Consumer-goods companies have begun to capture value by applying digital tools to manufacturing. Here’s a look at how they’re doing this today—and how they might do so tomorrow.
Consumer-goods companies have been at the forefront of digital innovation in commercial areas such as marketing and sales. Supply chain and operations have been less of a focus for their digital efforts, but recently, leading consumer-goods companies have started to explore the use of digital solutions in manufacturing processes. This is a natural development; Industry 4.0 —the digitization of the entire manufacturing value chain—is slowly becoming a reality. 1 1.For more on Industry 4.0, see Matthias Breunig, Richard Kelly, Robert Mathis, and Dominik Wee, “ Getting the most out of Industry 4.0 ,” April 2016.
Some consumer-goods companies, however, are unsure where to start: Which aspects of manufacturing can benefit most from today’s digital technologies? And what should leading-edge companies set their sights on next? In this article, we examine the two most prevalent ways in which consumer-goods companies are using digitization in manufacturing: applying digital tools to lean transformations and using advanced analytics to optimize specific manufacturing processes. We then look at the next horizon of opportunity for digital manufacturing in the consumer-goods sector. Finally, we discuss the organizational enablers that can help digital-manufacturing efforts succeed.
Taking lean to a new level
Lean transformations have already had a dramatic impact on many companies, but digital solutions are taking lean operations to a new level. Consider the case of a food-manufacturing company that invested in lean techniques but didn’t have a standard process or system for collecting data, tracking performance, and sharing information. The company’s data—sales- and operations-planning data, machine-level data (such as those in sensors), benchmarks, operating standards for equipment, training materials, work plans, and so on—resided in several different databases and repositories, making it difficult for supervisors to find and analyze information. For instance, due to ad hoc tracking of equipment downtimes, supervisors never knew the exact quantity of goods produced until shipping time, when shortages could disrupt the entire supply chain.
Following a practice that has worked well in other industries, the company consolidated data and assets into a cloud-based digital hub. The hub contains three suites of tools to support day-to-day lean operations: a performance-tracking and management system, a set of modules for assessing operational capabilities and planning improvement initiatives, and a platform for best-practice sharing and real-time collaboration.
Supervisors can now access company-wide information on intuitive dashboards and heat maps, allowing them to detect performance gaps and compare metrics by product, site, and region. They can easily access detailed historical performance data or information on specific operational topics, such as the breakdown of overall equipment efficiency (OEE) by category. Since the hub automates data collection, data exports, tracking of key performance indicators, and generation of email reports, employees’ paperwork has substantially decreased.
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The digital hub also introduced a new culture of collaboration and continuous improvement. For instance, all functions now systematically track and share equipment-downtime information via the hub. The shared data enable more productive cross-functional discussions about production problems, including root causes and potential solutions.