Covid-19 has impacted the entire manufacturing value chain, from sourcing of raw materials to design to actual manufacturing to distribution. While a supply chain breakdown was felt almost immediately, one of the more enduring impacts has been in terms of establishing a direct line of communication between the consumer and the manufacturer.
Traditionally, with distributors acting as mediators, manufacturers had little chance to interact directly with customers. As e-commerce and direct online sales models gained ground during the pandemic, customers are now able to interact and provide direct feedback to manufacturers.
This has also nudged manufacturers into an era of personalisation at scale where a consumer can potentially customise the product that they want to buy. For example, if a customer is buying a sofa, they can choose the design, colour, or style and get it manufactured to their exact specifications, rather than buying something off the rack. This shift from standard production to mass personalisation can be a leveraged by manufacturers to build brand strength and loyalty. It also results in product differentiation and allows organisations to charge premium price.
The transition to the ‘new normal’ will compel manufacturing enterprises to rethink their entire process- from design to fulfilment.
The dawn of a new era
Manufacturing 3.0 was focused on globalisation of talent, materials, and operations. Various aspects of the manufacturing lifecycle right from design, prototyping, engineering, manufacturing, assembly, and distribution were done in geographically diverse settings.
The global disruption caused by the pandemic has given rise to Manufacturing 4.0 where the Cloud, IoT and other new technologies are compelling industry to re-evaluate the manufacturing lifecycle. To avoid dependency on any single geography or market, today, they are looking for different approach that places an emphasis on local alternatives to counter global disruptions.
Technology undoubtedly has a big role to play in facilitating a smart manufacturing approach. Today, robust feedback mechanisms can provide customer insights directly to the manufacturer without any dependency on the distributor.
This transformation necessitates a digital platform powered by Coud technologies as its backbone. Our own experience shows that manufacturers who had moved critical applications to the Cloud were able to weather the pandemic better since their employees could work productively even in a remote set-up. Therefore, manufacturers need to move their systems and data to the cloud as quickly as possible to reap the benefits of better technology scalability, tighter demand-supply agility, and better financial health.
Although companies cannot predict when a public health crisis or other natural disaster might occur, they can help mitigate the effects of unexpected disruptions by carrying out risk assessments. They can identify potential internal operational, financial and market risks, determine direct and indirect impacts, and generate contingency plans in case of unexpected disruptions.
Role of business applications
As the changes brought about by the Covid-19 pandemic is driving a shift to Manufacturing 4.0, technologies such as automation, IoT, 5G, and cyber-physical systems are coming together with Cloud to drive a smart factory approach. Powered by a set of business applications, intelligent supply chains open a multitude of new opportunities to bring greater scalability, exponential growth, and more predictability.
For instance, machine learning-based business applications can help ensure optimal stocking, thereby minimising wastage due to overstocking as well as revenue loss due to running out of stock. Similarly, automation and IoT can ensure efficient production planning in real-time. Predictive analytics can help optimise planning, sourcing, and logistics to improve supply chain performance, even in the event of disruptions. Microsoft has been leading the way with its offering of advanced platforms, business applications and tools that empower organizations to leapfrog into the new manufacturing era. Microsoft offers capabilities such as Planning Optimisation that allows organizations to gain planning agility to fulfil customer demand and Sensor Data Intelligence to create a connected smarter factory and innovate with intelligent manufacturing operations.
These applications can also facilitate mass personalisation at scale by providing greater intelligence and visibility. For example, Microsoft offerings empower end customer user to personalise various aspect of the product they intend to buy based on their needs and choice. For the end customer, this facilitates an overall engaging experience and greater inclusion in the value chain. Finally, AI-driven customer and sales insight tools help assess demand forecast and drive product innovation based on intelligent insights on customer behaviours and market trends.
The pandemic has highlighted the importance of having diversified supply chains, intelligent manufacturing, an empowered remote workforce, and cloud-based business applications. All these are bringing a perceptible shift in manufacturing business models towards a far more customer-centric approach.
About the author
Lax Gopisetty is Vice-President, Global Practice Head for Microsoft Business Applications & Digital Workplace Services, Infosys. He is a senior business leader driving digital transformation growth with Digital Workplace Services and Microsoft Business Applications practice for Global 2000 clients across industries and regions.
Gopisetty has over 25 years of global management consulting experience across Infosys, Accenture, PWC, and IBM advising global enterprises with their complex business transformation initiatives driven by latest technology developments. His focus is on bringing Innovative solutions, disruptive and relevant approaches, creating new possibilities enabled by technologies and value creation for our clients to be future-ready enterprises built on digital capabilities.