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Top 7 Reasons Why Companies Deprioritize Production Chain Digitization

March 29, 2023

Digitizing production chain processes is critical in the modern era of digital transformation. Yet, the vast supply chain and complex processes leave many in analysis paralysis. Supply chain executives know digitally transformed production chains provide clear benefits, including increased efficiency, improved customer experience, and cost reduction. So why is it that many businesses are stuck using manual processes?

As production chains globalize and become increasingly complex, they often become more difficult to monitor and manage. Keeping track of all the necessary data points in a production chain from start to finish and responding to any problems that arise is nearly impossible to do in real time. It is further complicated by the need to share information between different teams, departments, and locations — all of which are time-consuming and prone to errors.

While the benefits of digitizing production chain processes are clear, most companies are still slow to embrace the idea. Let’s look at the common objections to digitizing production chain processes, as well as the potential solutions.

1. Lack of knowledge about the digital transformation process

Although the term “digital transformation” has reached saturation in fashion and apparel, many still don’t understand the process of accomplishing it.

First, it’s important to understand the difference between digitization and digital transformation:

  • “Digitization” is turning an analog process into a digital one without necessarily changing the process itself.
  • “Digital transformation” means using digital technologies to rethink business models altogether, which requires understanding that people, processes, and culture are still at the heart of it.

In more specific terms, you’ll be doing away with manual processes like pen-and-paper inspections, decentralized data, excessive third-party inspections, and disconnected communication platforms (texts, emails, Excel). You’ll replace them with automatic data stored in the cloud, centralized communication, real-time visibility, and autonomous, AI-powered analytics.

Here’s how the process works:

Step 1: Ask the right questions

Remember that the primary goal of digitizing production chain processes is to improve efficiency, customer experience, and cost reduction. To start this process, ask yourself the following questions:

  • What business KPI does this impact?
  • What processes need to be digitized and why?
  • What are our current challenges in managing production chain processes?
  • What kind of technology and infrastructure do we need?
  • What is the timeline and budget for this transformation?

Step 2: Rethink core processes

Once you have identified the processes that need to be digitized, it’s time to think about how to do this effectively and efficiently. Start by mapping out your current production chain processes, including the people, processes, and tools involved. Then, identify areas that can be improved upon. For example, manual processes such as inspections and audits could be replaced with automated technologies to reduce errors and save time.

Step 3: Onboard, automate, standardize, and refine

Successful adoption requires a concerted, clearly communicated change in a company culture that starts from the top down. Once everyone is on board, it’s time to introduce the necessary technology and automate as many processes as possible. Finally, standardize and refine processes for even greater efficiency. Don’t forget to monitor and adjust as needed.

2. Fear of disrupting existing processes with digital tools

The fear of disrupting existing processes is a common objection to digitizing production chain processes. After all, change means risk. But when done properly, it can improve existing processes by automating repeat tasks and reducing the potential for errors.

In an apparel business, quality control is of utmost importance to ensure that products meet customer expectations. According to ScienceDirect, choices made solely on production cost often decrease the quality of products, which increases customer returns and ultimately affects a company’s bottom line. This is where digitizing production chain processes can make a difference.

For example, when you introduce a quality management system that detects flaws and defects, you reduce the manual labor required to inspect items and the number of customer returns. You also see where products are in the production chain and monitor and adjust operations accordingly.

The current economic reality has shifted quality control from a cost center to an investment in customer satisfaction, and digitizing production chain processes is key to achieving that goal.

3. Concern that the costs of digitizing outweigh the benefits

According to Harvard Business Review, most executives believe that digitizing a supply chain costs tens of millions of dollars and takes years of implementation. However, their research suggests that a few companies reaped big rewards, such as higher revenue and customer retention, with a faster, cheaper approach.

Cost concerns are valid but shouldn’t be a barrier to digitizing production chain processes. Because the cost of technology is more accessible and the implementation process is shorter, organizations can now reap the rewards quicker. For example, a company may invest in a quality management system that uses artificial intelligence to detect flaws and defects quickly and accurately, eliminating the need for manual inspection. This saves time and labor costs while improving the accuracy of product checks.

Ensuring your company gains ROI from digitization requires seeing the process as a journey instead of a quick fix. The system only works when supply chain partners and employees use it consistently, and that means putting 100% effort into getting it right. Start by setting a realistic budget and timeline for implementation, as well as an evaluation plan that measures the impact of digitizing the process.

When you choose a digital network platform for quality management, you can optimize pre-production meetings, self-inspections, and production processes in real-time. You’ll also have access to comprehensive analytics, performance data of internal teams and production partners, and make continuous improvements of quality performance metrics. A single platform offers the potential to not only save costs but also increase revenue by improving customer satisfaction and reducing product returns.

Liberty Mills, a leading textile manufacturer, saw a 3% reduction in internal inspection failures and lead time by 28% in less than six weeks after adopting Inspectorio Sight. The intuitive dashboard and real-time notifications on their mobile device enabled the production team to monitor inspection results in real-time.

