UAE firms must make tech investments

The cloud is levelling the playing field, enabling even smaller manufacturers to leapfrog older, more established manufacturing players.

What's on tap for UAE manufacturers in 2017? Nothing but net (profits, that is) as manufacturers kick off the year with an optimistic eye to the future. It's an exciting time, with manufacturers gearing up for growth, investing in equipment, new manufacturing modalities such as 3D printing, and software to support digital transformation and new collaborative, connected factory floor competencies.

Expect cloud, the Internet of Things (IoT) and analytics to be key areas of technology investment for manufacturers in the region. While these were topics of conversation and exploration in 2016, manufacturers will move past the design and concept stage to full-on production execution and deployment of these technologies in 2017.

Cloud
Cloud is quickly becoming table stakes. Now is the time for manufacturers to put a cloud readiness plan into action. The cloud is quickly levelling the playing field, enabling even smaller manufacturers to leapfrog older, more established manufacturing players.

Aside from bringing about improvements in responsiveness, agility and costs, the cloud is helping businesses transform. As manufacturers shift from traditional on-premises systems to cloud-based ERP (enterprise resource planning), they are taking advantage of new capabilities to transform their business and optimise processes. What's more, it's enabling the surfacing of information from even the most far-flung and darkest recesses of the organisation and transforming this data into insights necessary to run and drive their business.

IoT - start small, start today
The application of Big Data and the IoT continues to offer growth opportunities as insights gleaned from various Internet-connected devices enable even more targeted customer engagement and business revenue channels as well as the ability to support operational efficiencies. The McKinsey Global Institute says that despite the immense potential factories have for value creation in the IoT era, an estimated 70 per cent of data captured in manufacturing goes unused.

While most manufacturers recognise the promise of the IoT, many - especially small and mid-market manufacturers - have taken a "wait and see" approach because IoT initiatives can seem daunting. They don't have to be. You don't need to boil the ocean; there's likely processes that can be IoT and/or cloud-enabled that represent low-hanging fruit in your manufacturing organisation. Start there (and start now!).

According to PriceWaterhouseCoopers, 55 per cent of businesses will see RoI from the IoT in two years or less. This means manufacturers who have begun to put the IoT to work may already be starting to gain traction with these initiatives.

Adapt for next-gen workforce
Much has been written about the so-called "Great Shift Change," as baby boomers head toward retirement and millennials continue to enter the workforce in droves. Today, more than one in three workers are millennials; they now comprise the largest faction of the workforce.

To this end, devising strategies to attract and retain millennial talent will be quintessential for business growth - especially given their digital savviness that can give businesses a big leg up in the new age of smart manufacturing.

Manufacturers must re-think their relationship with these digitally-literate workers and retool their organisations to leverage technology to motivate and empower this next-generation workforce. Business systems that are intuitive and accessible can assist millennials wanting to have an immediate impact in the workplace.

Millennials want to invest their time and energy in innovative organisations, and in positions where they can make a difference; they have little patience for waiting on month-end reporting to see if their contributions have moved the mark. They want real-time feedback which can be delivered via wearables/mobile, cloud, analytics and other enabling technologies.

Stepping up to 'servitisation'
In the past few years, we've seen the emergence of new disruptive business models and this trend will continue in 2017. For example, the emergence of the "distribu-facturer" where distributors - under pressure to provide more customer value - are now adding services such as light manufacturing or kitting and manufacturers are doing the same to extend their value by offering field service and maintenance options.

As organisations align their offerings to meet a wider array of needs throughout the customer journey, this creates opportunities to capture greater revenues and competitive differentiation. But as they branch out to serve a broader range of customer needs and get closer to the end-consumer, customer experience becomes more critical.

With globalisation and disintermediation, supply chains have gotten more complex and business more competitive. Supply chain visibility and responsiveness is key to know when there are deviations to plan and move quickly to ensure customer obligations can be met. Over the years, manufacturers have leaned out production processes and cut costs as much as possible. In 2017, the supply chain will be "the new frontier" for opportunities to lower costs, improve responsiveness and reduce risk.

The customer experience imperative mandates widespread collaboration and visibility across the entire manufacturing value chain. Shop floor operations and top floor operations must be connected. Siloed systems that stand in the way of a clear line of sight from the manufacturing floor to the finance office will impede organisations.

Manufacturers must be able to make sense of business data quickly to understand business opportunities and threats that must be addressed to support growth and profitability - and be able to answer key questions about their business such as:

>  How are we doing sales-wise, up/down, month-over-month and by territory?
>   What are the inventory levels, how much is in stock versus demand?
> What is the status of our outstanding accounts payable (AP), accounts receivable (AR) and cash flow?
>  How are we tracking on-time shipment performance, supplier/procurement scorecard, waste/cost on the manufacturing floor, etc.?

This enables course corrections and fine-tuning of go-to-market strategies, customer management, planning and inventory management and financial health.

Seize the day
Focused investments in the cloud, the IoT and analytics will enable manufacturers in the UAE to seize opportunities today and be prepared to embrace change and whatever the future brings.

The writer is senior director, international channels, Epicor Software. Views expressed are his own and do not reflect the newspaper's policy.