The economy struggles with successive crises. The hope of being able to breathe easy after the pandemic was short-lived. Companies already weakened by the pre-crisis now have to deal with other challenges: rising energy and raw materials prices, existing and new supply bottlenecks, and inflation. Increasing interest rates on financing are an additional burden for companies.
The future promises new existential concerns. Therefore, preparing yourself and positioning yourself flexibly as an entrepreneur fosters sustainability. As new core technologies form the digital transformation basis, read this article to discover inspirational use cases in manufacturing.
Manufacturing Industry Challenges
First, let’s look at the manufacturing industry as a whole. One of the latest Forbes researches has stated that over 90% of manufacturing businesses have experienced the consequences of global events. Sourcing and introducing new suppliers became more complex. Some faced major issues with quality control and partners’ feedback.
Among the problems for companies and their consequences for the economic cycle are the following:
1. Energy Crisis and Rising Commodity Prices
The rising energy and raw materials prices and trade sanctions are weakening the financial situation of companies. Possible rationalization plans for energy would also not bode well for the companies. Rising prices, transport problems, and supply chain disruptions indirectly affect many of them.
2. Delivery Bottlenecks and Transport Problems
Broken retail chains and delivery bottlenecks have been challenging companies since the coronavirus pandemic. The reason for this is weakening foreign business and fewer exports. In addition, the necessary raw materials are also lacking in upstream production processes, which is why companies at all levels fear that customers, suppliers, or business partners will abandon them. Not only the search for new partners, buyers, or suppliers may be time-consuming and costly, but also the increased warehousing with which companies try to combat disruptions.
3. Inflation Rate
More than half of investment and economic experts express concerns that the government’s attempt to fight inflation by off-balance-sheet financing may cause a recession. Ultimately, this effect affects consumers and entails a loss of sales for manufacturing companies at all value chain stages.
Therefore, the increasing costs for raw materials and energy and the fact that price increases are passed on to subsequent trade and economic levels often push companies to their limits. With that said, over 90% of companies increased their investments in digital transformation. Most of them agree that digital transformation is crucial to the manufacturing industry’s future success.
Why do companies consider digital transformation as a lifeline? The reasons for that are the following benefits of digital transformation:
- Real-time decision-making through deep insights
- Cross-departmental cooperation
- Simplified work steps for discrete manufacturing
- ML and AI-driven tools
For companies today, it is no longer a question of whether they need digitization to be competitive in the current business environment but of how quickly they can start with the digital transformation. And SAP software is one of the main pillars that help companies to go digital.
How SAP Supports Digital Transformation
Nowadays, SAP offers solutions covering customer-specific manufacturing processes. They can help companies reach the following goals:
- 20% increase in revenues
- 70% of business processes can be automated
- supply chain management is 2.5 more efficient
Smart technologies give businesses the tools they need to survive and thrive, especially in the Industry 4.0 era. It bolsters Big Data processing, analyzing, and possibly excluding the human factor completely.
Let’s look at the LeverX Group use cases to see SAP implementation in action.
SAP PLM Migration for a Dispensed Beverage Equipment Manufacturer
With SAP Product Lifecycle Management (SAP PLM), product-related data can be accompanied electronically throughout all life cycle phases. SAP PLM supports the following tasks:
- Program and project management
- Portfolio management
- Options configuration
- Product structure management
- Supplier selection and onboarding
- Manufacturing ramp-ups
The Project Scope
The customer’s product design changes provoked many challenges regarding the overall workflow speed.
The implementation of SAP PLM allowed for the management of data related to technical, business, and commercial products in the system since the creation of the object. System migration comprised three new features:
- Document change process. To do that, the customer needed a single data source to establish an efficient document management system. This enabled control over internal data, allowing for revisioning and real-time connection between SAP master data and documentation.
- Legacy software removal. The migration to SAP Enterprise Portfolio & Project Management. The solution allowed for creating projects, assigning resources, tracking time, and reporting and managing resources.
