The Future of Manufacturing: Sustainable Business Models, Improved Supply Chain Planning, and Factory Floor Automation

Long gone are the days when most issues manufacturers faced were localized, temporary, and fixable. The challenges companies grapple with now – such as pandemic-driven supply chain disruptions, resource scarcity, a shifting regulatory environment, and climate change – are global, longer lasting, and more complex. 

In response, manufacturers are making changes to adapt: 

These SAP Insights articles examine what manufacturing leaders should expect today and in the future. Read on to learn more. 

Image for The Future of Manufacturing: Sustainable Business Models, Improved Supply Chain Planning, and Factory Floor Automation. A factory worker surveys the future factory floor.

The hidden bonus in sustainable operations 

Service, please… With overconsumption threatening the future availability of natural resources, more manufacturers are doing what some have been working on for decades: make a product once and have it used many times by multiple customers. Today we think of this as a circular business model. The bonus? Manufacturers get new revenue streams by creating services for their products. 

See why running in circles is sometimes a good idea in “A Circular Path to Sustainability for Manufacturers.” 

Keep it moving, sustainably. With a call to run all businesses more sustainably,  delivery and logistics are obvious paths to implement green measures. A mix of technologies used in combination – solar panels on refrigerated trucks, paperless warehouses, and real-time data and routing software to minimize fuel consumption on delivery routes – can make this element of the supply chain less carbon-intensive. 

Keep the environment and your customers happy with “Sustainable Logistics on the Move.”

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The supply chain seers 

The future of production planning. There’s a problem with traditional demand forecasting: it relies on historical data, and that data isn’t updated frequently enough. The experience of forecasting demand during the prolonged COVID-19 period made it clear that longer-lasting disruptions to the global supply chain have companies trying a  different demand planning approach – one that uses predictive modeling. 

Evolve your thinking by reading “The New Era of Demand Planning.” 

“Glo-cal” supply chains. Businesses have to manage a lot of surprises, from extreme weather events to geopolitical turmoil. Companies that shift some of their global supply chain closer to their customers can respond more quickly to unexpected changes both in the world and in their markets. Global supply chains won’t disappear, but some companies are creating more balance between global and local. 

What’s the right balance for your company? Learn more from “For Resilient Supply Chains, Think Local.” 

Look closer at risk. The pandemic led to massive shutdowns, then slowdowns, in every industry that relied on the global supply chains that were the norm for the past 30 years. New supply chain rules put a priority on risk management. This means focusing on the total costs of product manufacturing, from raw materials to distribution to the end customer. In other words, when slowdowns becoming more common, it pays to look more closely at each step along the path. 

Get the full list of rules here in 5 Supply Chain Truths for a Post-COVID-19 World.” 

What about product recalls? Another challenge with complex supply chain networks is that they aren’t designed to take back everything that’s been sold. Welcome to the wild world of recalls. Of course, before the fun begins, you need to first pinpoint the problem. The more partners in a manufacturing relationship, the more difficult it is for companies to assess varying qualities of raw materials, track down the source of a defect, and quickly alert customers to a problem. Manufacturers can absorb the hit better by improving access to real-time data, issuing mock recalls as a training exercise, reviewing their sourcing practices, and coordinating communications plans for customers and supply chain partners. 

Learn how to get recall-ready with “On the Path to Better Product Recalls.” 

Also see “Key Supply Chain Issues,” our guide to how businesses are building more durable, sustainable supply chains.

AR we there yet? 

Factory floor advances. Instead of lugging manuals around all day, some repair and assembly technicians are now using specialized glasses or a portable tablet to view the next-step instructions at their command. That’s the promise of using augmented reality (AR) in manufacturing. AR advances manufacturing by giving workers on-demand access to expertise that normally would take years of experience and education to gain. The most promising uses of AR bring improvements to business processes, including assembly work, repairs and field service, and designs of new manufacturing spaces. 

Find out what manufacturers need to consider before deploying the tech in Augmented Reality Goes to Work on the Factory Floor.” 

Field of nightmares. Field service management is getting less “fieldy.” Instead of sending technicians to customer locations – some of which are remote and downright inhospitable – to evaluate and repair equipment, companies are using IoT-connected devices, AI, and other advanced tech for predictive maintenance and virtual service calls. Everyone benefits: Customers avoid downtime costs; employees spend less time traveling between service locations; and the environment benefits thanks to the resulting lower-carbon footprint. These advances are also bringing new riches to companies that go from being just product vendors to being service providers. 

Find out what that means for you with “The Future of Field Service Management: Predictive Maintenance, Remote Repairs.” 

Seeing double. Thanks to their increasing affordability and ease of use, manufacturers are looking at ways they can use digital twins to improve their processes. Think elevating product designs by testing for what-ifs in controlled environments, providing predictive maintenance on machines to avoid costly slowdowns, and making businesses more sustainable by suggesting greener ways to source raw materials and ship products. But for twins to accurately mirror their physical doppelgängers and provide value, manufacturers will need data – lots of it, and high enough quality – sourced through sensors, the Industrial Internet of Things, and by sharing intelligence with business partners. 

Learn how to get started in “How Digital Twins Are Driving the Future of Business.”