Digital Transformation Strategy & Sustainability
Implementing a digital transformation strategy to help you reach your sustainability goals
Sustainability is the word the world won’t (and shouldn’t) stop shouting about, and from a corporate responsibility point of view, implementing a robust digital transformation strategy within your business could be a kind of ‘quick win’ in terms of the benefits it can bring.
By getting the right software - and subsequently the insight and data it offers - in place, industries including electronics manufacturing can go lean and green. Or at least greener.
As electronics manufacturers who have been around long enough to see significant changes in operational processes over the decades, the subject of sustainability within our own industry has become somewhat of a ‘pet’ topic over recent months – leading us to implement our own digital transformation strategy starting in September 2020.
We recently took a look the benefits of technology for driving progress in the global green agenda, the role of the electronics manufacturing industry in supporting that progress, and, ultimately, the contradictions that exist within that dynamic. Whetting our appetite for delving a little deeper into the story in order to (hopefully) advise and inspire other electronics manufacturing businesses to help us improve the industry’s sustainability reputation, it’s inspired us to drive into the digital technologies that can improve processes to further enhance our green credentials.
Of course the following can largely apply to other sectors too – it’s the essence of working towards the same green objectives that really lies at the heart of this investigation.
Digital transformation for survival
Businesses have faced unprecedented challenges throughout the coronavirus pandemic, forcing many to adapt quickly and address issues within supply chains that often stretch across the world.
The thing is, that supply chains are pretty key to both business survival and sustainability – and one core activity that organisations can undertake to accelerate the potential of smarter supply chains and the flexibility to survive is the implementation of a smart digital transformation strategy.
So how can a digital transformation strategy help with these things even in the most challenging times?
Here are a five key, compelling reasons to transform your internal processes through better digital technologies:
- Responsive adaptation – the pandemic has substantiated our need to be able to move fast, change our approaches and respond to challenges, quickly, when they arise.
- Stakeholder and industry pressure to prove sustainability – as reporting and transparency pressure increases, businesses must adopt technologies that provide the data to back-up sustainability claims. While in many cases sustainability reporting is voluntary, some countries, such as India and China have already made this mandatory. As the green agenda continues to grow, it’s likely that more nations will follow suit.
- Investment injections and consumer confidence – from the people who pay for a stake in growing organisations or provide lending options, right through to the people who buy your end products, evidence of ethical, sustainable practices is becoming increasingly essential as a key criterion.
- Tracking and automating – integration of your digital and smart applications can improve your sustainability efforts in two ways. Firstly, by utilising cloud applications, businesses can reduce their carbon footprint by consuming less energy through power-hungry servers, and secondly, by integrating software and IoT devices you can track and analyse energy use/savings across your entire operations. Even something as simple as using smart technologies for your HVAC systems can soon have a significant impact in larger premises.
- Lean and green – lean manufacturing is another important foundation stone, and for many industries, including electronic manufacturing, a digital transformation strategy can add a lot of weight to your sustainability outcomes by helping you to implement lean principles more easily and effectively.
Using your digital transformation strategy for improved sustainability
Taking a slightly deeper look into the way digital transformation can boost your sustainability credentials, we start to see that essentially it’s the data that drives this relationship.
Of course, to balance the people, planet, profit bottom line, any strategy needs to provide business/product benefits and positive outcomes to your end-users too. Even the future talent of your company can be persuaded into your ranks if you have a reputation as an environmentally conscious outfit.
The beauty of building a more sustainable model through better technologies is that by and large, the transformation impacts every part of your business, encompassing your procurement/supply chain, waste management, internal processes, client service levels etc.
By choosing a robust cloud software solution to aid you in your business, operation and customer management, you’ll start to see positive impacts on your sustainability pretty quickly – while also having a deeper analytical insight to help drive further improvements. Subsequently, these will improve your survivability in the face of changing global/local dynamics, your supply chain and your customer and stakeholder satisfaction levels.
By utilising Software as a Service (SaaS) solutions, you could stand to make these sustainability gains:
- Reduce waste – poor organisation and communication between manufacturing demands and suppliers can lead to raw material mismanagement, resulting in over-production of (sometimes short-shelf-life) resources that can lead to unnecessary waste.
- Reduce energy consumption – from poor shipment consolidation and logistics, to badly-managed manufacturing processes leading to inefficiencies in equipment and machinery use, or even creating prototypes/products that are destined for failure... better digital data, design and analysis can mitigate issues like these to lighten the load on fuel consumption.