- Portfolio and project management upgrade. The expanded capabilities of the new system improved project resource management, timely project reporting, cost-efficient management, and smooth workflow.
The measures have reduced new product development and major customer request turnaround time in engineering services by 35%. The customer experienced 71% fewer minor customer request turnaround times in engineering services.
R&D and Engineering Modernization Using SAP ECTR
With SAP Engineering Control Center (SAP ECTR), all engineering data can be integrated into SAP PLM and linked to business data via the cloud or on-premise system. Thus, engineering processes based on CAD files are optimally supported. Subsequent processes are also directly integrated into SAP.
The SAP ECTR directly integrates with major CAD systems, making an additional external system the superfluous starting point for the PLM processes.
The Project Scope
The customer was a large consumer goods manufacturer in the USA. The existing CAD toolset was outdated and hadn’t enough capabilities for managing R&D/Engineering data and integrating with SAP. As a matter of fact, the system didn’t ensure consistent change management and was limited to specific R&D data only.
This resulted in unwanted downtimes and unnecessary spending of resources. It was necessary to use modern technologies and functionality to make PLM more efficient.
The LeverX Group experts integrated SAP ECTR solution. With the R&D data platform, locally generated product data and documents can be managed in a structured manner and linked to SAP objects. SAP is a single source of truth in this solution, which helps to avoid data silos and reduces the susceptibility to errors and the effort involved in data maintenance.
SAP ECTR allowed for a 40% rise in revenue, faster response to consumer demand, and a better design process.
SAP Implementations for Enable Injections
Enable Injections specializes in developing and manufacturing wearable devices. These devices expand the possibilities for self-monitoring of patients during treatment.
The Project Scope
The legacy manual processes were unacceptably time-consuming and challenging to upgrade timely. Moreover, the company needed a best-practice ERP system to ensure expensive drug traceability throughout the product lifecycle. Also, the silo approach created critical communication delays.
LeverX and Enable Injections have been partners since 2018. LeverX helped implement the following ERP system submodules over the past five years:
- Material Management
- Sales and Distribution
- Productions Planning
- Document Management
- Plant Maintenance
- Quality Management
Automating manual processes allowed for Enable Injections’ improved performance, ensured the ability to track products across the entire lifecycle, and ensured regulatory compliance.
SAP PLM Migration for a Medical Device Manufacturer
The customer was a major manufacturer of medical treatment systems. The company produces and develops treatment tools for hair removal, skin revitalization, scar reduction, gynecological health, body contouring, and more.
The Project Scope
The medical device industry is highly regulated, so LeverX Group offered SAP PLM integration to keep data safe and well-ordered. The system included: data management processes for materials, Bill of Materials (BOM), changes in document management, material classification, and BOM redlining.
The result was a unified system that significantly simplified management, reduced maintenance and support costs, and minimized manual work.
SAP YL Implementation for the Floor Transport Load Planning
SAP Yard Logistics manages, controls, and simplifies the transport processes and vehicles on the factory premises (yard). Graphic 2D and 3D visualizations enable monitoring and visualization of the current situation on the factory premises. It helps to set time slots and ramp booking with SAP Dock Appointment Scheduling, plan yard activities, determine location, and more.
The Project Scope
The customer was one of the biggest truck manufacturers that faced multiple issues during shipping and a lack of transparency in tracking forklift movement.
The LeverX team analyzed data flow between business and technical departments, and configured and adjusted the SAP Yard Logistics solution. This included implementing the following modules:
- SAP Enterprise Resource Planning
- SAP Transportation Management
- Third-party GPS tracking solution
Finally, the customer could avoid unnecessary movements of forklifts, optimize task distribution, and increase revenue without unnecessary vehicle downtimes.
The transformative processes in the manufacturing industry cover many aspects: workflows, processes, the energy consumption of factories and production facilities, sustainability, and the entire supply chain. And not only that. Reach out to a trusted SAP provider and use a starting point for entering Industry 4.0 for your company!