Kathy Gibson reports from Reimagine 2015 in Johannesburg – The factory floor tends to be the last place that organisations implement cutting-edge IT systems – but there are many good reasons to do so.
Steve Rodgers, EMEA sales director for Microsoft Business Solutions, points out that one of the most compelling reasons is to attract top-notch engineering talent into the organisations.
“In all businesses, in pretty much all markets, there is an incredible battle for talent,” he says. “There is just not enough of the right skills in the marketplaces generally.
“I think manufacturers are still conscious of the fact they need to make their businesses attractive places to work. So, while there is often a level of conservatism, manufacturing owners are typically smart people who can see what they need to do.
“And those that can’t are typically going out of business,” he warns.
“You’ve got these organisations wondering how to attract the next set of top engineers, and the next generation of smart young people to work in the front office.
“So what they need to offer is a set of tools with a similar look and feel to what their potential employees are used to using.”
Rodgers adds that many companies last invested in manufacturing systems up to 10 years ago – or ever long longer – so there is a lot of scope for upgrading these systems to add performance and value.
“The business has the opportunity to upgrade core processes outside of a legacy core system. That could be something like the supply chain, or it could be where they augment collaboration – or it could be all of the above.
“We are seeing that some companies are willing to bite the bullet and upgrade their systems. Yes, the installed systems were great 10 years ago, but the world of manufacturing has changed almost beyond recognition. There is an opportunity for companies to do a step change, and look at new systems.”
South Africa is in a good position to do this, he says. The country has a strong manufacturing sector, but the number of new graduates coming through the system – or forecast to come through soon – argue that companies need to look at new ways of doing things, and start attracting fresh young talent.
He points to Germany which, until recently, was the world’s biggest global exporter, with the majority of the business built around the car and related industries.
But shifting population dynamics mean there are fewer students attending German universities and doing engineering degrees, so the pipeline for the engineers companies need to drive their economies is drying up and companies are having to look elsewhere for new engineering talent.
One solution to the people problem could be in reaching out to the larger population of engineering users, says Chandru Shankar, manufacturing and distribution lead: EMEA at Microsoft – and the cloud plays a major role.
“The new culture is app-based, and the factory user couldn’t care less what system you are using on the back end,” he says.
“With Azure infrastructure as a service (IaaS), companies can build apps that work regardless of what device the worker has, offering specific information depending on the worker’s job.”
Microsoft’s partner network is responsible for developing and deploying these specific apps on the Azure platform, Shankar says, ensuring that the different processes unique to different industries are catered for.
The specific needs of the South African market make the Dynamics solutions a real option, Rodgers says, as it is tailor-made to serve SME manufacturers in a cost-effective way.
Not only does Microsoft have a network of partners who can bring the products to all parts of the market, and specialising in various industries, but customers can now choose to use Dynamics either on-premise or in the cloud – or in a combination of both.
“We have to work on augmenting our routes to market,” he says. “There are a lot of instances where we are seeing customers finding a solution online, downloading if for a trail and then buying it. We need to think about what we need to do to facilitate that model; and to offer more assistance via partners if the customer needs it.”
In fact, getting an intelligent Dynamics service downloaded, installed and running in the cloud could take a customer as short a time as four hours, says Shankar. “If you want to get a single process running, it’s very possible to do it quickly.”
Enabling SMEs is high on Microsoft’s agenda, adds Karim Hanafy, Business Solutions ERP lead: EMEA at Microsoft, and the company has implemented its 4Afrika campaign designed specifically to enable SMEs on the continent.
“We have taken aggressive steps to reach out to SMEs and enable them technologically,” he says. “The programme aims to give them a solution for their industry at an investment point that caters to their size. The ability to lease the solution on a monthly basis makes it very attractive for SMEs to adopt the technology.”
But Dynamics is not just a solution for SMEs, although this could have been the perception sometime in the past, says Shankar.
“There used to be a perception that previous versions of Dynamics were better suited to the lower end of the market,” he says. “But Dynamics can now definitely scale from top to bottom and cater to just about any size implementation.”
“For instance, within Microsoft itself we have for 100 000 users on Dynamics AX.”
As companies in all sectors are faced with the joint threat and opportunity of digitalisation, the Internet of Things will start to play a bigger role in helping them to manage all their processes from end to end, Rodgers point out.
“If you look at most manufacturing plants, the number of sensors that they have existing machines could be in the hundreds or even thousands. Those components are already implemented and, with Windows 10, we start introducing the platform to consolidate all the data and turn it into information that allows organisations to run more efficiently.
“This could be by enabling proactive maintenance, improving warehouse layout or improving the way a process runs.”
The beauty of a system like Dynamics is that it is not purely a manufacturing system, but can extend into various parts of the organisation, says Shankar. “With Dynamics you can go beyond the manufacturing process,” he says.
“It’s interesting to see where companies are going with the data they can now harvest from the manufacturing systems. For example, JJ Foods in the UK has over 50 000 products on their catalogue, from paper products and dry foods to fresh items with a deliver-by deadline. They are not only using Dynamics to improve their logistics and supply chain, but have extended beyond their own organisation to pre-populate their customers’ shopping carts based on the intelligence they are able to glean from their customers.
The Formula One car manufacturer Lotus has a much smaller product line-up but, running Dynamics on Azure, has been able to tweak its parts and manage its manufacturing process more efficiently.
Dell Computers, one of the world’s largest PC manufacturers, can manage its manufacturing process so well that it will build computers according to customers’ actual specifications in a configure to manufacture model.
“Part of the capability of the solution allows you to do this product configuration up front,” says Hanafy. “Customers don’t want standardised products any more. Now, manufacturing can be based on what the customers wants; they can order literally one of something and this will be carried out on the factory floor.”
At least one furniture manufacturer is doing this as well; effectively offering customers one-of-a-kind pieces that are produced in the regular factory.
Intelligent systems, coupled with new technologies like 3D printing, can revolutionise supply chains as well, says Shankar.
“A car manufacturer may have retired a model years ago, but still has to carry parts in warehouses around the world. In a couple of years from now, however, they will be able to print the part out as its required.”
The bottom line, says Rodgers, is that the tools are now available to foster a new revolution within the manufacturing sector; with solutions available as services in the cloud or on-premise depending on the customers’ requirements.
“Two years ago it would have been fair to say that Microsoft had lost its cool,” he says. “Now, I would say that the company has got its cool back, with its re-orientation around the cloud and mobile service as a catalyst for future growth.”
The fact that Azure – which few customers had even heard about just a couple of years ago – is now the world’s biggest cloud provider after Amazon is significant, he adds. “And Azure is a completely open platform: there is no way Microsoft can now be accused of being a closed monolithic organisation.
“This is an exciting time to be at Microsoft, and to be a Microsoft customer. We are removing the mystery from our technology and taking responsibility for delivering solution-orientate products to the client regardless of what industry he is in.”