.
Analysts and manufacturers cite several reasons for the recent shift. Two of the most commonly mentioned are the pandemic and increasing competition.
There’s no doubt the pandemic has made everyone rethink what they’re doing, forcing change on many companies. A report from Deloitte, available online, says: “Across an array of industries, America’s middle market and private companies have tailored their operations amid the uncertainty of the COVID-19 pandemic. The crisis has accelerated the digitization of nearly every corner of the economy.”
Tougher competition is also a factor. In a survey of mid-market manufacturers, 86% reported that competition has increased markedly in the last five years. This is forcing many firms to improve and modernize in order to survive.
Meanwhile, the barriers to going paperless have been steadily getting lower, and this may be the most important factor of all. The Manufacturing Leadership Council reports that two of the top reasons that mid-market firms have resisted going paperless are the “intimidation factor” and “justifying the cost.” Now a new generation of software and cloud managed services has largely removed these barriers, and it’s changing the game for mid-market firms. And if you are in need of secure ITAR and DoD requirements, the same applications are available on secure “gov cloud” providers, namely AWS and Azure.
Easier entry: Eliminating the intimidation factor
Until recently, going paperless meant large investments in hardware and software, plus the staff to manage the technology, with no assurance that it would pay off as planned. The smaller the manufacturer, the greater the risk seemed.
With the emergence of the public cloud for serious business applications, the equation has changed completely. You no longer need to buy or lease servers and software systems, nor do you need to worry about updates, upgrades, and maintenance. All the technical side of the computer systems—the servers, the software like MES and ERP, and all the rest of it—resides in the cloud.
The cloud network is maintained by a public provider such as Amazon Web Services, and the software applications come in the form of Software as a Service (SaaS) from whatever vendors you select. Most major manufacturing SaaS vendors offer varying degrees of interoperability, leaving you free to choose best-of-breed solutions while still getting the integration that you need between systems.
Cloud-based applications have other benefits too, such as accessibility from anywhere and protection against lost operations through weather events or other catastrophes. The bottom line is that instead of making large, intimidating capital expenditures on technology, you just subscribe to the applications you need. It’s a much easier step to take, and it has huge funding implications.
Targeted solutions: Justifying the cost at every step
Adopting technology one step at a time has always been a good way to control costs and monitor progress. The difference with cloud-based systems is that you can pick and choose applications and deployments to a very fine degree.
For instance, you can try paperless systems for one production line or shift, working out the kinks before extending it further. Or you can run a shadow system alongside the current paper system, only going live when fully ready. These options aren’t practical for mid-market firms that must first invest in hardware, software, and support staff. But with the cloud and SaaS MES, the cost is low, and the results are measurable, making every step justifiable.
By targeting your most pressing issues and those with the clearest economic return, you can show a net profit almost from the start.
I don’t mean to suggest that going paperless is an easy or simple transition. To be successful, manufacturers need a strategy for taking advantage of paperless systems so they can improve workflows, increase collaboration, and reap all the other benefits of digital technology.
There are other items to address, too. Cybersecurity is rated as a top concern by experts and manufacturers alike. While the cloud itself is a highly secure environment, companies still need to ensure their own security. You’ll need formal systems in place to control access to devices and applications, and how users are authenticated.
Another concern is staffing. While cloud applications lessen the burden on your own IT, they don’t eliminate it. For security, help desk, and other reasons, paperless manufacturing requires a strong internal IT team. However, with the right partner, your IT team will be supported by experts.
While there are still challenges, the greatest barriers to going paperless have been removed. Digital transformation is no longer a high-risk move, and the cost justification has never been clearer.
As the Harvard Business Review writes, “Middle-market companies with a digital vision that is clear, comprehensive, and guides strategic decisions grow 75% faster on average than less digitally sophisticated peers.”
The bottom line for manufacturers who are still using paper: Plan a digital strategy, find vendors who align with your vision, and get started.