Supply Chain Stability and Workforce Agility Are the New Competitive Advantages in Manufacturing
It’s almost impossible to talk about manufacturing these days without talking about the COVID-19 pandemic. It has sent shock waves through every level of the industry, with global supply chains and the frontline workforce absorbing much of the impact.
While some sectors of manufacturing are seeing an increase in demand, others have not made it back to pre-pandemic production activity. And with the twists and turns this pandemic has taken, there’s no way to predict what will happen next or when it will end. But companies can take more control over how this crisis, as well as future disruptions, impacts their operations. To build a more resilient business, manufacturers are doubling down on digital technologies to shield themselves from future external threats.
According to Deloitte’s 2021 Manufacturing Industry Outlook, 76% of executives plan to spend more on digital initiatives and Industry 4.0 technology.
Here are three ways manufacturing companies can leverage those deeper digital investments to build a more resilient foundation.
1. Anticipating Disruptions to Quickly Pivot Operations
From fractured supply chains to unplanned downtime to a shortage of skilled workers, manufacturers are vulnerable to both sudden and long term disruptions that can impact operations, their customers, and, ultimately, a company’s viability.
The pandemic taught manufacturers a hard-earned lesson in preparedness. In March of 2020, the world was blindsided by COVID-19, which seemed to go from localized crisis to global pandemic overnight. Many production lines were halted while supply chains fractured. It’s forced the industry to be more introspective and collaborative in how they source materials and hit output targets. According to the National Association of Manufacturers, 53% of industry executives see an inevitable shift in how they operate.
Manufacturing companies quickly learned that they need greater and more granular visibility into their operations. They need to be able to anticipate risks and pivot quickly to minimize the impact. Building data-driven operations can help companies gain the insights they need to anticipate future disruptions. The more a company invests in a connected workplace and IoT, the more data is generated that allows them to have a 360-degree view of their operations.
Two technologies will help manufacturing companies achieve better risk prediction and response:
1. Artificial Intelligence
AI allows companies to leverage data for real-time analysis and monitoring for potential problems. From predictive maintenance to identifying supply chain issues up the line, AI can alert manufacturers of disruptions ahead, giving them time to plan ahead and avoid operational downtime.
2. Digital Twins
These virtual models of built environments and physical objects allow companies to simulate performance in different scenarios and anticipate different outcomes. This can enable them to strengthen weak spots in workflows and supply chains for when unpredictable events occur.
2. Building Better Supply Chains
If the past year has proven one thing — it’s that global supply chains are vulnerable. Companies had a hard time adjusting to the extreme fluctuations in demand. The world waited while companies had to find new ways to get materials. Even as late as this past June, 60% of manufacturers reported supply chain disruptions, higher than any other industry.
Sourcing material from a specific region or a single supplier makes a company’s supply chain extremely vulnerable to disruption. It’s not a risk worth taking. Creating digital supply chains allows manufacturers to act fast and respond to rapidly changing market forces. It opens companies up from relying on a single supplier to having a virtual marketplace of suppliers allowing them to procure source materials from new vendors as needed.
Another digital investment that can make supply chains more resilient is additive manufacturing, or 3D printing technology. It can strengthen a company’s competitive advantage in the wake of a crisis. For example, in certain scenarios, having in-house additive manufacturing capabilities allows a company to become their own supplier, able to simply print their own source materials when vendors are inaccessible.
3. Creating a More Agile Workforce
The biggest challenge manufacturers have faced, long before COVID-19, has been the ongoing labor shortage and skills gap. These challenges prevent the industry from maximizing their workforce’s performance, and they’ve only grown worse during the pandemic. At the rate the industry’s going, there will be an estimated 2.1 million unfilled manufacturing jobs in 2030.
As companies invest in technology for their physical spaces and workflows, they must equally invest in digital solutions to create a more agile, robust, and appropriately skilled workforce. Mobile collaboration tools like Beekeeper are the answer for an industry powered by frontline workers. With access to real-time information that allows them to tap into the IoT network and collaborate with colleagues for immediate problem solving, a connected workforce can help a company:
Reduce costly errors due to delayed or poor communication
Keep workers collaborating during changes to workplace policies, like physical distancing
Improve safety with a centralized communication hub
Gain new skills for Industry 4.0
This last benefit is critical. With a mobile solution, companies can focus on training and upskilling their frontline workers. With a mobile collaboration tool, workers can access training materials, like SOP documents or videos, that will help them learn the skills they need for the future of manufacturing. McKinsey predicts that the demand for jobs that require more technological skills is going to jump by 50%.
Ongoing training can help a company continue to run seamlessly as new technology is added to the workplace by continuously upskilling employees to keep pace with those changes. It leads to a more agile, ready-willing-and-able workforce who can deliver real time solutions and adapt to change quickly.
These digital investments in workforce technology will be a critical step in the broader strategy to attract and retain manufacturing talent. Today’s digitally native employees want to work for high tech companies. They want real-time communication capabilities. And they want companies that offer growth opportunities. With a digital collaboration tool, manufacturers can achieve these goals and build a company that the next generation of manufacturing employees will want to work for.