AI and Advanced Technologies for Manufacturing Scalability and Success
By Lisa Anderson
During volatile times of heightened uncertainty, companies typically batten down the hatches to save money and avoid rocking the boat. As the business outlook pivots to the positive within the next several months, demand will be stimulated, providing huge opportunities for those companies prepared to scale rapidly and serve customer needs. To take advantage of the opportunities to come, artificial intelligence and advanced technologies are required to scale up rapidly, maximize EBITDA and ensure customer success.
Business Outlook
US manufacturing has officially been in a recession for about 18 months — briefly going into expansion in January and February earlier this year, but quickly returning to contraction. It started with heightened inflation and a steep rise in interest rates that dampened demand, which then saw a decline in backlogs for companies across most industries. Three key factors are in play as firms look toward a path forward. 
First, US companies need tax rates that remain competitive across the globe. When the tax law was passed, it secured competitive tax rates and provided several advantages to manufacturers to encourage investments. Second, tariffs caused business instability when announced based on inflation concerns. However, as fears didn’t materialize and value-added trade deals resulted, business stabilized. Third, companies must have access to capital. With high interest rates, access to affordable capital is limited, further dampening demand. Interest rates are expected to decline in the next few months, putting the third leg of the stool in place, thereby creating a positive business outlook. When combined with substantial investments in manufacturing coming down the pike, manufacturers will go from bust to boom.
Prepare for Success
Companies that are prepared for success will be ready to take advantage of the opportunities as the three legs of the stool come into place. If you wait for certainty or your sales funnel to fill before moving, you will be left in the dust. As Newton’s law states, an object at rest stays at rest, whereas an object in motion stays in motion. Thus, smart companies will be upskilling their people, upgrading their processes, and rolling out AI and advanced technologies to not only prepare for success but also to increase their productivity, financial performance and value to their customers in the interim.
Start by rolling out the appropriate AI and advanced technologies that will support customer needs and help your company successfully deliver customer orders on time and efficiently. A modern ERP system is a must to support the basics and automate manual tasks. Beyond that, review what will best support your business. AI has been incorporated into most Customer Relationship Management (CRM) and sales forecasting systems to help increase your revenue, expand your customer base, and create predictable revenue. Advanced planning systems (APS) utilize AI to model constraints, optimize production plans and automatically incorporate real-time visibility. When combining SIOP (Sales Inventory Operations Planning) processes and supply chain visibility capabilities with APS systems, companies benefit with predictive ETAs (estimated time of arrival), insight into potential disruptions coming down the pike, and their AI-powered systems will automatically re-route and optimize customer performance while minimizing costs.
From a manufacturing process perspective, companies can get in front of machine breakdowns with predictive maintenance programs. AI-powered robotics systems can help companies scale rapidly with around-the-clock production without additional employees. However, these systems do not just start up and work on the first try. Companies must test, pilot, roll out, tweak and optimize systems so that they are ready to perform. In addition, companies can install automation and autonomous systems to scale up without adding resources. Simple camera systems can catch quality defects upfront, thereby minimizing waste and increasing output. MES (manufacturing execution systems) can optimize runtime and enhance your ability to scale.
Case Study for Success
An industrial products manufacturer was under pressure to meet volume commitments to meet revenue goals, but they struggled to find talent and the training curve required 6-9 months to achieve the appropriate skills to contribute meaningfully. Thus, they installed automation systems and robotics to allow their bottleneck operation to run around-the-clock without a third shift crew. These AI-enabled systems allowed them to scale production and meet their revenue objectives. In addition, their margins increased as production increased without a commensurate increase in cost.
The Bottom Line
As business growth is on the horizon, forward-thinking executives are embracing AI and advanced technologies to get ready to scale and support customer growth. There are several AI-powered options to automate, digitize and rapidly scale operations. Select a value-added priority and embrace the journey to utilize advanced technologies to support and ensure manufacturing success.
Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth.
