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DXC Eclipse The biggest issues facing Australian manufacturers today

The transformation of Australian manufacturing Manufacturing is one of ten industries significantly influencing Australia’s GDP. From 1974 to 2018, the manufacturing sector contributed an annual average of AUD 23 billion to GDP1. The sector employs around 810,000 people with manufactured exports valued at AUD 103 billion annually2.

Recent years have seen a slowdown in the sector. Many factors have influenced that change with two clear factors creating notable disruption: globalisation and technology.

Globalisation has driven a shift from cost-based to quality-based operations with emphasis on lean manufacturing and embracing Six Sigma principles. Access to a global supply chain has created the opportunity for some local manufacturers to outsource parts of their process which, in turn, has let them reduce inventories and free up investment. Others enjoy the benefits of manufacturing components locally, which are assembled elsewhere.

Manufacturing is one of ten industries significantly influencing Australia’s GDP...

The sector employs around 810,000 people with manufactured exports valued at AUD 103 billion annually2.

1 https://tradingeconomics.com/australia/gdp-from-manufacturing2 https://www.ibisworld.com.au/industry-trends/market-research-reports/manufacturing

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Technology and automation have rapidly reinvented the slow, manual assembly lines of the past. Today’s manufacturers use 3D printing to easily customise designs and speed prototype development. Automation makes assembly lines safer, faster and more accurate than humans. Collaborative robotics already augment human abilities and machine learning pilots are underway in many organisations.

DXC Eclipse, the Microsoft practice within DXC Technology, recently held a workshop series across Australia to explore the most pressing challenges faced by local organisations in delivering digital transformation initiatives.

Workshop participants discussed five core challenges to achieving digital transformation.

Close to 50 per cent of Australian manufacturers at the workshops rated “data to improve competitive advantage” as the biggest challenge to overcome to achieve digital transformation.

This white paper explores the core challenges Australian manufacturers are facing around digital transformation.

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Five core challenges for Australian manufacturers Faced with rapid advances in technology and globalisation, many manufacturers are realising current methods of operating are no longer viable. To maintain, and grow, their market position, more and more manufacturers are embracing smart manufacturing.

Smart manufacturing is a broad philosophical approach to manufacturing in which technologies and solutions combine to enable optimisation of the entire manufacturing process to increase profitability. Internet of Things (IoT) devices, sensors, robotics, machine-based learning, artificial intelligence (AI), digital twins, drones, blockchain and more all contribute to creating smart manufacturing environments.

Through conversations with current and prospective customers, DXC Eclipse identified five core challenges experienced by Australian manufacturers undertaking the transformation towards smart manufacturing:

1. Improving access to data

2. Enhancing the customer experience

3. Achieving competitive advantage

4. Optimising operations

5. Adding value to people and culture.

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1. Improving access to dataData lies at the centre of every successful manufacturing strategy. Manufacturers collect massive amounts of data, increasingly from IoT devices and sensors. Data generated from IoT sources is estimated to be growing 50 x faster than data from human generated activities3. Making sense of fast-moving data in multiple formats from multiple systems is a challenge for every manufacturer.

However, when collected, stored and transformed into insights via analytics, data gives manufacturers the opportunity to improve asset utilisation, product design, productivity and efficiency, demand forecasting, customer experience, waste management, safety and more.

Participants from the manufacturing industry at the Australian workshops described their biggest challenges to improving access to data as:

• difficulties accessing data across multiple sources, including legacy systems

• silos of information between business and IT functions

• inability to access data in real-time

• no single view of the customer across the business

• poor ability to extract insights from data and share them with stakeholders.

3 http://equalum.io/news_center/future-big-data-heres-means-manufacturing-iiot/

Data generated from IoT sources is estimated to be growing 50 x faster than data from human generated activities3.

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2. Enhancing the customer experienceCustomers in the digital economy expect a positive, consistent customer experience across an entire brand. Customers don’t distinguish between functions, so manufacturers need to be as ready as a sales representative to engage customers directly.

