VP of Product, Sage X3
Manufacturing Solution Consultant, Sage X3
Digital transformation is allowing process manufacturers to build connected supply chains and forge closer links with customers
Q: How do you describe process manufacturing to distinguish it from other types of manufacturing?
A: Essentially, it comes down to putting different ingredients (a recipe or a formulation) into a process to make a finished product. Food and beverages, pharmaceutical and chemicals are key industries for process manufacturing.
You tend to get two different types of process manufacturing: ‘continuous’ and ‘batch’. In continuous, you have a line that rarely shuts down because a process is so expensive, like a foundry making iron or a refinery processing crude oil.
Then you have batch where, as the name suggests, products are made in batches and the key is to get it consistently right. If there is a problem, you need to know which batch it came from so it can be remedied. (RS)
Q: ‘Servitisation’ is a term often used in modern process manufacturing. What is it and what impact is it having on the industry?
A: It’s a fundamental shift as manufacturers realise their customers have moved from buying items to wanting outcomes.
Rather than, for instance, just wanting turbines, an energy company is buying the outcome of being able to provide a certain number of gigawatts of power. So, it is not just a case of combining materials to make turbines but also including a service plan that ensures the customer can consistently deliver what their customers need, without delay or problems.
We’re seeing a huge shift in how people work in the industry.
You can see the same trend across many industries. Companies are choosing to lease and have monthly repayment plans rather than massive, up-front outlays on assets. In business terms, it’s a move from capital expenditure to operational expenditure.
You see the same development with consumers in all walks of life where they are swapping making a purchase to leasing, for example, a car. Businesses and end consumers are all shifting from consumption to subscription. (IL)
Q: What effect has digital transformation had on the industry?
A: Process manufacturing is operating in the digital economy – or web economy as it’s often referred to – just like any other industry.
In the past, digital technology might have been used in the processes a manufacturer was running but, now, we’re seeing end-to-end digital transformation. Digital systems are being used across the supply chain to link up the various partners and anyone they may have subcontracted.
They are then linked to sales and marketing tools that track the products (and any accompanying services) being sold to the end customer.
Here’s where it can be really interesting because, once your systems can reach out to customers and let them in, you can start building long-term relationships. Rather than just sell somebody something and have them wait the agreed time for it to be delivered, you can instead give regular updates on the process of their order. It’s a great way of keeping customers involved and close to you. (RS)
Q: How is digitisation and servitisation affecting the work force in the process manufacturing industry?
A: We’re seeing a huge shift in how people work in the industry. Employers are worried about access to the best talent to overcome the skills gap in British industry – something that has been well documented.
The result is many manufacturers are no longer placing people in one role, they want to train them to do a wide variety of jobs. It’s a great way of making companies remain productive, because they’ve always got people who can cover for one another.
Someone could be running a process one day, or operating a machine, and then the next they’re talking to potential clients at a trade show.
It makes working in the industry a lot more enjoyable for people, too, because they get a wide variety of roles, so they’re not bored, stuck in one process always doing the same job.