April 27, 2017

batch production in manufacturing

Smart companies are looking at some of their products, services, processes within their supply chains, and customer experiences, and rethinking how they use batch processes to manage the competing objectives of providing customized agile products and realizing economies of scale.

Since the industrial revolution, batch processes have been a boon in achieving economies of scale. Batch has no doubt driven efficiency across large-scale manufacturing, distribution, and information processing. While all of this has helped companies lower costs and maximize profits and production, batch processing also has its limitations. It tends to work with a 'one size fits all' or more commoditized offering approach. It can be slow and unresponsive, and doesn't provide much room for customization or delivering relevant information to today's digitally-empowered customers.

Why rethink batch? Why now?

Today, in the age of Amazon, consumers expect customized experiences, a huge amount of choices, and products delivered at head-turning speeds, forcing companies to rethink their approach. Companies and industries are therefore moving away from the batch mentality for products and transactions that have traditionally relied on batch processing.

Take banking for instance. Until a decade ago, banks processed thousands of transactionspayments, deposits, transfers, withdrawals, and othersas a batch, often at the end of the day. This meant that customers saw transactions reflected in their account statements only after a specific hour or perhaps the next day. But banks are now recognizing that this isn't enough and are leveraging digital technologies to serve the customers of today who transact across channels including the ATM, mobile app, or on premises to provide them with precise account balance information in real-time.

Manufacturing too has seen a similar shift from batch production of large volumes of products to the ability to achieve single product delivery where customized, smaller volumes of products are made available to customers at rapid speeds. This approach is driven by the need for companies to shorten delivery cycles, customize products for specific customers, manage quality in different ways, enhance customer experiences, and provide more information to operators, distributors, and customers than ever before.

A great example that proves this point is a leading pharmaceutical company's new approach to produce and deliver radiopharmaceutical products to patients. They found that their batch processes in delivering these short-shelf-life, high-value medicines were limiting their ability to meet the speed, quality, and customer experience requirements for success. By embracing digital transformation, they moved from batch processes to an automated pharmacy solution that enabled efficiency and agility in dispensing custom doses to patients, while reducing material losses. They also centralized back-office functions to drive efficiency and deliver detailed invoice information over the web to drive customer satisfaction.

Embracing a new Agility

Going by this company's story, and those of several others I interact with regularly, at this time in our history, we need to start rethinking batch and creating new ways to drive more efficiency, greater customization, and delightful customer experiences.

To combine the benefits of single-product delivery with the operational efficiencies that batch provides, you have to be extremely agile in your approach and processes. And that agility comes from embracing new processes, new digital technologies, and information throughout your organization.

These are the new skills that companies need if they want to still maintain highly-profitable operations while delivering custom experiences and products on shorter and shorter time scales. Join us at SAPPHIRE NOW in 2017 and let's start a conversation about your processes and how you can achieve your business goals.

Akhilesh Tiwari is the Global Head of the SAP Practice at Tata Consultancy Services. He is responsible for driving the business growth and strategic direction of the SAP team – a dedicated group of talented consultants who work in close collaboration with SAP and TCS industry experts to design, implement and execute enterprise-wide projects for many Fortune 500 companies. Under his guidance, TCS has strengthened its long-standing relationship with SAP and delivered market-leading results for clients.