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How can Digital Technologies Drive Operational
Excellence in Manufacturing Industries

Manufacturing Companies Do Not Full...
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How can Digital Technologies Drive Operational Excellence in Manufacturing Industries


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Digital Tools Can Help Manufacturing Companies Cut Costs by 30%

Manufacturing companies have historically had an on-off relation with technology. Most have aggressively adopted traditional technologies such as Enterprise Resource Planning (ERP). However, they have been slow in adopting recent digital technologies such as big data analytics, real-time order confirmation, Web-EDI among others. Moreover, most have adopted technologies to varying extent creating a connectivity gap in their operations. We believe digital technologies will help manufacturing companies in eliminating this gap.

Our research and project experience indicate that by adopting digital tools, manufacturing companies can cut costs by as much as 30% by enabling savings on capital costs, labor field force among other key cost elements.

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How can Digital Technologies Drive Operational Excellence in Manufacturing Industries

  1. 1. How can Digital Technologies Drive Operational Excellence in Manufacturing Industries Manufacturing Companies Do Not Fully Leverage Technology 12% Only of manufacturing companies are digirati, companies that fully leverage digital technology. >30% of banking, insurance and telecom companies are digirati. The manufacturing industy is a ‘beginner’ in digital maturity. Fashionistas Digirati Travel and Hospitality Digital intensity measures how advanced digital initiatives are within an organization. Telecom High Technology Retail Consumer Packaged Goods Pharmaceuticals Digital Intensity Banking Transformation management intensity measures senior executives’ capability to drive change throughout the organization. Insurance Utilities Manufacturing Beginners Conservatives Transformation Management Intensity Research indicates that while manufacturing companies have invested in technologies, they have largely done this in silos. Only 38% of manufacturing industry executives indicated that digital initiatives in their company were coordinated across functions or regions. Digital Technologies Enhance Visibility of Manufacturing Operations >70% of manufacturers still use traditional methods of planning1 Integration of planning and execution tools enable organizations to Prevent unreasonable delivery dates 02 01 Create reliable order confirmation statuses Take existing capacity into account Form a feasible production order plan eliminating human intervention 03 04 Digital Manufacturing Processes can increase the quality of service by 30% Flow of Digital Data Simplifies Supply Chain Management 40% Over of supply chain executives believed that improving supply chain visibility can result in the organization gaining a competitive advantage2. The 3 major connectivity gaps in Supply Chain Management: Order • point of sales connection and immediate customer order reactivity • lack of inventory visibility during inbound transit, production and outbound transfer • absence of integrated supply chain Digital tools bridge connectivity gaps Over 90% of suppliers incur anywhere between 0-7% of their sales as additional costs due to forecast deviations3. Companies can achieve savings of over 20% in transport costs by using end-to-end planning systems and processes4. Digital technologies enable effective management of information flow i Integrated Business planning drives transparency In a Swiss manufacturing company, reliable planning reduced the additional transport required because of late deliveries, due to order Levi Strauss & Co. reduced manual tracking and tracing of inbound shipments by 98% by implementing a supply chain visibility platform. split, by 13% 4. Integrated Digital Supply Chain decreases inventory costs by 20% Field Service Becomes more effective using Digital Tools 54% 58% of organizations treated the Similarly, of organizations see service as a means to rise above competitive pressures from other manufacturing or service organizations5. service function as a profit center with clear profit and loss objectives in place5. 65% of incoming service requests require a field visit or a dispatch6. Digital tools help overcome Information Paucity 03 02 Digital tools drive overall productivity of service operations. Digital technologies provide multifunctional tools for field technicians. 01 Digital tools enable effective scheduling of field force. Kinetico cut its service resolution time into half, post the deployment of a cloud-based service management7. Digital Service Function decreases labor call handling costs by 40% How can organizations achieve operational excellence through Digital Transformation? 01 02 Assess Maturity Define Vision & Mission 03 Prioritize 04 Define Digital Process & Architecture 05 Fix Basics and Lay Foundation 06 Implement Sources: 1 The Association for Operations Management, “Material Requirements Planning in a Demand-Driven World”, October 2011 Capgemini Consulting analysis 2 Capgemini Consulting, “The 2013 Supply Chain Agenda”, 2012 3 VDA Study, 2008 4 Capgemini Consulting client 5 Aberdeen Group, “State of Service Management: Outlook for 2013”, January 2013 6 Aberdeen Group, “Field Service 2012”, February 2012 7 ServiceMAX case study Reach out: Interested in reading the full report? Visit Follow us on Twitter @capgeminiconsul or email