Increasingly, customer purchasing decisions are influenced by features, price and whether a brand is upholding good citizenship and using sustainable practices. With almost half the world’s population on social media4 researching brands 24x7, manufacturers need to be ready to deliver a positive, consistent customer experience and transparency to operations.

Consistently delivering positive customer experience challenges manufacturers because there are so many nuanced interactions that create an experience. Workshop participants defined the most common barriers to delivering positive customer experience as:

• poor understanding of the end-to-end customer journey

• disconnected customer data

• difficulties resolving customer issues quickly

• weak line of sight to production processes

• inflexible infrastructure to react quickly to customer needs.

With almost half the world’s population on social media4 researching brands 24x7, manufacturers need to be ready to deliver a positive, consistent customer experience and transparency to operations.

4 https://wearesocial.com/blog/2019/01/digital-2019-global-internet-use-accelerates

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3. Achieving competitive advantageGlobalisation and technology advancements have introduced significant pressure to Australian manufacturers from international competitors. Gaining competitive advantage on the basis of cost is no longer viable when competing with manufacturers in locations able to offer lower labour costs and greater efficiencies in scale. To compete globally, Australian manufacturers firms must adapt business models to optimise operations, connect with strategic business partners, reduce maintenance overhead and innovate to produce quality products faster than ever.

A 2019 Telsyte Australian Digital Workplace study found 68 per cent of Australian manufacturers rate being able to leap frog the digital strategies of their competitors and peers as “highly important”. Digital advertising and showrooms, technology-driven customer service, website development and lead nurturing can all help create competitive advantage.

Workshop attendees shared the most material challenges to achieving sustainable competitive advantage as how to:

• streamline the customer journey

• speed time-to-market with new products

• rapidly innovate to keep pace and get ahead of competitors

• integrate multiple businesses to a supply chain

• improve speed of service.

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4. Optimising operations Better utilisation of physical, digital and financial assets lets companies reduce costs across the manufacturing process. Greater automation increases efficiency and helps manufacturers run operations with fewer workers. Digital business platforms boost scale and speed. Real-time, or predictive, data-based analytics inform the business about efficiency opportunities, for example, managing maintenance schedules or predicting likely plant failure rates.

Manufacturing organisations at the workshops outlined several barriers to optimising operations including:

• lack of ability to track and understand true production costs

• poor insights to inventory management to better forecast demand, limit over-production and manage waste

• limited ability to take predictive actions, such as maintenance and safety checks

• inadequate insights to improve asset, process and team utilisation

• knowledge gaps to design a solution to “future-proof” the business.

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5. Adding value to people and cultureComprehensive real-time data flowing through connected systems, processes and businesses empowers employees to make faster and better-informed decisions. Organisations who nurture a culture that supports using data-based insights and analytics to drive decisions and actions have the potential to unlock cost savings, competitive advantage and productivity improvements.

Workshop participants discussed some of the most challenging obstacles to adding value to people and culture as:

• overcoming resistance to change

• managing change fatigue in teams due to the fast pace of evolution in recent years

• engaging teams to participate in designing future processes, workflow and systems

• how to integrate multiple legacy systems into a single, simple environment

• gaps around “not knowing what we don’t know” in planning for the future.

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Benefits for manufacturers from digital transformation Organisations that have successfully blended strategy and technology to transform their operations and align to smart manufacturing principles stand to realise material benefits, including:

• An established single source of truth: All stakeholders have a unified view of data relevant to the business. Conversations focus on strategic decisions, not tactical debate on the veracity of data. Self-service empowers employees to perform their roles more effectively.

• Optimise workflows and processes: The digitisation and integration of data, systems and operations enables faster, more precise identification of any underlying problems and reveals opportunities for optimisation.

• Improve productivity: Real-time insights clarify what suppliers need so manufacturers can finetune production. Insights from production lines, sensors and IoT devices reveal opportunities to sustainably improve productivity.

• Speed time-to-market with new products: Collaboration tools, video conferencing and 3D printing are just some of a broad range of technological capabilities that can be used to rapidly design, test and produce new products.

• Competitive advantage: Real-time data-based insights let organisations optimise operations for profitability and speed time-to-market with new, or improved, products to help retain existing customers and attract new customers.

