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Top Reasons Why a Software Mindset is Critical to Small Manufacturers

by
Eric Davis, Automation Alley
January 13, 2023
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Summary

With a cost cap and endless applications, powerful software to optimize production is no longer exclusive to the realm of large manufacturers. Small manufacturers are in a better position today than ever before to take advantage of this new technology.

As we explore Industry 4.0, we talk about having a “software mindset” to tackle the digital transformation it calls for. For manufacturers looking to adapt to Industry 4.0, what does that mean? Foremost, it means understanding the software capabilities of today and how they will play a role in the future. But more importantly, it means understanding how those align with a business's short and long-term interests.  

Utilizing the software mindset to its fullest potential starts with finding a problem or opportunity, exploring what’s possible and validating a solution with research, prototyping, beta-testing, etc. After validation, manufacturers are poised to implement the software to reap its rewards. The more companies implement this mindset throughout each level of their structure, the more agile they will become.

In this article, we'll explore the top reasons why it's worthwhile for small manufacturers to adopt a software mindset.

Software Resolves The Issue of Limited Resources

For small manufacturers, there can be constraints that larger firms may not feel. For example, there may be limited resources in terms of time, energy, or capital. Also, geographic location can be a limiting factor regarding customer reach or supplier availability. Software helps resolve some of those constraints.

Let's compare buying a 3D printer to purchasing 3D printing design software: If a company wants to produce more 3D-printed parts, it will need more machines. There is a physical limit to amount parts a 3D printer can create, even after optimizing it to its fullest potential. However, one design software package can connect to multiple machines, driving down the cost of software on a per-machine basis. Leaning into software helps improve resource utilization because it is infinitely more scalable than hardware.

Software Provides Better Odds of Finding and Executing on Limited Yet Valuable Opportunities

When opportunities arise, you want the ones that give the most bang for your buck. As noted above, the software puts a cap on cost without capping the revenue potential. Naturally, small manufacturers looking to grow can find more feasible and valuable opportunities using software than relying on hardware alone.

There may be opportunities to build new solutions, enhance new solutions for new or existing markets, have a better experience with existing solutions, or even change the branding to gain exposure. This concept, called a blue ocean strategy, shows organizations how to escape the oversaturated waters of their current competition and find new oceans that may be overlooked. Utilizing a software mindset helps navigate to less crowded, profitable waters more feasible.

Software Can Enhance and Create Competitive Advantages

Each company has unique advantages they use to beat out the competition in local, regional, national, and global markets. Technology can amplify these competitive advantages, a concept discussed in our Industry 4.0 Readiness Assessment. For example, companies with reliable parts may enhance their offering by proactively monitoring data and resolving issues, improving the reliability of said solutions. Another example is when a leader notices their competition drops the ball on customer service and support. They may invest in a ticket-based system to efficiently handle bugs and feature requests.

A Software Mindset Can Improve Decision-making

A software mindset starts with looking at your company holistically and understanding how software interacts with part of the business. As companies look introspectively, they may find hidden game plans at the leadership level or misunderstood strategies by team members at various organizational levels. This exercise, plus efficient modes of communication, improves the transfer of knowledge company-wide. As more team members enhance their understanding of the business, decisions are made with more objectivity from a better foundation than otherwise.

Additionally, the software allows management to be in-the-know while allowing employees to have the autonomy to make their own decisions. Also, given their relatively low-cost nature, employees can test solutions in a controlled, budget-friendly environment. That allows management to focus on higher-value opportunities, increases efficiency, and builds deeper trust within the organization.

Small manufacturers need to use every tool in their toolbox. In this case, it isn't a machine used at one location but an automated workflow across the entire organization. The scalability benefits of adopting a software mindset are well worth the investment of time and energy.

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Eric Davis, Automation Alley
Eric Davis, Automation Alley

Eric Davis is Automation Alley’s Technology Investment Analyst. In this role, he is responsible for providing in-depth analysis and insight on participants in the organization’s Industry 4.0 Readiness Assessment which helps small to medium-size businesses understand how Industry 4.0 will impact them in the areas of culture, finance, and technology. Davis also manages the investment process for Automation Alley’s pre-seed fund, which supports companies in Automation Alley’s Industry 4.0 Accelerator. Davis has an extensive background in performing due diligence on public and privately-held companies as the Chief Investment Officer of Revalue, an independent Investment Advisory Firm. Davis also implements icube™, a leadership system designed to help companies reduce human friction and build trust to maximize teamwork & profit.

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