The ERP Thrust to an Industry 4.0 Ready Manufacturing Business

It is smart. It is connected. It is sweeping in a new age of industrial manufacturing and production while advances in physical production are bringing in advanced materials, automated machines, and newer technologies. It turns the spotlight on data and connectivity in the traditional bastion of manufacturing where physical objects held sway till now.

Industry 4.0 (or the fourth Industrial Revolution) promises significant ramifications for the manufacturing industry with its integration of machines, production processes, and systems. Connected data is all set to build smarter supply chains, more efficient manufacturing processes, and intelligent end-to-end ecosystems.

With a seamless merging of manufacturing operations and information technology, the call of Industry 4.0 is clear. It provides an intelligent continuum between data, analytics, technology and agile manufacturing. Technology enablers such as the Internet of Things (IoT), 3D printing, cloud computing, mobile devices and big data will, in this environment, bring together production and networking in a connected environment.

This will transform manufacturing companies to digital enterprises, with physical products at the core but driven by digital interfaces and data-based services in their interactions with clients and suppliers. According to a 2016 PWC research study the digital change is driven by (a) an annual average revenue increase of 2.9 per cent, (b) an annual average cost reduction of 3.6 per cent and (c) significant revenue growth through product and service innovation.

The role of Enterprise Resource Planning (ERP) will become the critical backbone for production in this transformational environment. Its potential to link smart machines, logistics, production facilities, sensors, and devices is immense, especially for the small and medium enterprises. ERP will play a game-changing role for them in leveraging the elements of Industry 4.0 in keeping their customers at the core, and customising their products, systems and services to both respond to customer needs and drive demand in an agile manner. Manufacturing industries need to move

Towards a greater connected world of manufacturing

to a digital ecosystem approach of partners, suppliers and customers. Data integrity, analytics, digital thrust, and strong risk management will need to be interwoven into this digital fabric for successful implementation of digital enterprise applications.

This places ERP in a central and critical position with respect to process manufacturing.

Augmented Reality at John DeereAugmented Reality helps John Deere to allow customers to test and provide feedback on early design concepts. Byletting their engineers use virtual reality simulations to design the air-handling subsystem on the JD 7760 cotton harvester, they reduced the design cycle time from 27 months to 9 months, and reduced design costs by more than $100,000.

1 https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/

industry-4.0-building-your-digital-enterprise-april-2016.pdf

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With digitisation in process manufacturing creating new connections and new data streams, the need for responsiveness is more critical than ever. The ‘smart’ factory is characterised by cyber-physical production systems (CPPS) and its ability to reconfigure production systems to changing needs.

CPPS’ network machines with each other to create a smart ecosystem of machines and related information systems (through sensors and other control elements) across the product lifecycle value chain. There is thus a constant and real-time sharing of information – be it current stock levels, demand or plant issues. It enables coordinating of processes to optimise throughput, capacity utilisation, and quality – simultaneously across R&D, planning, production, sales, marketing, and finance.

An Industry 4.0 compatible ERP system will therefore need to fully integrate with manufacturing execution systems (MES) to ensure that production control systems are constantly updated and the availability of resources throughout the entire supply chain is visible.

The blurring of boundary lines between ERP and MES systems is thus inevitable in the quest for greater integration of manufacturing operations. Fulfilment of tasks in MES systems and planning tasks in ERP systems will become interchangeable.

This calls for ERP systems to move away from pre-built interfaces and formulas and become highly connected systems. They must be capable of conducting operationsat the production line level while providing business decision-makers real-time data. Especially for small and medium enterprises, the right ERP environment can support them in their journey towards Industry 4.0 to achieve this level of integration with MES in a cost-effective manner.In assessing the readiness of their existing ERP for Industry 4.0. process manufacturers need to address the following aspects.

Flexible deployment optionsERP systems must be capable of adapting to new

opportunities, processes, workflows, data networks, and locations in real-time. Additionally, they need to be agile in terms of delivering solutions as a hosted model from individual data centres, on-premise, on the cloud, or as a managed service - or a combination of such options.

