Want to build more revenue in manufacturing? Real-time monitoring is the key

Profile picture for user louis.columbus By Louis Columbus January 21, 2019
Summary:
Manufacturers face global competition and pricing pressures in 2019. But some are thriving. How are they pulling it off? Louis Columbus of IQMS reveals customer views on the impact of real-time monitoring.

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With the start of the New Year, many manufacturers find themselves competing in a race against tightening delivery schedules, higher product quality standards, and the need to keep costs under control.

What are the defining traits that will characterize the winners in 2019 and beyond?

One big factor that our customers point to: capturing real-time monitoring and data streams to fuel analytics, BI and quality management.

We know these companies are set to grow 10% or more this year from looking at the patterns of high-achieving manufacturers identified in a 2018 research survey. Completed by research firm Decision Analyst on behalf of IQMS, you can download the full report here – How Manufacturing Technology Can Make the Greatest Contributions to Your Business Growth.

Finding competitive strength in real-time data

I recently visited several of the high-growth companies first discovered in the 2018 survey, and I can tell you that the energy and intensity they put into gaining greater insights from real-time monitoring are impressive.

A Chief Operating Officer (COO) of one of the world’s leading plastics injection manufacturers told me their plant was able to reduce reject rates from 30% of all products to just 2%. Combining analytics, BI and quality management applications with real-time monitoring gave her Quality Management Director and his team the insights to find out what was behind the exceptionally high scrap rates they saw across the plant floor.

With an entire wing of their plant capable of running lights-out for up to two shifts a day, introducing real-time monitoring has enabled this manufacturer to become stronger competitively and win more deals.

Real-time monitoring offers a detour from price wars

Last year began with severe price wars for an electronics consumables manufacturer who sells to the world’s largest automotive companies. Delivery timeframes were shrinking, quality standards were increasing, and it was getting to be a challenge to stay constant as a supplier to Ford, General Motors and other leading auto manufacturers. As I learned during a recent visit, the CEO acknowledges he competes in a price-driven commoditized business:

2018 has been brutal from a price competition standpoint, we had to find a new way to compete – and make every production minute count. We had to find a new normal for our operations, and real-time monitoring helped us define a stable roadmap out of the price war hell we were in at the start of 2018.

I asked him how he was planning to avoid price wars in a business that rewards price and availability first. His response:

Listen, real-time monitoring gave us insights into where we could trim certain costs on the shop floor by consolidating jobs more efficiently. But the big win was finding we were burning hundreds of hours a month with inbound quality inspections and audits.

Introducing a new strategy of competing by being the most transparent of all suppliers on quality and delivery dates made the difference. The goal was to create a strong bond of trust and go where no other supplier was willing to – full disclosure of exactly what was going on. He explains:

We shared aggregated data with our suppliers and gave them a detailed report of how long it took to fulfill their orders and the quality levels achieved…

We held our ground on pricing by mid-2018 and started growing again – and we attracted new customers with our new open approach.

This supplier’s intensity and drive to excel by working hard to create a bond of trust with its customers is typical of the behavior we see in companies growing 10% or more today.

Track-and-trace for the win

Every manufacturer needs to find the time to excel at track-and-trace, and in several manufacturing sectors it’s now a regulatory requirement for operating. Finding new ways to excel as suppliers is another area where real-time monitoring sets apart the manufacturers growing 10% or faster.

They’re incorporating real-time technologies and applications throughout their supply chains, capturing and capitalizing on the data using analytics and quality management applications to find where time and dollars are leaking out of supplier operations.

The best track-and-trace results come from real-time data. One manufacturer who is a supplier of baking, cookies and confectionary products throughout the Midwest uses track-and-trace for health and safety compliance. It is also using track-and-trace through its distribution channels to track the location and condition of shipments to each customer. This is a small, family-run manufacturer who’s been fortunate enough to stand taller than their larger, more diverse global competitors.

The secret of their staying power? They are doubling down on relationships combined with real-time monitoring and analytics, coupled with an intensity around quality that has to be seen to be believed. The founder’s son and Vice President of Operations says:

The majority of our customers started with my parents four decades ago and made this business possible. Serving them is like serving family – and that’s what every person who is working on their orders knows.

We needed to find new ways to excel as a supplier and hold onto them. Real-time monitoring data driving our analytics and quality systems is making us stronger – more able to serve them.

Conclusion

Manufacturers on a 10%+ growth pace for 2019 are off to a strong start. They see real-time monitoring as the rocket fuel they need to drive more revenue. As these examples illustrate, each has their unique motivations. But the intensity to excel as a supplier is shared across all of these manufacturers.

From finding greater competitive strength in real-time data to battling and winning price wars, the record shows that manufacturers who succeed are applying data in ways we couldn’t have imagined even a decade ago.

Bottom Line: Manufacturers who are growing 10% or more a year share the trait of defining a roadmap for integrating analytics, Business Intelligence (BI), real-time monitoring and quality management to excel as suppliers in 2019 and beyond.