What digital in manufacturing means

Think big and start small - Deloitte's P S Easwaran's advice to CIOs

What digital in manufacturing means - CIO&Leader

At the 18th Annual CIO&Leader Conference, PS Easwaran, Partner - Supply Chain & Manufacturing, Deloitte Touche Tohmatsu India, spoke about how CIOs can evolve their digital supply chains into value webs by collaborating with suppliers, engaging with niche players, and sharing and/or offloading assets

India's manufacturing is growing roughly at half the growth rate of China in terms of productivity. 'This gives Indian manufacturing company the opportunity for cashing in. What are the frameworks that companies are employing or deploying to get into a digital agenda within their own organizations and what CIOs need to look at going forward?” said Easwaran.

"We must think about three things in the context of digital in manufacturing," he said.

First, our ecosystem is changing. Most CXOs are not thinking about how the operations model is going to change with digital. Large OEMs focus significantly on product innovation, design development, and technology around that.

Second, innovation needs to become collaborative.

And third, businesses need to start thinking of alliances –not acquisitions.

Citing an example, Easwaran said that most companies today are grappling with the development time of a product, which is much longer than the time for which it is profitable in the market place. For instance, if the product is developed over a period of 10-12 months - it can only make blockbuster profits within six months. Therefore, organizations need to make a significant impact on product design and development.

Easwaran said that digital has made intervention in project related businesses where the ability to change their cycle/design/development time has come down drastically as a result of collaborative deployment. This opportunity is significant.

The other area where CIOs are looking at digital intervention is in the area of demand driven supply chain planning. CIOs want to know how can they have a flexible supply chain -- with same levels of service and flexibility - can they still optimise their costs?

Easwaran said the problem that most companies are trying to solve through a digital model is to move away from a homogenous supply chain planning model to a demand-driven supp chain model. In order to do that, Easwaran recommends five broad steps that CIOs must take to get started on their digital journey:

a.    Establish a digital foundry

b.    Thing big: Immerse yourself in innovation. Join an immersive experience (IoT lab) to explore the art of the possible, incite ideas and cultivate a culture of innovation

c.    Start small: Disconnect from the core business and set up a black ops team to enable disruption within an established organization

d.    Act fast: Use an agile, iterative approach to move from strategy to prototyping as quickly as possible - fail fast and achieve rapid results

e.    Build your ecosystem: Evolve your supply chain into value webs by collaborating with suppliers, engaging with niche players and sharing and/or offloading assets

f.     Pick one of the two plays: Prioritize your desired tactics and pick just one or two to get started in order to establish proof of concept

g.    Market your own success: Champion your successes to gain traction and achieve enterprise wide adoption

Easwaran also recommends on the following considerations that would prove to accelerate your digital journey:

1.    New workforce skills and capabilities

2.    Data analytics opportunity

3.    Agile systems development & deployment

4.    Reliance on ecosystem of supply chain and tech partners

5.    Cyber security risk

To summarise, manufacturing in India and manufacturers are at a critical point. While linear advancements have been replaced with exponential growth, productivity is still a major area of concern. Therefore, CIOs must think about the role of digital in converting their homogenous supply chain to digital supply chains.

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