Compatibility to existing manufacturing execution processes This starts with upgrading the ERP to enable digitising manual paper processes of data collection. An efficient digital document management system eliminates manual errors while ensuring storage on secure servers with adequate access controls and encryption. Especially for the small and medium enterprises, it enables real-time integration and exchange of data and information in ERP applications with CRM, SCM and other systems, and aligns them together to business goals and outcomes. It also assures business continuity without downtime in the event of any disaster.

The ERP system of smart factories needs to align with their goal of enabling customer-specific and individualised production. This requires the ERP system to be ‘vertically networked’ to cyber-physical production systems (CPPS) for nimble responses to demand, supply, stocks, and related issues. With resources and products being networked, materials can be located anywhere in real time, processing stages can be tracked, and discrepancies proactively addressed.

Agility to provide modular flexibilityAn ERP system based on service-oriented architecture can customise and provide updates to business processes without impacting the code. This allows efficient centralised data management and real-time data processing for transparent and accurate business decision-making.

It also creates transparency and flexibility across different process chains – procurement, production, sales, and customer service. Customer-specific changes can be simultaneously made in all processes so that business

The role of ERP in the transformation to Industry 4.0

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objectives of quality, pricing, fulfilment, and risk are handled both collaboratively and dynamically, in real time and at all stages of the value chain.

Real-time collaboration and communication With data sharing becoming synonymous with Industry 4.0, ERP systems must look at real-time data synchronisation and uer-friendly access through the right infrastructure, device-agnostic channels, and intuitive dashboards.

How can social collaboration be achieved? How can social conversations be integrated from isolated third party systems in context with ERP data? These are questions that next generation ERP systems will need to address to enable inclusivity of external partners, suppliers, and customers in co-creating products with real-time planning, customisation, and inventory management.

Strong analytics and business intelligence (BI) capabilities If Industry 4.0 is to strongly link the planning and management functions, it rests on ERP to make process manufacturing truly intelligent through sophisticatedanalytical tools for planning, execution and evaluation of new business models. The modern ERP system will generate a data and information deluge for sure. Cutting through the details to extract meaningful insights is vital. Interactive dashboards that allow users to drill down information, and analytical tools that facilitate sorting through multi-dimensional data will thus be important requirements of a smart ERP system to improve performance and visibility. This will help business users and leaders to spot trends, gain insights, and identify opportunities early – and make informed decisions in adapting to market demands.

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As the manufacturing industry races on the Industry 4.0 highway, we have smarter assembly lines, innovative R&D, and technology-savvier operations. With new technologies invading the scene, manufacturing needs a vital application that will seamlessly integrate them and streamline efficiencies across functions and processes. ERP, if properly designed and deployed, can well be the key player in the smart manufacturing plant.

High efficiencies through collaborative integration With its core goal of providing actionable data and information, ERP for the next generation ‘smart’ factory will be architected with the Industrial Internet of Things (IIoT) - a system of systems that will automate and connect smart products, machines, and systems. It will be an intelligent network of systems that will autonomously communicate and control each other. Sensors fitted to products can analyse performance against multiple parameters and critical values. When this information is fed directly to the ERP system, updating of relevant specifications in real-time enables the design, engineering, and manufacturing processes to be continually improved for higher quality excellence.

Planning, production, procurement, supply chain, financial management, and business intelligence will all come together to achieve: Shorter product runs Faster deliveries Frequent customisation of complex products Granular visibility of supply chains for better

informed and quicker decisions Fulfilment of dynamic packaging and distribution

requirements Accurate forecast of change Immaculate product traceability Efficient asset management and maintenance

Smart ERP for the smart manufacturing plant

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Enhanced traceability in process manufacturingThough relatively new to process manufacturing the Internet of Things (IoT) is an inevitable reality – it is no longer the realm of larger companies but opens the door for smaller businesses as well.