• Faster, better decision-making: Whether analysing the source of downtime or prototyping new product lines, access to real-time data and analytics empowers employees to act quickly using meaningful, contextual information.

• Manage security threat and risk: Cloud-based data management creates the opportunity to add access controls and built-in security and risk management features to protect data and ensure compliance requirements are met.

• Reduce costs: Real-time analytics into data insights ranging from energy consumption, reasons for plant downtime and minimising the risk of penalties from overloads can help manufacturers manage costs.

• Stronger safety: Real-time connected smart devices create awareness on where safety-related failures are occurring, if machines are nearing failure or if workers aren’t following standard operating procedures.

• Business continuity: Business uptime is assured by the delivery of smooth, small, continuous software upgrades.

• Predictive modelling: Anticipating the future based on data trends from the past, combined with probability, is accelerating manufacturing operations globally.

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“Now that we have a cloud-ready solution that can scale up easily and quickly, we can start exploring some of the opportunities in new ventures. The technology implemented with this project is the backbone of the wider digital transformation of our business. With this solution, we really can do all the other things we aspire to...”

David De Jonge Chief Financial Officer, Pickles Auctions

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Case study

tna solutions tna solutions is a global leader in the manufacture of food processing and packaging equipment with 600 staff in six manufacturing sites across 30 global locations.

A series of acquisitions left the Australian manufacturer with a patchwork of information systems and fractured processes. Facing competitive pressure, the company needed to stay agile, keep a better pulse on rapidly changing customer needs, streamline and optimise operations and transform human capital management to empower its people.

To address these challenges and deliver the business’ growth plans, it was essential to replace the legacy enterprise resource planning (ERP) system. tna solutions embarked on a comprehensive information systems transformation and selected Microsoft Azure and Dynamics 365 as the supporting technology.

Pravin Singh, tna solutions’ CIO, is leading the business through the project.

He says, “We’ve never seen business at today’s pace. The challenge for us is to become more agile and more engaged with our customers to accommodate this new paradigm. Our ambitious growth plans were critical to choosing Microsoft Dynamics 365 as our platform for the future. It is the end-to-end, secure, cloud-based platform the business needs to further drive growth in the business.”

The first business process being transformed is tna solutions’ human capital management, with the deployment of Dynamics 365 for Talent.

There are four key pillars to effective digital transformation; engaging with customers, empowering employees, optimising operation and transforming products. By choosing to focus on talent management first, tna solutions is starting to empower its people and also optimise operations.

“Talent gave us the database, the security, the user friendliness. We got rid of all the third-party products and spreadsheets and brought it into one. That is what it gave us – the vision that we are after and all controlled.”

Singh explains that having a common database and comprehensive access to information across HR means that everyone can see everything as it is updated in real time.

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“The reporting capabilities of Power BI and the visibility that offers our teams is unparalleled and will propel our growth plans. Cloud-based software that transcends borders lets our staff access one single source of truth, so they are no longer working in silos or relying on manual processes.”

Pravin Singh CIO, tna solutions

The common view of data means tna was able to reduce five different appraisal systems into one. The company also plans to replace 27 different payroll systems with a single integrated payroll solution.

The Dynamics 365 integrated cloud-based solution is breaking down data silos to ensure tna solutions’ global workforce have a single platform with secure, anytime access to information and insights that enable collaboration and real-time decision making.

tna solutions’ focus in phase one is to provide the business with a single, secure stable environment that enables the business to manage the end-to-end manufacturing process and offers accuracy and transparency to help executives make decisions.

A longer-term plan is to arm field service teams with devices that have all the information they need at their fingertips so they can engage more closely with customers and deliver greater value in the field.

Singh adds, “We are excited about providing the business with critical information around cash flow, business processes and targets, all from a single system. Microsoft Dynamics 365

delivers all of this functionality out-of-the-box. The reporting capabilities of Power BI and the visibility that offers our teams is unparalleled and will propel our growth plans. Cloud-based software that transcends borders lets our staff access one single source of truth, so they are no longer working in silos or relying on manual processes.”

