14 November 2017 - From cost reduction to increased agility and revenues, total digitisation of the manufacturing process, Industry 4.0, is expected to enable internal improvements and production innovation. Music to the ears of manufacturers but how far off are they from achieving this? It may or may not come as a surprise but some way off, according to new research by Sapio Research on behalf of Zetes, that reveals the true extent of the challenges currently facing the industry and the noticeable gap between what its operational objectives are and what is actually being realised now.

Manufacturing report 2017Only 29% of manufacturers admit to truly understanding what having a Digital Supply Chain Network (DSN) is, with under 15% implementing a DSN and expecting them to become the norm for the business in the next five years. The biggest challenges to adoption? The lack of information visibility, which in-turn damages the chances of an organisation being able to access relevant insight in real-time.

Key findings

At present, manufacturers state securing meaningful intelligence from their end-to-end supply chain as a challenge (80%), dealing with-real time information (75%) and the ability to deal with the intelligence – as significant hurdles that need to be overcome. Other key highlights from the manufacturing research include:

  • Over half (59%) do not have real-time visibility of stock levels within the organisation;
  • 65% do not have real-time view of suppliers’ manufacturing schedules;
  • 68% do not have a real-time view of manufacturing volumes across plants within the organisation;
  • Only a third of manufacturers are able to aggregate information across the supply chain
  • Despite the rise in the Internet of Things (IoT) and aspiration of digital supply networks, organisational effectiveness is still reliant on date communications including telephone, fax and email to share critical information

The fact that over two thirds of manufacturers cannot provide decision makers with access to the information required to make informed business decisions, is of significant concern. Although 89% of manufacturers state that they believe that a single view of information from supply chain operations is key – to date, only 30% have full end-to-end visibility. The next 12 months will therefore be a crucial time period for manufacturers as they take steps to transform their business. And, there are positive signs that many are starting to make some vital changes; 38% of respondents are looking to improve supplier collaboration, 35% supplier performance monitoring and 34% predictive alerts to mitigate disruption.

Need for agility, collaboration and real-time information

So, what is going to be key to realising the benefits of the digitisation movement? Creating an integrated information layer fed by core systems, enabling collaboration between departments and being able to access the right information, at the right time, from anywhere in the supply chain. And, most importantly, empowering management to take the essential decisions required to embrace demand-driven manufacturing and to meet, if not exceed customer expectations. The clear benefits include, becoming more agile and maximising the investment in expensive equipment – and to do so whilst also driving down inventory levels and releasing working capital.

Sébastien Sliski, General Manager Supply Chain Solutions at Zetes comments: “Manufacturers know that across the industry there needs to be greater focus on speed, accuracy and agility within the end-to-end supply chain, if they are to remain competitive and achieve the nirvana of Industry 4.0. The only way they are going to be able to reach such heights is to optimise processes between legacy and new systems as well as providing key stakeholders with meaningful insight from real-time data sources.

“Connecting different internal and external silos and harmonising that data is pivotal to making valid comparisons and supporting intelligent decision-making. The pressure is on; but once manufacturers begin to make small changes within the supply chain, and become more proactive, they will be in a better position to become fully immersed in Industry 4.0 and can start reaping the benefits it will bring to both their business and customers.”

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The research, conducted by Sapio Research, surveyed 330 senior managers within a range of manufacturing sectors across Europe and South Africa in August 2017.

Download Zetes’ ‘Manufacturers want supply chain visibility and collaboration; what’s holding them back?’ report