Major manufacturers, like Siemans and Daimler, have been at the forefront of Industry 4.0, driving growth through pioneering smart factories. In comparison, SMEs have been slower to digitalise their systems – however, they won’t be able to stand still for much longer, says Andy Brown, from supply chain technology specialist Access Group.

Futuristic-looking smart factories seem a world away from many small and medium-sized manufacturing plants, though they are rapidly becoming more commonplace. Across every sector, from aerospace to food production, computers and robots are replacing the hands-on jobs humans once did, increasing accuracy and pushing down costs.

Until recently, companies further down the supply chain may not have given digitalisation much thought. But industry forecasts suggest that Tier One manufacturers, who wield the most power in the supply chain, won’t work with firms who use spreadsheets and paper for long. Sooner or later, they’ll demand integrated processes to track every component and make sure it meets their rigorous quality standards when it arrives on site.

Without a complete audit trail – containing all product information, testing and sign-off – the next factory is likely to reject the component, since any defects would lead to operational delays and lost revenue. This means suppliers face missing out on future contracts, not to mention reputational damage.

The only way manufacturers can assure full traceability is by transferring data electronically using industry-standard systems. As well as product information, suppliers are increasingly expected to send documents, like purchase orders and invoices, via an Electronic Data Interchange (EDI) to speed up administrative tasks and ensure prompt payment.

One common misconception around Industry 4.0 is that the cost of kitting out a factory is beyond smaller companies. While not every manufacturer will become fully automated, technology allows SMEs to act like bigger factories, using business intelligence (BI) to automate key tasks such as ordering materials and collecting shop floor data.

Far from being a cost-burden, today’s software can be scaled according to the size of the firm and deployed rapidly, helping to reduce time-to-value. Taking Access FactoryMaster MRP as an example, production managers could choose a core package to start with and add more modules as the business grows.

This should be welcome news for those who have been living with the legacy of bespoke and out-dated software. On top of being expensive to develop, old products require updates to remain secure and often rely on the expertise of just one or two in-house technology specialists. Newer solutions, in contrast, are recognised and used throughout the sector, undergoing continued development to eliminate security threats.

More broadly, software can improve workforce capacity by freeing up production managers to run the factory. Rather than rolling up their sleeves and getting involved in assembling orders or operating machines, they are able to focus on scheduling jobs, cutting costs and overseeing operations – all of which help boost productivity.

In a global economy, UK manufacturers must work harder than ever to compete with both their domestic and overseas rivals. Although the level of digitalisation depends on the size and nature of the business, firms will have to adapt to give themselves the best chance of success. Tier One companies are driving these changes, which means anyone who wants to supply materials and components to them either directly or indirectly, needs to act soon otherwise they will simply lose out.

http://www.theaccessgroup.com/supply-chain-management