The manufacturing industry is currently immersed in a world of uncertainty. Manufacturers are navigating market fluctuation, changing tariffs, workforce shortages and economic uncertainty while under pressure to streamline operations, protect margins and remain agile.
Tariffs and recent economic changes have especially posed new obstacles and opportunities for manufacturers. While tariffs brought increased costs and materials shortages for some manufacturers, others experienced increased demand and healthy financial performance. Regardless, tariffs created choppy waters for the manufacturing industry to navigate.
When it comes to these uncertain times, manufacturers benefit from the use and implementation of modern technologies such as enterprise resource planning (ERP) systems, artificial intelligence (AI) and robotic process automation (RPA).
The integration of these technologies helps manufacturers streamline operations, enhance communications, predict events and swiftly respond to change.
While these technologies have been discussed within the manufacturing world for years, the current landscape has introduced new pressures and obstacles that require manufacturers to modernize or be left behind.
The case for modernization
Most manufacturers are currently operating with legacy ERP systems, which still provide enough functionality for everyday operations, but they also result in siloed data, slower updates and limited analytics.
Additionally, legacy ERP systems can cause operator challenges. While a seasoned operator may understand the quirks and challenges of the system, a new operator may not be able to run the system properly, resulting in increased costs and downtime.
Legacy ERP systems require the transfer of tribal knowledge, which can result in bottlenecks for operations, especially as the current workforce continues to shrink and turnover.
Cloud-based and hybrid ERP platforms present a variety of benefits and tools to navigate the current uncertainty in the manufacturing industry. Modern ERP platforms provide real-time visibility to operators during production by continuously gathering data from machines, production lines and sensors across the factory floor.
This allows teams to detect slowdowns and bottlenecks and monitor production progress live. Additionally, a centralized ERP unifies data across all departments, combining information from inventory, procurement, scheduling and production.
Lastly, modernized ERP systems provide an unrivaled level of scalability for developing factory floors. Most ERP systems are developed as evergreen models, only requiring a couple of updates a year and making for easy integration with new technologies.
These systems are created as “basic building blocks” so that additional capabilities can be added to cater to the manufacturer’s specific needs. Legacy ERP systems lack this capability, requiring manufacturers to mix and match systems, making for a clunky integration process.
The perfect match: AI and ERP
In addition to a modernized ERP system, manufacturers looking to get ahead of the ever-changing landscape should also implement AI technologies such as machine learning and predictive analytics.
AI uses historical and real-time data across the ERP system to forecast future outcomes. One example of this is demand forecasting. AI can help anticipate product demand and provide visibility to optimize inventory and avoid shortages or overstocking.
Furthermore, AI will automatically trigger reorders or reschedule production orders when an unprecedented event arises. This capability is especially helpful in the time of constantly changing tariffs and ongoing supply chain challenges.
Implementing predictive analytics can help forecast when a machine could fail. Having this visibility can help operators perform predictive maintenance before the machine breaks down and results in unplanned downtimes. Predictive analytics can not only improve efficiency but reduce maintenance costs.
Working together: RPA, AI and ERP
In manufacturing, ERP systems act as the data hub, managing everything from finances to inventory to employee schedules. RPA, also known as intelligent automation, is the perfect complement to a modernized ERP system. RPA uses software “bots” to automate repetitive digital tasks that are typically performed by human staff.
These RPA bots interact with applications and systems in the same way that humans would, but without errors and around the clock monitoring. From back-office tasks like invoicing and reporting to data transfers, RPA can take care of these tasks within half the time without human error.
Taking these tasks off operators and workers’ plates allows them to use their time and skills for more complicated, strategic tasks.
In a time of major workforce changes, RPA is a gift for manufacturers trying to find skilled staff. Between staff turning over from retirement and the lack of skilled labor available in the current job market, RPA helps fill in a large and vital gap.
In short, when paired with a modern ERP system, the use of RPA can reduce costs, increase accuracy, and eliminate unnecessary manual labor.
Implementation considerations
Starting the implementation process of these technologies can feel daunting, but the short-term obstacles are more than worthy of the long-term benefits of a fully integrated factory floor.
Before choosing your systems and technologies, it’s important to identify the biggest pain points taking place on your factory floor. Is there an uptick in downtime? Are there detrimental inventory issues that slow down your production? What are the costliest parts of your production?
When choosing an ERP system, ensure that it is an evergreen model that also supports AI and RPA integrations. These solutions will be easier to scale and can be more customizable to meet the exact needs of your production processes.
The average implementation requires about 15-24 months to be fully integrated into production, but once they are implemented, they can continue to be scaled and developed for the long term.
Transitioning from legacy systems will require buy-in from stakeholders and employee training, so manufacturers will be equipped to make their case for a more modern future with detailed information around cost savings, increased efficiency and overall performance improvement.
What is next?
The time is now for manufacturers to take the leap into modernization. Though the changes to modern ERP systems, AI and RPA may feel overwhelming, these technologies will provide manufacturers with the resources and insights they need to confidently take on increased demands, workforce changes, and uncertain times.
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