Besides Dynamics 365 for Talent, tna solutions has also rolled out other Microsoft cloud-based productivity solutions across the world, including Office 365, Skype for Business, and Intune, to bolster mobile access security.

In the future, tna solutions plans to integrate its existing customer engagement solution with its new ERP system, enabling its sales team to coordinate with the rest of the business, capture leads and make proactive offers to customers. Dynamics 365 CRM and Field Services are next to be deployed, followed by Dynamics 365 for Finance and Operations.

“Using Microsoft Dynamics 365, we will be able to assess situations faster, share information, and make rapid decisions to stay ahead in a dynamic environment,” Singh concludes.

Solutions for smarter manufacturing Smart manufacturing solutions offer companies the opportunity to design innovative products faster, improve efficiencies and sustainability and manage supply chains and value networks more effectively.

Fundamental to building that capability is a central repository of deep, accurate customer and operation data. Cloud-based data warehousing supports real-time views of data, integration of diverse data sources, powerful business intelligence visualisations and a single source of truth for decision-makers. Securely, and on any device.

Microsoft Dynamics 365 is an integrated cloud-enabled, software-as-a-service suite that combines Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) with additional features including Microsoft Power BI, Microsoft Flow and Microsoft PowerApps to give manufacturers the ability to grow, evolve and adjust to the needs of their dynamic business environment. Dynamics 365 Enterprise Edition provides a common data model that delivers powerful, integrated functionality including Financials, Sales, Customer Service, Field Services, Project Service Automation, Marketing and Operations. This edition is best suited for mid-tier to large organisations with complex manufacturing requirements and require advanced analytics, or companies with a multi-entity, multi-language structure.

Microsoft Dynamics 365 Business Central is tailored for small to mid-sized organisations with fewer than 250 employees and is a comprehensive all-in-one business management solution offering an end-to-end view of the manufacturing business. Easy to use and adapt, this solution helps manage financials, sales, service and optimise operations. Cloud-based, Business Central is wells suited for growing organisations as it scales easily and offers direct integration with the Microsoft suite of productivity tools including Office 365 and provides a modern and familiar experience with built-in insights, intelligence, and workflows.

Microsoft Power BI business analytics software is available across a range of business applications and can access data anywhere it is housed, in whatever format and whether structured or unstructured. Using hundreds of data sources (including data from IoT devices), rich, interactive, real-time visualisations are created with an interface simple enough for users to drag-and-drop inputs to design their own reports and dashboards.

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About DXC TechnologyAs the world’s leading independent, end-to-end IT services company, DXC Technology (NYSE: DXC) leads digital transformations for clients by modernising and integrating their mainstream IT, and by deploying digital solutions at scale to produce better business outcomes. The company’s technology independence, global talent, and extensive partner network enable 6,000 private and public-sector clients in 70 countries to thrive on change. DXC is a recognized leader in corporate responsibility. For more information, visit www.dxc.technology and explore thrive.dxc.technology, DXC’s digital destination for changemakers and innovators.

© 2019 DXC Technology Company. All rights reserved. DG_2213a-20. June 2019

DXC Eclipse Every manufacturing operation is unique. Yet nearly every manufacturing operation is facing pressures from globalisation and rapid advancements in technology. Today, manufacturers need to embrace transformation to remain competitive and relevant.

DXC Eclipse, a practice within DXC Technology, helps manufacturing organisations make that transformation to achieve competitive advantage. Leveraging its deep industry expertise DXC Eclipse helps manufacturers design long-term strategic plans and align the best technology to those plans to improve efficiency, enhance operational visibility, exceed customer expectations and reduce cost.

Partnering with Microsoft, DXC Eclipse has an established record of helping organisations successfully transform their business. Whether the transformation requires migration, new implementations or upgrades, DXC Eclipse has the team to deliver the best possible results with the Microsoft platform. Together, Microsoft and DXC Eclipse provide an ideal partnership to deliver real-life solutions to transform manufacturing organisations and create a path to continued success.

For more information around how DXC Eclipse and Microsoft Dynamics 365 could transform your manufacturing business visit www.dxc.technology/au/eclipse.

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