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Home Industry Verticals Manufacturing

What a DX-sustainability combo brings to manufacturers

FutureCIO Editors by FutureCIO Editors
October 19, 2021
Photo by Los Muertos Crew from Pexels

Photo by Los Muertos Crew from Pexels

Since 2020, organizations across Asia/Pacific had to recalibrate their business models as every aspect of the operation was disrupted by the pandemic.

Covid-19 highlighted the weaknesses of the global supply chain, with production and distribution of essential goods halted as lockdowns were enforced.

Organizations will need to handle changes related to climate, shipping, and scarcity, compelling enterprises to re-evaluate their supply chain priorities as a matter of urgency.

DX investments rising

Having ascertained the indispensable role of digital resiliency to an enterprise’s survival, many organizations, including manufacturers, ramped up their digital transformation (DX) investments to achieve years’ worth of innovation over a period of months.

The IDC Manufacturing Insights Asia/Pacific report, Embedding Value Chain Redundancies Versus Upstream Visibility to Drive Resiliency in Asia/Pacific (Excluding Japan) Manufacturing, noted that 58% of the organizations surveyed indicated that their immediate focus is on increasing supply chain visibility to help create operational resilience.

Stephanie Krishnan

IDC Manufacturing Insights research director, Stephanie Krishnan, noted that supply chain and logistics are typically viewed as support roles, and as such, investment in these functions was associated with being a cost to enterprises.  

She observed that organizations now realize that enabling visibility and agility through connected systems can provide opportunities for competitive advantage.

“The necessity of digitally integrating functional capabilities across and between organizations is now apparent, highlighting that end-to-end visibility enables agility, improves customer experience, and can differentiate supply chains in normal and disrupted states,” she concluded.

Tech-driven supply chain

Ensuring technology-enabled supply chain visibility can significantly increase value chain effectiveness while mitigating market disruptions.

Key to boosting visibility and agility is the ability to derive value from supply chain data and facilitate actionability in real-time, aided by technologies like Internet of Things (IoT), big data and analytics (BDA), cloud, and artificial intelligence (AI).

Aside from enabling enterprises to leverage data, these technologies also allow them to better manage, track, and trace movements with the supply chain ecosystem. By the end of 2021, 60% of all manufacturing supply chains will have invested in the technology and business processes necessary for resiliency, resulting in productivity improvements of 25%.

The consequence of rising awareness

As awareness of the environmental impact of supply chain activities grows and influences government regulatory requirements, consumer pressure, and employee engagement needs, organizations have extended their transformation efforts to sustainability.

Sustainability initiatives vary, including increasing efficiency in energy usage optimization, adhering to regulatory compliance, emissions tracking, materials traceability, and circular economy considerations such as reverse logistics and disposal.

Transparency and traceability are crucial to sustainability, and the systems and technologies that support this lay the foundations for deeper insights and new opportunities.

Trending

While recent global events have reignited the clamour for sustainability, more than 50% of manufacturing organizations are already investing more than 10% of their IT budget on sustainability-related investment.

IDC Manufacturing Insights has found that manufacturers that combine digital transformation with sustainability efforts have higher revenue and profitability levels than their counterparts.

With disruptions resulting from capacity, economic, climate, and health expected to continue, enterprises need to prepare for new challenges and opportunities and build for future capabilities by capitalizing on technologies that have helped them survive the first year of the pandemic.

Related:  Data and analytics not as effective in delivering value
Tags: big data analyticsdigital transformationIDC Manufacturing InsightsInternet of Thingssustainability
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