Automated resource planningWith robotics poised to play a definitive role in manufacturing and warehousing, linking robots and their data streams to ERP systems will enhance robot performance for higher productivity in the areas of: Data entry, especially in dual or more systems Straight-through processing of inputs from

disparate systems Product design and material inventory Virtual integration between different systems at

the user interface level Rule-based tasks, data extraction, and reporting

While automation of ERP has transformed process workflows and data, next generation ERP will deploy intelligent automation to unleash greater advantages. It will deploy robotic process automation to manage workflows and respond to spikes and troughs in work volumes by queuing and assigning work without human intervention. By leveraging cognitive automation, ERP can go a step further to include unstructured data.This will result in enhanced accuracy, uninterrupted process flow and process-based compliance.

Next-gen ERP will leverage IoT to increase device-to-device communication and traceability through transactional data collected via sensors and scales. This will offer process manufacturing capabilities in a flexible, integrated package with high standards of quality management and traceability - from the raw material supply chain through to the finished product shipped to customers. It will also weave the required data for streamlined regulatory compliance for process manufacturers.

Cloud connected intelligence Becoming a smart and connected manufacturer requires the capability to share information throughout the organisation to make well-informed decisions in creating better processes to streamline operational efficiencies. Cloud ERP will be the ideal platform to achieve synchronisation of new capabilities and technologies, cost effectiveness and anytime, anywhere accessibility to data.

Such cloud-based ERP systems will unleash the power of manufacturing companies to access large amounts of critical data in real time at any stage of their supply chains. They will enable operations to be scaled up or down as required. Cloud-based ERP platforms with embedded intelligence and smart algorithms can proactively gather data and apply powerful analytics (including predictive analytics) to process it in real time for insights-driven decisions. Above all, it removes the disadvantages for the

small and medium enterprises. With its flexible deployment options (as either cloud-only or as a hybrid solution), organisations will spend significantly lesser amounts on infrastructure and maintenance, making it highly cost effective.

Smart, cloud-based ERP will be integrated with mobile technology to give anywhere, anytime access to data on any mobile device. It will integrate with IoT to transform the production floor to an automated state. It will leverage wearable technology to access live data and transactions through wearable devices, and convert such information to actionable intelligence. Along with CRM modules, it will provide a holistic view of customers and prospects to support customer relationships from quotes to after-sales service.

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As the manufacturing sector enters the digital era to create newer connections and data streams, responsiveness could not be more vital. Real time transformation of data and information from disparate sources to intelligent insights is critical for smart decision-making across all levels and functions, especially the extended supply chain.

Greater productivity, improved efficiency and higher flexibility form the signature of what Industry 4.0 promises to manufacturing. ERP is the critical hub for Industry 4.0 and the vital supply chain tool that can deliver all of them with unerring efficiency, thus freeing bandwidth to innovate. Rapid shifts in global markets and consumer demands place pressure on manufacturers for an ERP solution that accommodates all types of workflows, accommodates exploding volumes of data, facilitates social collaboration,

and remains scalable to integrate with newer technologies.The right ERP systems will help manufacturers forge ahead confidently in a disruptive landscape. The key lies in extending ERP’s reach to all functions so that its speedy ability to deliver holistic and accurate information helps businesses make smarter decisions to improve customer experience, cost savings, innovation and profitability.

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Forging ahead to smarter manufacturing

About ORION ERP ORION ERP from 3i Infotech is an integrated, cost-effective and cloud-enabled industry solution for growing and

mid-sized enterprises. Built on future-ready technology stack, it empowers organisations to optimise business

processes and make informed decisions through anytime access to dashboards and analytics. ORION process packs

are flexible and scalable solutions that cater to various industries. They facilitate rapid implementation enabling

businesses to continuously improve on efficiency and reduce operational costs. Backed by robust service support,

ORION ERP is a globally trusted partner to more than 800 customers with over 1,000 installations and 50,000+ users

across multiple verticals.

For more information, talk to us today. Send an email to: orion.erp@3i-infotech.com

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