It’s all change in the defense sector! The U.S. defense sector lost over 40% of its value just a few years ago as a result of COVID and lockdown restrictions. But now, there’s a complete turnaround.
The same manufacturers that were once forced to scale back operations are now rushing to boost production levels to meet new requirements. However, with increased production comes a number of challenges, which can only be solved with digital technologies.
Deloitte argues that A&D organizations must take digital transformation seriously if they are to unlock growth and efficiency in today’s growing defense market environments. This means a company-wide approach to software and information that connects the shop floor to the top floor so that they all operate efficiently to increase production, precision, and agility. And that means moving away from siloed and inconsistent information sources to a single integrated management system. Only this way will businesses be able to collect the data from the Manufacturing Execution System (MES) and Enterprise Asset Management (EAM) system to inform the Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) system, to provide that elusive single source of truth to make dynamic business decisions.
Here are the four pinch points where digital technologies are addressing defense manufacturing issues and boosting production without driving up costs and risk:
- AI will accelerate problem detection to augment and de-risk lean operations
The use of AI within defense forces and manufacturers is on the rise. With the U.S. Department of Defense (DOD) budgeting $1.8 billion for AI applications, it states that AI applications will be used to help defense forces and organizations recognize patterns, learn from experience, make predictions, and generate recommendations.
To help deal with surges in demand, defense manufacturers have reversed inventory strategies from lean and just-in-time principles to over-stocking parts to ensure inventory buffer. Despite reducing production risks, financial risks have been increased due to cost of purchase, storage, and tracking of materials and parts. To better balance risk, defense manufacturers can look to integrate operations and take advantage of demand-driven material requirements planning (DDMRP). This will ensure inventory levels match demand levels and supply chain variability. By looking at actual usage data, DDMRP can determine if the stock level for a part is sufficient to cover demand, making defense manufacturers more sensitive to supply chain disruptions, variations in demand, and production downtime.
- Project management platforms will drive new efficiencies and increased optimization
Defense manufacturing projects by their very nature are complex, with multiple production lines working to intricate assembly requirements. Project management, already a major challenge for defense manufacturers, is further exacerbated by ERP management software causing a disconnect throughout operations, alongside a lack of a skilled workforce readily available to defense manufacturers.
Implementing integrated project management software will allow defense manufacturers to align their planning through their operations to optimize their production and increase efficiency.
The increased visibility brought by integrated project management software allows manufacturing teams to react quickly to new priorities. Ensuring workers and machinery are coordinated to maximize efficiency and capacity will avoid time, money, and resources being wasted.
- Automated workflows will trigger the right activity at the right time, taking insights from top floor to shop floor
A key part of digital transformation within the defense manufacturing industry is the move from siloed data to real-time data flowing from the shop floor to the top floor of defense manufacturing organizations.
Using a powerful MES with integrated workflow engines brings far more benefits to defense manufacturers compared to typical ERP systems with data aggregators or business intelligence reports. Integrated workflow engines are accessible for all relevant parties – providing vital insights into ongoing work across the organization.
The workflow engine makes it fast and easy to create workflows for manufacturing as well as for non-production activities, such as purchasing, human resources, and facilities maintenance. These clear, pre-defined workflows accelerate tasks, reduce the risk of human error, and free staff from repetitive and mundane tasks.
- Regulatory compliance is paramount – how to keep on the right side of regulations with a single source of truth
Defense manufacturers operate in an industry defined by regulatory requirements. This requires fully traceable operations and processes which generate information that is readily available for regulatory reporting.
As regulations get stricter, current disjointed systems make it hard for defense manufacturers to meet requirements, with slow data compilation and increased risk of information being inaccurate or out-of-date. A real-time, single source of truth is needed.
This means manufacturing management platforms should include integrated and automated templates for mandatory government reports that are ready to use when called upon. Combining MES and ERP in one place will also help them comply with the ISA-95 standard from the International Society of Automation (ISA) which ensures they are using standardized data models and communications to enable consistent and accurate data exchanges throughout all business systems.
Make high-performance manufacturing the new standard with a digital helping hand
Taking advantage of technologies such as AI, integrated management platforms and manufacturing execution systems can help defense manufacturers meet increasing demand while making the most of their existing workforce and ensuring constant regulatory compliance.
Successful digital transformation is essential for defense manufacturers to overcome internal challenges and unlock high-performance manufacturing to capitalize on growing demand.
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