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10 Takeaways: SAP’s Guide to Manufacturing Interconnectivity

As latest trends, innovations and disruptive events work to reshape the manufacturing industry, we break down SAP’s ‘Success in the New Era of Manufacturing: A guide to becoming an interconnected business’ ebook, listing our 10 takeaways.

10. Connecting the Dots

Faced with widespread disruption, fluctuating trade policies, rising costs, shrinking talent pools, limited cash reserves and complex supply chains, it is safe to say that manufacturers like many others have had a particularly challenging 2020. “Firms scrambled to set up IT infrastructure to support remote working; demand for goods collapsed or supply dried up; logistics across borders became radically more complex, and millions of businesses were shuttered worldwide,” says SAP.

Who explains that organisations most successful in mitigating the impact of the events of 2020 were those that valued collaboration, cross-business insights, data-driven decision making, and agile processes and people.

“By marrying these traits, they became ‘interconnected businesses.’ In doing so, they are able to offer outstanding customer and employee experiences, build resilience, and navigate rapid market fluctuations – capabilities that are essential for the future. Interconnected businesses are also in a stronger position to seize new opportunities and pursue growth when the economy stabilises,” adds SAP.

9. Engage Customers

For mid-sized manufacturers, SAP reports that improving customer experience will be a top priority over the next three years, overtaking profits and growth.

“This is no surprise, given the major shift in focus from outstanding products to outstanding services that industrial manufacturers have seen in recent years,” says SAP.

However, one of the major barriers for manufacturers (42%) is keeping up with changing customer wants and needs in order to achieve this goal. Which SAP states could be due to a lack of real-time data or analytical skills.

“While customer service has a large role to play in improving customer experience, there is evidence to suggest that mid-sized businesses undervalue the role of other functions in supporting high-quality experiences. These include sales and marketing, operations, finance, and IT.”

8. Engage Customers: Best Practices and Technology

Best Practices

  • Audit: Identify any barriers and work to remedy them.
  • Improve collaboration: encourage communications between departments, avoiding silo operations, instead adopt cross-functional teams.
  • Cover all bases: engage with customers where and how they prefer and be consistent in the delivery of experiences.

Technology 

  • Customer relationship management (CRM) software
  • Machine learning
  • Artificial intelligence (AI)
  • Cloud-based customer experience (CX) solutions
  • Data analytics
7. Empowered Employees

“Businesses need a workforce that is agile and adaptable; employees that feel safe, engaged, and productive,” comments SAP, who reflects that this correlates with why mid-sized businesses looking to attract and retain latent rate improving their employee experience as a top priority.

In order to do so, organisations need to listen and respond to employee feedback, while strategically allocating resources to fulfull business needs.

“However, this is easier said than done. While you may have tools for specific HR functions such as scheduling or attendance tracking, this siloed approach does not give you visibility into the overall workforce and business operations […] To fulfill these imperatives, mid-sized manufacturers need stronger platforms for collecting and analysing information about employees – as well as a management that listens to and reports on worker feedback,” says SAP.

6. Empowered Employees: Best Practices and Technology

Best Practices

  • Empower your people: COVID-19 forced many to operate remotely, looking to the future, over 60% of millennials and Gen-Zs said they would like the option to work remotely more often. “Trusting employees to manage their own productivity – including their learning and development – will incentivise them to perform,” comments SAP.
  • Listen: encourage ongoing dialogue between managers and employees, inviting regular feedback to ensure people feel they are being heard.
  • Know your purpose: among the top-performing companies purpose and meaning in work are top drivers for generating engagement.

Technology

  • Modern cloud-based human experience management (HXM) software
  • Automation
  • Chatbots
  • Machine learning
5. Useable Insights

Insights – the lifeblood of not just manufacturing, but any organisation, large or small. “They enable you to meet and even predict customer needs, satisfy your employees, and anticipate disruption. Needless to say, those businesses that had insight into their supply chain or could forecast or trace a spike in demand for certain products prior to the pandemic – and could mitigate the disruption – will have fared better,” commented SAP.

However, data and analytics continue to be a weak point for mid-sized organisations, with 15% reporting a lack of adequate data as a top barrier, and 31% an inability to gain insights from their data.

“A major challenge to becoming a data-driven business involves getting employee buy-in. Data needs to be seen as a prerequisite to all decision making, not a nuisance or an afterthought. Similarly, if your business does not have the infrastructure to allow cross-functional teams to share and access data freely (and securely), insights become siloed and lost,” says SAP.

“Finding the skilled workers capable of harvesting and analysing vast quantities of data is another barrier to the insight-driven organisation. And even if your business has an analytics solution, not everyone will have the data literacy to make sense of it.”

4. Usable Insights: Best Practices and Technology

Best Practices

  • Create a single source of truth: consolidating all data into a ‘single source of truth’ reduces silos, boosts productivity and streamline processes with easy access to accurate information.
  • Broaden your search: while many tools used already have analytics dashboards built-in, external channels can also generate reports that may reflect a broader perspective.
  • Increase literacy:  be clear on how data can influence decision making. Work with stakeholders to eliminate cultural resistance and train employees in basic data visualisation and analytics.

Technology

  • Cloud-based analytics software
  • Data management solutions
3. Smooth Process

“Processes are the mechanisms by which businesses run. That’s why inefficient processes can have such a detrimental impact on organisations of all sizes,” explains SAP. “For example, without the IT budgets and the sophisticated tools of your larger competitors, it can be a major challenge to get visibility into the supply chain, which means less insight into bottlenecks and potential disruption.”

As a result this can lead to outdated insights, as well as inhibit diverse critical thinking and slow down decision making. With many mid-sized businesses still relying on manual processes, relying on large quantities of spreadsheets and reports, 67% of mid-sized businesses consider freeing employees from mundane tasks a top goal.

2. Smooth Process: Best Practices and Technology

Best Practices

  • Investigate: it is important to understand the frustrating processes for customers and staff, where delays are happening, and how they can be resolved.
  • Improve communication: to empower people to share ideas and knowledge safely and compliantly, adopt collaboration tools and platforms.
  • Automate: aim to reduce time spent on administration, in order to free up employees for more meaningful tasks.

Technology

  •  Enterprise resource planning (ERP) system
  • Real-time integrated data and insights
  • Artificial intelligence (AI)
1. Holistic Approach

“Companies that can optimise and connect the four pillars of business – Customers, Employees, Insights, and Processes – using best practices and powerful technologies are better poised for agility, people-centricity, and data-driven decision making,” concludes SAP.

By harnessing this holistic approach manufacturers can facilitate “exceptional experiences and resilience” to differentiate an organisation from others and increase their competitiveness.

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