- Contingency planning – as we’ve seen evermore clearly in the past year or so, supply chains can be quickly and significantly impacted by unforeseen issues. By having a clear view of everything, you can set a plan B in place should anything occur to disrupt efficiencies; disruptions to production can have huge impacts on waste issues through having to source from less ethical suppliers and of course a lot of troubleshooting internally and with your customers. These systems also allow much more flexibility in response to changing customer needs.
By having high quality digital systems in place, businesses can benefit from easier to follow and audit processes, helping them to achieve ISO accreditations too.
Digital transformation in electronic manufacturing
While we recognise the sustainability benefits that digital transformation offers across various industries, we can only really contextualise this from our own firsthand experience.
While the coronavirus crisis was taking hold, it gave us an opportunity to step back and address the issues it caused our business personally and to reflect on our own sustainability credentials.
Through research and a lot of internal troubleshooting, we realised that one key thing we could do was to address our internal processes and focus on a digital transformation strategy. So along with some other environmentally focused changes - such as installing new, energy-efficient LED lighting and ensuring that all packaging moving through our manufacturing processed is recycled - we invested in some new manufacturing software to enable us to be leaner and greener.
We chose Netsuite for its manufacturing focus and the brilliant functionality it offered, and as a result, we’ve been able to boost our sustainability, survivability and service levels quite considerably.
Here’s a rundown of the ways in which our digital transformation strategy has helped us achieve these things – maybe they’ll inspire you to follow suit...
We now have the ability to automatically track and manage every stage of our manufacturing processes from initial opportunity right through to despatch and invoice:
- The developers created a specialist module around the BOM (Bill of Materials) which has live API links to our suppliers – allowing us to have live data of stock availability and pricing. This amazing function completely automates our processes.
- Once the BOM has been created and uploaded to the software we’re able to create estimates quickly, efficiently and accurately – and when changes are made to the BOM we can easily make modifications and keep a record of changes within the system.
- Once the estimate is sent, a PO is received from the customer which allows Netsuite to create both the sales order and the work order.
- The work order is able to generate all our external POs to purchase components and we always have an accurate stock level.
- This then feeds into the manufacturing itself, allowing us accurate kitting for jobs which enables efficient manufacturing of jobs.
- Once everything is complete, the software can then generate despatch notes and invoices
Accurate data and survivability
Through the data we’re able to collate thanks to our newly implemented digital transformation strategy, we’re able to ensure more accuracy, prevent issues in the supply chain and manufacturing process, and streamline our services.
This data has proved particularly useful in the midst of the pandemic: with a worldwide shortage of components, we’ve been able to identify those that are currently unavailable at the point of order, while also having the data we need to be proactive i.e. sourcing alternative suppliers in order to enable manufacturing to continue.
In turn, this allows us to keep a firm focus on our customers, keeping operations running smoothly to prevent any hold-ups and issues with our part of the supply chain.
Reduced waste, efficient logistics
By switching up from reactive to proactive behaviours, we’ve been able to reduce waste in a few ways too. Firstly, this new, process-driven system can be accessed by our entire team and allows everything to be carried out digitally – think of the paper we’re saving in printed out emails and other documentation for a start!
We’ve also been able to reduce meetings and take care of the critical cost/supply relationship of our electronics components – less travel and less purchase orders/deliveries all contribute to reducing our carbon-footprint.
The bigger picture
Overall, our digital transformation strategy has transformed our working culture and allowed us to improve our working relationships with all our stakeholders – customers, suppliers and staff.
With more visibility, better data and automated processes, we’ve already seen some great gains in terms of our sustainability and more:
- Estimates can be turned around within 24-48 hours.
- Processing and purchasing times reduces by approximately 20% - resulting in shorter lead-times for customers.
- Stock holding has reduced by at least 10% and we’re on target to reduce this even further as we’re now able to order on a just-in-time basis via the API links – resulting in less waste.
- We’ve been able to reduce the number of suppliers we use and consolidate orders for a more environmentally-friendly approach to procurement.
- With our new insight, we’re working to identify and use more local suppliers to reduce emissions.
By incorporating all this new information at our fingertips along with digital modelling of our PCB designs, we’re also able to troubleshoot and price prototypes and products prior to manufacturing, so we can reduce the potential of developing physical products unnecessarily.
We recognise that there are some issues within the electronics manufacturing industry that will take more than one business with a digital transformation strategy to solve – but if we all take these steps towards sustainability, we can hope for a brighter outlook for future generations.