The benefits of technology in the manufacturing industry are significant. From Industry 4.0 to automation, technology is having a serious impact. This is further complimented by companies, customers and the mass public demanding “greener”, more sustainable solutions (e.g. recyclable raw materials, more efficient processes, waste reduction etc.).
This Bain and Company insight provides a number of useful guidelines at how executed well digital strategies can have significant positive effects on resource management, productivity, quality, and bottom line profits. For companies that get it right, the results are impressive—production efficiency gains of 15% to 20%, as well as improved production flexibility and quality. Those returns dwarf the average 2% to 4% returns from classic continuous improvement methods
We have recently seen this through the impact of Smart Packaging as the implementation of new technologies benefits the entire product supply chain. Inventory management and logistics is where tech has the greatest operational benefits with businesses able to reduce cost, increase efficiencies, and improve responsiveness. In a world where the ability to rapidly respond to changing consumer demand is imperative, companies can use these solutions to foster further supply chain integration.
That being said, implementing a technology based strategy can be difficult and this is where the matters covered by Bain can be helpful in assisting with a successful implementation.
The value of technology-enhanced businesses in any fund raising or M&A transaction is a key value driver and differentiator. Positioning these aspects well in the transaction can considerably impact multiples. Polestar has a great track record in assisting technology and technology-enabled businesses gain a real increase in equity value for their owners. We would be more than happy to share our insights.
Industry 4.0: For companies that get it right, the results are impressive—production efficiency gains of 15% to 20%