Manufacturing's Highest Value Aligns with Automation

Manufacturing's Highest Value Aligns with Automation

Manufacturing is one of America’s most essential industries. From packaging consumer goods to producing life-saving medical devices, where would we be without it? At the forefront of every conversation surrounding this industry is automation. Automation is a tool to keep things moving faster and to reduce overhead costs. Keeping costs low is one of manufacturing’s highest values. But an alarming number of manufacturers are not using this tool to its greatest benefit.

Business as usual is an inherent risk for manufacturers. Particularly as it relates to lack of automation.

During business disruptions, one of the most important predictors of a manufacturer’s success is the technology they have already invested in. In a survey done by IndustryWeek, manufacturing survey respondents were asked how much their investment in technology influenced their ability to continuously operate despite disruptions. Half of the respondents said that automation was the reason the business was able to go forward.

Manufacturers who lead with smarter solutions withstand both market disruptions and unforeseen industry shifts. In summary, automation and the use of new technology will supplant the risk of being undercut by leaner competitors and products because they are future-proofed. Unsurprisingly, one of the first places mentioned in cost-cutting conversations around manufacturing is on the production line. It poses some questions: Where can redundancies be eliminated with robotics? How can output increase without additional labor? What materials can make a product viable at a lower cost? While worthy ideas, these neglect a larger reality that this same scrutiny can be applied beyond factory floors and assembly lines. It also belongs in conversations about the back office.

Business units like Accounts Payable are often overlooked for technology overhauls, and for good reason. It is one of the least visible units of any business. However, it has the same—if not more—impact on overall productivity than any other administration office. Accounts Payable secures valuable relationships to international suppliers. They ensure that the highest-quality materials possible are sourced from around the world, ensuring product and business lines stay profitable. Without stable and satisfied suppliers, production cannot move forward.

It’s important to use tools or solutions that employ capacities like remote working and digital meeting technology as a way to adapt to the reality of current work from home procedures. Even AP personnel struggle to get payments out the door for various reasons, some of which are:

  • The invoices are locked in filing cabinets at a different location
  • AP cannot reach suppliers for payment details
  • Stacks of late or remaining payments require physical signatures before they go out

These issues affect the integrity of the business, just like front-office limitations. It stands to reason that there is value in adopting automated processes for AP, like remote approvals, fully electronic payment options for vendors, and the ability for controllers to log into a single portal and verify reconciled vendor payments.

The habit of automating before old technology causes loss of productivity belongs to the best companies of any industry.

A wholescale commitment to automation is the mark of a business that has adapted to modernization, not by force, but by design. Loss of productivity is one of the top three concerns of those polled by The National Association of Manufacturers as the market disruption from Covid-19 had its grips on American markets in early March. Member companies of the organization cited that after financial and recession concerns, loss of productivity was a primary fear for 41 percent of respondents.

Manufacturers need to put every line of business and every practice under the automation microscope. Even counterintuitive places like AP deserve consideration, especially at a time in history where political or social events abroad can so easily trigger disruptions in the supply chain, stalled goods, and bottlenecks in goods ordered but not yet distributed.

Paying in a single large electronic batch instead of chasing disjointed approvals all over the office brings tremendous improvement to the productivity of controllers, AP personnel, and supplier relationships. Don’t underestimate the impact of earning rebates on payments that could be costing you more now, both in time and overall financial data security.

Manufacturers must keep with the industry’s highest value —keeping costs down in every business unit.

Manufacturing’s highest value aligns perfectly with automated solutions.  Learning to embrace digital solutions over manual ones is the first step to thriving in your industry. Now that many have converted to digital meetings and remote monitoring tools drive production lines, what tools may your back office still need for success? Banking on technology is a safe bet for success in every business unit. And while variables may be in flux around business demand or international markets, you don’t need to rely on those to predict the success of your manufacturing business. Automation will do that for you.

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