Future-Proofing Your Processes and Supply Chain After COVID-19
COVID-19 has entered our lives swiftly, disrupting sectors and grinding entire industries to a halt. While the impact on service industries such as restaurants have been staggering, the manufacturing sector has certainly been significantly impacted. Companies have had to simultaneously deal with changing workforce needs and availability against the high unpredictability of supply and demand dynamics compared to what they had been accustomed.
In fact, the crisis has provided one of the biggest challenges to predicting supply and demand in modern times and highlighted an array of learnings to be acted upon in the present and future. As the crisis begins to slow, and businesses attempt to move toward a new normal, there are a number of areas that manufacturers specifically should focus on to keep up, stay relevant and be prepared for future disruptions. These areas include automation, mobility and accessibility, and analytics and AI.
The importance of adopting automation has never been stronger. Manufacturers (and companies at large) that are solely dependent on manual labor are not only less efficient but, in today’s environment, being forced to shut down. In fact, due to COVID-19, 93 percent of all U.S. auto production has been halted. In the past, manufacturers embraced automation to improve efficiency, but now there is a new factor — a workforce that is unable to work.
Of course, many companies are focused on more imminent issues, such as making payroll. Still, the ability to keep the business running without having as many employees on the plant floor will certainly be a priority moving forward. For many manufacturers in the post-COVID-19 world, creating more automated operations will provide a greater level of confidence that they can continue to operate even in an unstable time.
Leading this adoption is the Industrial Internet of Things (IIoT), which takes data from connected devices such as information from the shop floor, order status, market pricing and payroll to create a full view of the business in real time. This level of insight helps keep a manufacturing facility running at its peak performance, even with limited human intervention.
Many manufacturing companies, though, have been slow to leverage technology across their business. In a recent survey by Sage, manufacturing executives said two of the top three most difficult aspects of their jobs include: 1) tech issues (difficult-to-use digital tools), and 2) the digital skills gap in their departments or teams. As such, post-COVID-19 will serve as a challenging period for manufacturing companies as they work to adapt their technology and teams to the changing times.
Mobility and Accessibility
While cloud computing seems to be a given in many corporate organizations, the manufacturing industry has been more cautious in adopting the technology, largely due to concerns around data security and privacy threats. And while many manufacturers planned to adopt the technology in the near future, COVID-19 pressures have almost certainly pushed that timeline up and reinforced the business case for mobile access.
Moving forward, cloud computing is set to become the clear solution to store, manage and analyze the ever-growing expanse of production data. Aside from increased storage space, the cloud helps manufacturers reduce costs, alter business models, incorporate new services, increase agility and malleability, optimize performance and, ultimately, drive profitability.
In addition, from a supply chain perspective, the cloud allows manufacturers to engage on a real-time basis with suppliers, vendors and customers, and provides features like dynamic provisioning and “anytime anywhere” access. Also, the scope for scaling up and down operations using the cloud helps to mitigate the volatility of market demand.
In the future, operating on the latest software solutions and tapping into appropriate technologies will make or break companies during pivotal moments in time, and even crises.
Analytics and AI
As a result of the global crisis, there is a renewed importance placed on analytics and AI. Now more than ever, it’s key to know when, where and how to stop, pause and start operations, and when to increase or decrease production. Analytics and AI provide needed support in unsure times by incorporating automatic alert systems to highlight issues during their inception and delivering insights into which components in a system fail most frequently. They also allow manufacturers to better understand machine utilization (particularly if the machines are connected) and the cost and efficiency of a production lifecycle.
While the majority of manufacturers have been incorporating, and planning to incorporate, these technologies for many years, it has become clear that in this new age, not only are they obligatory, but time-sensitive as well. Manufacturers must adopt the best of the best cloud, analytics, and automation technologies to remain competitive, but also better prepare for all potential future scenarios.
Mike Edgett is the U.S. product marketing director of the Medium Segment at Sage, which helps clients manage accounting and financials, operations, people, payroll and payments.