Most manufacturing companies now understand the benefits of having a business process automation strategy: increased efficiency, reduced time-to-market, decreased operation costs, to name a few. But recognizing those advantages and implementing a process automation strategy are different, and many manufacturers still struggle with the complexities involved in planning, executing and evaluating these strategies. Still, automation doesn't have to be difficult — the keys to a successful process automation strategy are evaluating production processes for efficiency, focusing on early payment opportunities, implementing platforms that are integrated, mobile, and user-friendly, and developing the performance metrics necessary to continuously improve the strategy.
Planning a manufacturing automation strategy should start with an examination of your entire business process in order to identify the procedures and tasks that are labor intensive, but add little value. This analysis can take the form of "activity-based costing," in which companies evaluate efficiency by examining which processes are involved in producing different products. Looking at production in terms of activity costs rather than financial costs can help managers determine which procedures are the most time- or labor-intensive; these tasks are prime targets for automation.
Manufacturers planning process automation strategies should also identify and set clear goals. For example, a process automation plan should seek to capture 100 percent of the early payment discounts available from vendors. Early payment also features into another common goal of automation: leveraging the ability to pay invoices early in order to secure better pricing from vendors and reduce total costs.
Of course, implementing your automation strategy effectively is as important as planning that strategy. Your solution should include features like user-friendliness, mobility and high-level integration with other systems. Ensuring your automated system is user-friendly is particularly important in an industry like manufacturing, which is more traditional (and therefore has fewer millennial employees, for whom automated processes tend to be more intuitive); as a result, your automated platform should be software anyone can use with minimal knowledge of the technology behind it.
Mobility is another critical feature of successful automation solutions; this includes making data easily accessible from handheld devices so that employees aren't tethered to their desks, searching for emails or scouring spreadsheets for information they need. Automation software should also integrate seamlessly with all of the systems in use by a manufacturing company, including ERP software, inventory management systems, product catalogs, and more.
Even after an automation strategy has been implemented, manufacturers must continuously measure the effectiveness of their strategy. That means defining their current baselines and the metrics they want to improve; these could include shortened product cycles, decreased lead times, person hours, or process costs. Once these baselines have been determined, manufacturers can develop key performance indicators (KPIs) to measure progress, such as the number of invoice lines processed per FTE period or the lead time from when an invoice is received to when it's matched and processed.
Nick Wong, one of our partners and a solutions consultant with Concur — which provides expense and invoice automation software — said: "We put a huge emphasis on reporting. Process automation can cost a lot of money, so we including features like "manage approval times" so you can establish your baseline KPIs. Users can identify every step in a workflow process as well as how long they're taking." Benchmarks and metrics don't just translate into best practices, they also provide concrete data to support your investment in process automation.
It's important that manufacturers understand that automation is a continuous process, not a one-time transition. By clearly identifying the metrics they want to improve and the KPIs used to measure their progress, you can ensure that your automation strategy continues to yield benefits long after its initial implementation.
Although adopting automated processes and implementing new systems can seem overwhelming, it doesn't have to be. In order to successfully plan, implement, and measure the success of a process automation strategy, manufacturers need to clearly define their objectives, implement integrated systems that are easy to use, and identify the metrics and benchmarks that will allow them to evaluate the effectiveness of their new strategy over time. With these components in place, process automation strategies can yield enormous benefits for any manufacturer.
Read my previous blog, Process Automation Strategies Add Enormous Value for Manufacturers
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