Why Manufacturing’s Tech Stack Still Needs a Human Fix

There is a very real technology challenge in manufacturing sourcing and procurement. This manifests in the contrast of massive investment in tech with the (still) annoying persistence of manual processes in many Enterprises.

As Steve Dabrowski, Finance & Supply Chain Advisory, CoreX, puts it, “After all of the investments that have been made in technology over the past two decades, why do you still do so much manual work?”

Laying out the tech in sourcing and procurement, Dabrowski says it starts with ERP systems, then a heavy reliance on MRP for materials needs, which leads to constraint management technology to build feasible production schedules. 

Next is supply chain optimization software to optimize shipping and transportation management, and warehouse management systems. Suddenly, the sourcing and procurement tech stack has exploded.

“Now we have fifty point solutions across the organization,” says Dabrowski.

Even with all the technological horsepower, manual work comes into play coordinating all that effort across those systems. And then there’s dealing with things going wrong in the process, such as a customer wanting to expedite an order, causing a ripple effect in what one plant is producing, a line, or even a facility going down, or materials that have to be rejected and sent back.

Between aligning enterprise-wide systems and dealing with a steady flow of fires to be put out in day-to-day operations, a myriad of manual work is created across an organization. How is this traditionally dealt with? Processes filled with spreadsheets, email communication, SharePoint documents, and more. That is the problem and challenge.

Why is this happening? The issue starts with a lack of true system integration across the sourcing and procurement tech stack. And many manufacturers add a layer of complexity with an acquisition growth strategy that creates a decentralized sourcing and procurement environment.

The result is systems designed to optimize transactions instead of handling disruptions, people become the “process buffer” between tech systems, and institutional knowledge becomes trapped in manual processes.

Wouldn’t it be great to be able to implement a centralized tech platform able to collaborate, automate, and orchestrate across the sourcing and procurement tech stack?

When Optimized Systems Meet Real-World Disruptions

When things are running smoothly, manufacturing facilities hum along, the supply chain stays unbroken, and technology applications and platforms maintain workflows. The challenge is what happens when something goes wrong.

Sourcing and procurement systems are all designed to optimize manufacturing, but in the normal course of business, things go wrong that these systems don’t address.

Common examples include:

• Customer-driven disruptions, such as expedited orders creating ripple effects throughout the supply chain, last-minute specification changes, and volume fluctuations.
• Supplier-driven disruptions like quality issues requiring material rejection and return, delivery delays affecting production schedules, and supplier capacity constraints.
• Operational disruptions, including plant shutdowns (weather, equipment failure, labor issues), production line stoppages, and equipment maintenance requirements.

While disruptions are an ongoing issue in manufacturing, there is typically little effort made to standardize responses, build out best practices, or even consolidate information, explains Dabrowski. One issue inherent in problem-solving is that these optimization systems don’t know how to fix things when a disruption happens.

Fritz Byam, CoreX’s Head of Industrial Solutions, says disruptions are where ServiceNow source-to-pay (S2P) brings value in “putting processes into place for all the things that can go wrong in a manufacturing business.”

He adds, “Any week, there might be two or three new materials or supplier trials on a production line. So, how do you manage that and keep track of all that? That's where all the work is. That's where all the communication happens. That's where a platform like ServiceNow could be a game changer.”

The Supplier Management Data Silo Problem

Disruptions in manufacturing are an easy-to-recognize issue. A more under-the-hood challenge is getting a 360-degree view into supply management when data spans multiple systems. 

Supplier data is often scattered across systems: ERP for transactions, contract tools for legal documents, separate systems for ESG or labor compliance, and still others for audits and performance scores.

This fragmentation makes it difficult to prepare for supplier negotiations, assess risk quickly, or vet new partners, resulting in missed opportunities and delayed decisions.

“It’s difficult to obtain a 360-degree view of suppliers because all this data is in different systems,” says Dabrowski. “It requires a tremendous amount of manual intervention to be prepared for any supplier action, from business planning to vetting new suppliers.”

Once again, ServiceNow S2P provides a platform that brings all that disparate data together in one place and coordinates information created across siloed sourcing procurement technology.

Bringing AI into the Mix

Operational technology (OT) is one area where AI and manufacturing come together. A primary manufacturing concern is AI’s impact on machinery and equipment, but right up there is vulnerability response in OT environments, system security considerations, and production and process optimization.

Business process expectations for AI include using AI to replace customer and supplier communication, automate supply chain disruption resolution, and improve business process decision-making.

Bringing this to fruition means providing a clean playground for AI, such as having standardized, reliable processes in place, structured data, and workflow orchestration systems. It’s also important to have realistic expectations for AI and understand that people still need to be in the loop for complex problem-solving.

ServiceNow S2P includes a high level of AI support in automating manual tasks, enhancing decision-making, improving the user experience, and creating time and cost savings.

The convergence of AI and S2P data brings users real-time visibility into everything from procurement activities and spending to supplier performance with reporting and analytics tools. Going deeper into spending, AI analyzes spend data to uncover potential cost savings and areas to optimize procurement processes.

The value in applying ServiceNow AI in S2P and procurement is centralizing data, workflows, and automation from sourcing inception to final payments.

Maximize Manufacturing Tech Value

The manufacturing, sourcing, and procurement technology approach of just stacking up multiple systems designed to handle and optimize different parts of the process, from transactions to transportation management, often leads to unnecessary manual work. The path forward is understanding orchestration, not more point solutions, and the answer to the tech challenge. And finally, seize the opportunity to increase efficiency through better integration.

Dabrowski sums it up with a two-part goal: increase efficiency and reduce manual work in manufacturing processes, and increase the value you get from enterprise-wide investments in manufacturing.

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Want to get started making the most of the manufacturing tech stack? Here’s a three-point checklist to get the ball rolling:

• Audit your current manual intervention points
• Assess the true cost of disconnected systems
• Consider an orchestration platform like ServiceNow S2P for enterprise-wide coordination

Once the ball is in motion, our experts can help keep things moving forward. Get in touch to see how our Discovery Sessions can help.