Unveiling Digitalization: Reengineering the Value Chain of the Manufacturing Industry
“Digitalization of business practices in the manufacturing industry is not about one single solution; rather, it is the digitization of the entire value chain of the manufacturing process that fetches desirable results in the longer run.”
Digitization of business practices has become a new normal since the COVID-19 pandemic has hit the entire world. Almost every industry has adopted digital practices due to rapid digitalization that evolved due to the COVID-19 pandemic.
The pandemic that happened, the strict lockdown that followed, and the remote working which has become the new normal; has taken the entire world on an all-new ride which was not the case earlier.
This sudden digital shift was unprecedented. It made every business in all the industries across the sectors adapt to digital practices to cope with the challenges that the pandemic has brought and prepare for the uncertainties that await further unprecedented challenges.
Unlike IT & Consulting firms, where the adaptation to digital practices is comparatively more straightforward, manufacturing firms find it harder to adapt to digitalization.
Hence, digitization of business practices becomes of utmost importance in the manufacturing industry more than in any industry.
Bridging the Gap – Filling the Loopholes in Manufacturing Industry:
The manufacturing industry is the core of building goods. It deals with transforming the goods, repairing the goods, reinforcing them, and finally leading to a finished product.
Be it industrial goods, textile goods, consumer goods, food products or electrical equipment, metal products, pharmaceutical products, among others, the entire process that goes within the manufacturing process takes part in the manufacturing process as a whole; resulting in the whole value chain of the manufacturing industry.
The process of the value chain in manufacturing focuses on bringing a particular product to the market.
Essential activities such as acquiring the suitable raw material, process the acquired raw material; managing relationship with suppliers, negotiating the prices with suppliers, defining a cost model that fits the budget of the organization; among other, it all forms the entire value chain of the organization.
Hence, the amalgamation of such essential activities makes it imperative to digitize them; enabling the business practices to go digital and achieve digitalization.
Manufacturers, retailers, and service providers are investing in digital practices more than before. However, implementing these practices took long as the penetration of digital in manufacturing was not as quick as the IT & Consulting industry.
There have been loopholes in the manufacturing industry over the entire value chain. And hence bridging those loopholes across the units has become the primary concern to achieve the digitization of business practices in the manufacturing industry.
Reengineering the Value Chain in Manufacturing Industry:
Creating a well-defined Vision:
It is pretty common to have a non-clarity on the vision of achieving a common objective when the organization has a plethora of business units across the entire value chain undergoing the digitization of business practices.
Hence, creating a well-defined vision across the entire value chain aligning to the scope and objective of the organization leads to creating a well-defined Vision of the organization.
Data is the Key:
Data is the key these days. Almost every sector uses data to leverage the business opportunities it presents. While integrating the various business units across the manufacturing industry’s value chain, data also plays a vital role.
Furthermore, Supply chain initiatives, recording and analyzing the logistics practices; and feeding the information in the secondary functions like logistics, data remains the consistent factors to deliver the desired business functions with digitization.
Hence, efficient data exposure with robust effectiveness results in driving the most out of the digital efforts.
Leveraging Stakeholders’ Engagement:
Incorporating several business units comes with the risk of missing out on critical business practices; making it essential to engage with stakeholders.
Including one business unit often leads to missing out on another, especially when dealing with the digitization of business practices.
For instance, incorporating supply chain logistics did not necessarily comprise a finance or customer-facing component that often creates a gap between the business practices and the vulnerability of missing out on several stakeholders.
Organizations adopt experience-oriented approaches to ensure stakeholder engagement results in achieving the desired outcomes across their value chain.
Conclusion – Digitalization:
The above discussion points focus on bridging the gap, filling the loopholes; and reengineering the entire value chain of the manufacturing industry enables the manufacturing organizations to leverage the digital practices in their business practices across their value chain.
However, a customer-centric approach; the amalgamation of business units, inculcating data, and incorporation of stakeholders’ engagement are crucial to making the value chain of the manufacturing industry flourish. And it also helps achieve desired goals effectively with utmost ease in the longer run.
