What is Digital Manufacturing and What are the Benefits for Early Adopters?

What is digital manufacturing? It is about using digital technologies to improve the manufacturing process.

It’s become somewhat of a buzzword lately and for good reason. This approach helps manufacturers create a transparent and integrated supply chain that deepens data insights and increases efficiency.

Today, we’re diving into the specifics that forward-thinking business owners need to know.

Why Should Manufacturers Go Digital?​

Until recently, manufacturing was chiefly a manual industry. In many ways, it still is. However, recent advancements in AI and machine learning are starting to turn the tide. 

Digital manufacturing technology has been eliminating common pain points on the shop floor and beyond. This automation and modernization of traditional manufacturing is known as Industry 4.0.

By leveraging innovations such as real-time data analytics, smart tools, and wearable devices, manufacturers can improve product quality, expand their product offerings, and reduce development costs.

At the same time, they can design their business models to be more agile and flexible. This allows them to easily pivot and continuously improve depending on customer needs. 

Taking an Ecosystem Approach to Keep Up With Your Competitors​

In manufacturing terms, an “ecosystem” occurs when multiple entities join together to solve common challenges and meet common goals. 

In terms of digital manufacturing, this means adopting various technologies to address problems and identify new opportunities. It also means partnering with solutions providers to meet business goals and cater to customer demands. 

This is in direct contrast to an internally-focused manufacturing environment, where companies look to fill those needs without venturing outside of their current vendor relationships.

This isn’t a realistic approach considering the rapid pace of digital transformation, which is making it difficult for manufacturers to keep up. Operating within a smart manufacturing ecosystem is essential for succeeding within a shared environment. 

5 Benefits of Digital Manufacturing​

1. Safer Work Environments​

Put simply, a smarter workplace is a safer one. When manufacturers employ digital technologies, they can monitor conditions more closely and prioritize the safety of employees.

For instance, by investing in smartphones for all employees, companies can create and access safety incident reports much quicker than before. These reports are also more accurate than ones that are manually prepared. 

Similarly, certain wearable devices, such as wristbands or helmet monitors, can alert employees when they’re engaging in dangerous or potentially high-risk movements. This can help them avoid accidents, which reduces employee downtime due to injury.

2. Increased Productivity​

Any time you swap a manual process for an automated one, productivity naturally increases. 

Nowhere is this more evident than in warehouse monitoring where digital manufacturing is enabling real-time visibility across every warehouse checkpoint.

Users can access this data to understand equipment performance, perform predictive maintenance, and automate core processes. In turn, manufacturing efficiency naturally improves.

For example, IoT technology can bring actionable data to the forefront and alert managers in real time. Smart machines can also alert managers of impending maintenance needs.

To improve output even more, some manufacturers are opting to install large-scale digital solutions, such as Automated Guided Vehicles (AGVs). These are autonomous machines that can help transport inventory along a facility floor, without the assistance of an onboard operator.

Unlike a human employee, an AGV can operate around the clock. This helps companies improve output and meet spikes in customer demands. It also frees employees to focus on more highly-skilled tasks that need their expertise.

3. Improved Product Quality

Across the industry, manufacturers have widely taken a reactive approach to product quality. In many cases, defects and safety issues are only addressed after the product is on the shelves. This can lead to costly recalls and reputation loss.

With digital manufacturing, companies can take a more proactive approach.

Take augmented vision, for instance. While human eyes are limited in capability and can easily miss product flaws, digital cameras and visual analytics are much more thorough.

The same applies to smart tools and dashboards. These can be used to analyze the quality of large-scale products, such as airplanes or semi-trucks. Collecting and managing quality data on these products was historically costly and time-consuming.

Ultimately, with smart technology, manufacturers can streamline and simplify the overall process of data collection. This helps them identify even the most intricate defects, such as fixture issues, as early as possible. 

4. More Effective Training

Employee training ensures that team members can appropriately and safely operate equipment. Yet, it’s no secret that training can drain a company’s resources. Not only is the process laborious, but it can be expensive, too. 

Consider what happens when a manufacturer experiences a high rate of employee turnover. The company must repeatedly train employees on the same software and equipment. 

However, with augmented training techniques, business leaders can simplify the training process and reduce the associated costs. This approach involves using smart tools to help employees get a better “feel” for the technology at their fingertips.

These smart tools include digital technologies such as:

• Assisted reality
• Virtual reality
• Augmented reality

This greatly improves the onboarding and training experience by giving employees access to immersive, real-world simulations. Together, these experiences are much more effective than a PowerPoint.

5. Easier Product Customization

Whether you’re selling directly to consumers or to other businesses, you need to be flexible and responsive. Customer needs constantly change, and they expect quick response times.

Ten years ago, it wasn’t economically viable to produce smaller quantities of customized products. Now, this is faster, cheaper, and more scalable thanks to 3D printing technology as well as digital collaboration capabilities that streamline communication with contract manufacturers.

The Relationship Between ERP and Digital Manufacturing​

The masses of data contained in ERP systems become manageable when integrated with digital manufacturing technology.

For manufacturers, this means that users have instant, real-time access to an array of critical business data. These insights can help manufacturing companies achieve the following aims:

• Improved product quality
• Reduced lead times
• Ability to track raw materials
• Faster product design
• Better demand forecasting
• Increased equipment utilization
• Easier collaboration with suppliers
• Enhanced quality testing

Many ERP vendors have been quick to respond to the evolving needs of manufacturers. They’re building capabilities such as IoT, machine learning, artificial intelligence, and blockchain directly into their cloud offerings. Other vendors are using API to connect to external applications with these capabilities.

IoT is an essential component to integrate into your ERP solution as it gathers sensor data from the supply chain and provides actionable analytics on design issues, lead time, maintenance needs, inventory levels, energy consumption, and even the customer experience.

When looking for the best ERP system for manufacturing, you should assess their ability to aggregate data from key areas of your supply chain.

How to Make Digital Manufacturing Work for You

Rather than blindly diving into digital manufacturing, it helps to have a roadmap to follow. 

You may want to start by investing in small-scale projects that allow your team to test the benefits of the automated systems you’re eyeing. These projects can help you more clearly understand the business benefits that such technologies can provide.

To determine the right small-scale projects to pursue, we recommend collaborating with more than the C-suite. Work with technicians on the shop floor to understand their needs and determine which systems would benefit them the most.

Before embarking on any project, even a small one, it’s important to develop the skillsets that your workforce is lacking. We’re not just talking about system skillsets but more general skillsets, like big data analysis. After all, someone will need to be responsible for analyzing and acting on key insights, like factory floor business intelligence.  

Digital Manufacturing is the Future

What is digital manufacturing and what does it mean for your business? Digital manufacturing entails the integration of disparate systems, processes, and machines. This integration enables real-time data analysis and informed decision-making.

Few manufacturers have implemented all the technologies mentioned in this article, and even fewer have done so successfully. While fully digitizing and integrating your supply chain is an ambitious endeavor, manufacturers who move first will realize benefits unachievable for slower moving companies.

Contact our ERP consulting team below to learn how we can help your company achieve its manufacturing and supply chain management goals.