Across the US, company adoption of advanced and emergent technology –like machine learning (ML) and artificial intelligence (AI)– remains low. This is especially true for small and medium-sized enterprises (SMEs). Yet the diffusion of digital solutions to improve the efficiency and transparency of manufacturers might be the key to making our fragile supply chains more robust.
With an abundance of software available for managing operations, logistics, customer relations, and partner organizations, ranging from user-friendly and fully functional to completely customizable, any organization can find a product to help streamline and manage their work. Despite this, trends continue to show that the adoption of new tech is low, with large enterprises representing the vast majority of the uptake. The adoption of cloud computing, for example, shown to increase efficiency and productivity, is highest among enterprises with over 250 employees. For AI, the correlation between size and usage is even stronger, with enterprises comprising 10,000+ employees having significantly higher rates of adoption than their small and medium counterparts.
What’s preventing SMEs from investing in emergent tech?
According to research by Deloitte, a significant barrier to tech adoption among small businesses is a lack of awareness about its usefulness and relevance. The report shows that 40% of respondents believe that digital tools are not relevant for their business, while 38% believe that digital tools are not effective.
For large enterprises, the ability to dedicate technical teams to the implementation and management of bespoke digital tools, along with the budget to do so, affords a level of experimentation that can uncover the usefulness and relevance missed by SMEs. Moreover, a higher number of employees, customers, and partner organizations that define large enterprises also demands new management systems and efficiencies made possible by the latest digital tools. Without these pressures, SMEs are less likely to be looking for better ways to manage their work. But the benefits of digitization are not limited to large enterprises.
When SMEs are high tech, we all benefit.
Prevalent discussions of tech adoption center concepts like productivity and cost savings – for good reason; according to research like this study from the Hackett Group, investing in advanced and emergent technologies increases productivity, operational efficiency, adaptability, and employee satisfaction. However, the impacts of wide technological diffusion extends far beyond the enterprise itself. While the increased productivity afforded by advanced digitization can benefit the company’s bottom line, when we increase tech adoption across industry it benefits the entire ecosystem, making our collective economy more competitive and reliable on a global scale.
Efficiency and productivity, in this case, are not merely about making suppliers and manufacturers faster. Efficiency reduces wasted energy, cost, materials, and effort required to fulfill a task. In manufacturing, it relies on effective prediction of the ever-changing material supply and consumer demand. Emergent and advanced technology that leverage AI/ML to aggregate a plethora of relevant data for informed predictions, are able to help organizations make far more accurate predictions, in turn improving their efficiency. At scale, when the majority of organizations in an ecosystem are designing their procurement, production, and shipping, around the advanced predictions afforded by these tech tools, the benefits are exponential.
With greater technological uptake comes greater transparency, efficiency, productivity, and adaptability. As a result, the impacts of disruptions that have been wreaking havoc on our global supply chains, can be minimized through digitally enabled management. Using emergent AI, for example, enterprises can better predict and prepare for disruptions, meet changing demand, and fulfill their obligations to suppliers, manufacturers, and consumers alike. At scale, the diffusion of advanced technology across our supply ecosystem with its increased transparency and productivity will improve the flow of goods.
Improving the supply ecosystem with advanced and emergent tech
With SMEs making up 98.6% of manufacturers in the US, trends representative of SMEs are a reflection of the US manufacturing ecosystem. Low rates of adoption for advanced and emergent technologies should therefore become a key target area for improving efficiency not only among individual SMEs, but across the country’s manufacturing supply chain.
According to the NSFs Annual Business Survey, 89% of manufacturers report no use of AI at all, despite the fact that it can transform core manufacturing competencies like fabrication, operations, and supply chain logistics.
The top 5% most productive manufacturers, most of which are large enterprises, have been steadily pulling away from all other manufacturers in measures of productivity since 2001. This gap is driven in large part by their investment in proprietary IT systems. Proprietary IT systems, with dedicated technical teams performing continuous improvements, are not necessarily feasible for smaller organizations. Luckily, closing the manufacturing gap does not depend exclusively on bespoke proprietary solutions.
Third party AI platforms, like FullConfidence by Stratizant, can go a long way towards closing the gap between the largest, most productive manufacturers and the majority of SMEs. By implementing these solutions, the entire manufacturing ecosystem can benefit from increased connectivity, transparency, predictability, and in turn, resiliency. The visibility and predictability afforded by leveraging emergent tech across manufacturing ecosystems will, in turn, create more robust supply chains, minimizing the severity and reach of the disruptions that currently plague us.
To achieve this, we must increase the adoption of emergent and advanced technology across SMEs in our manufacturing ecosystem, by showing how even simple third party solutions can help organizations improve the management of their customers, operations, and logistics by leaps and bounds.