A digital quality management system is among the most cost-efficient investments supply chain managers can make. Like any investment, it takes time and resources to set up, but the benefits are significant, like:

  • Full visibility into your entire ecosystem
  • The ability to monitor at a bird’s-eye level or to zoom in on the real-time movements of an individual inspector
  • Predictive analytics that incorporates every real-time and historical data point into insights, continuously learning and mining for new trends
  • A dashboard that lets you assess the performance of your entire supply chain at a glance and manage by exception
  • Single-platform communication with all stakeholders
  • Accountability for everyone

4. A shortage of qualified personnel

Digitizing production chain processes can be overwhelming, especially when qualified personnel are scarce. Retailers often rely on consultants for the transition and pay large amounts for their expertise.

When shifting to digital processes, it’s important to look for a platform that offers subject-matter expertise to help manage onboarding — from training to implementation and ongoing support.

Data-driven solutions like Inspectorio Sight can help your business optimize and manage the end-to-end process much more efficiently. The platform supports the entire team, from buyers, auditors, factory managers, and quality control staff. It also provides on-demand training modules that help users understand the platform’s functionality and how to best optimize it for their business.

With the right platform and expertise to guide you, the implementation process can be painless, and you’ll soon reap the rewards of an optimized production chain.

5. Human resistance to change in processes

Psychologically, humans resist change for a simple reason: our aversion to bad outcomes is stronger than our attraction to good ones. Described in simple terms, try to put a pair of scissors in your offhand and cut a variety of shapes into paper. It’s a frustrating experience.

This instinct often serves well but can get in the way at moments of opportunity. Knowing that we are naturally predisposed to resist change, it’s important to take a thoughtful approach when introducing digital processes.

Prepare a list of risks you think come with digitization and how to mitigate them. If you fear unsuccessful or incomplete adoption across your supply chain, consider SaaS quality platforms that prioritize rapid deployment across even the largest supply chains and onboard partners around the globe at scale.

If the cost of a solution that doesn’t move the needle on quality and compliance is a concern, consider a platform that automates quality operations to eliminate low-value, manual interventions and free up resources to invest in activities that provide a greater return on effort and investment.

Yunus Textile Mills, a global textile manufacturer, had this to say about their experience digitizing quality operations with Inspectorio Sight: “This is not just an improvement to our processes. I would say this is a complete shift in mindset – the mindset of the company, of the inspectors, of our staff. Now we are thinking about our other processes and how we can improve them in the same way that Inspectorio has improved our quality control processes.”

And if you think legacy systems are the root of your challenges, it’s crucial to acknowledge that they may already be failing you. Most legacy systems keep you stuck in conventional processes while your competitors gain an edge with new technologies. They are an ever-growing capital expense, tend to silo data and suffer from security issues.

No matter the size of your business or its existing infrastructure, you can find a solution that addresses your needs — without breaking the bank.

6. Risks associated with investing in the technology of the unknown

When investing in new technology, it’s important to consider the risks associated with it. If you choose a digital platform that is not suitable for your business or fails to deliver the expected benefits, you end up spending more money and resources in the long run.

To address this risk head-on, treat the process of choosing your digitization platform as you would any other investment: do your research, thoroughly vet all candidates, and assess the capabilities of the technology (how it will integrate with your existing systems and processes) before making a final decision.

Additionally, you should look for a solution that is reliable and secure — data is a company’s most valuable asset, and you want to make sure it is shared and stored securely. Make sure it complies with all relevant data protection regulations and standards.

7. Inability to measure ROI from digitization investments

Traditionally, it has been difficult to quantify the ROI of digitization because it involves both hard and soft changes over time, which means there are simply too many variables to determine the real impact. Your company may see some early success, but it is hard to measure and report on the long-term effects of your investment.

However, as more companies are investing in digitizing their production chain processes, the return on investment is becoming clear. Digitizing production chain processes makes companies more competitive, resulting in an average 13% increase in earnings each year. Companies that digitize with Inspectorio have seen 70% time savings on quality control activities, 85% improvement in quality teams’ productivity, and 94% improvement in inspection pass rates. Additionally, those who take advantage of Factory Rankings (a feature that ranks factories by risk) to reward top performers with self-inspection capabilities have reported an ROI of 221% in the first year of use alone.

The good news is that digitization — when viewed as a component of broader digital transformation — can yield tremendous ROI in time, productivity, and money. The better news is that it gives back what you put into it; the more dedicated you are to taking full advantage of new capabilities, the more ROI you can extract.

Inspectorio Sight unifies your production network for enhanced visibility and control

Inspectorio Sight helps brands, retailers, suppliers, and manufacturers improve quality management operations, streamline production processes, reduce costs, and maximize efficiency.

Inspectorio Sight unifies your production network by providing a digital platform for streamlining quality activities and gaining valuable insights into performance across the entire network. With this platform, you can build trust with buyers while maximizing ROI and reducing the cost of quality. From improved factory performance to increased inspector efficiency, you can gain visibility into potential risks further up in your supply chain to invest resources strategically and reduce quality management costs. Additionally, with actionable insights and AI-powered features, you can stay informed of product quality status and predict potential risks to avoid disruptions. With Inspectorio Sight, you can optimize your operations and achieve greater success.

Contacts us to learn more about Inspectorio Sight and how it can help you take control of your production network.

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