Manufacturers of consumer goods faced enormous challenges as the coronavirus pandemic forced shutdowns and slowed commerce to a halt. Consumer demand changed, as spending slowed and shifted toward online shopping, placing strains on manufacturers’ supply chains. As vaccines begin to get into the arms of the workforce, there’s increased optimism for a manufacturing turnaround and revitalized post-COVID-19 world.
The pandemic has exposed longstanding problems in the ways that manufacturers typically react to problems and use available data. The industry is slow to adopt the latest technologies, including artificial intelligence and machine learning, and lags other industries for process automation. The pandemic’s economic impact places firms under compressed timelines to transform and execute to the new normal. Manufacturers need to act now to find improvements in their supply-chain processes, in order to save money, operate at scale, and to help their businesses recover from a tumultuous 2020. Here are several strategies for developing agility and competitive strength in 2021 and the coming years.
Adopt dynamic risk-and-response management. Manufacturers should scrutinize their operations to identify value leaks resulting from operational processes. Are missing components or equipment causing consistent problems and resulting in backorders or cancelled orders? Are some little-used products and materials coming into the warehouse sitting too long and taking up valuable real estate? Do certain needed items consistently arrive late, and does your team need to use faster shipping methods which then cut into your margins? Are there shop floor issues such as resource, labor, or machine availability that are putting outbound shipments at risk?
Such questions can be answered, and situations addressed, through better access to live data feeds, along with the capability to identify risks to make context-based decisions on the fly. With live data, manufacturing managers can make better choices to enable frictionless execution. They can anticipate shipping delays and take proactive steps to change schedules or alternative suppliers. Live data is considerably more valuable than reviewing historical information or running reports based on stale information. Manufacturers can use electronic logging devices and cloud-residing technology that can provide real-time shipment monitoring. With live data, they can also improve quality control by having more visibility into inputs and processes used within all departments. And they can ensure that each batch is traceable and able to be analyzed.
Live data enables manufacturing managers to achieve improved overall equipment effectiveness goals, by adopting a proactive approach to the manufacturing supply chain. Dynamic risk management will prove vital for 2021, as demand for goods accelerates and consumers come to expect immediate responses from retailers, which in turn places pressure on manufacturers to supply products on demand.
Employ automation to scale. Manufacturers needed to scale their operations either upwards or downwards during the pandemic in response to wildly fluctuating demand. Some are managing this task better than others. The ones that succeed typically utilize automated processes to eliminate manual actions and extract more productivity from each worker, machine, and work center. Adding automation to take advantage of the expected 2021 rebound requires a strategic approach, whereby automation is added in the most impactful areas.
Automated processes are essential for matching the “new normal” of consumer expectations. Adding automation allows you to reach scale faster. For manufacturers, it can help fill gaps caused by a shortage of skilled machinists and other workers.
COVID-19 exposed the fragility of complex supply chains. Automation paired with improved data management can help manufacturers reduce some of the risk and waste within these systems. And, with data intelligence and automation together, managers can provide context-based reports for senior leadership, who can make broader changes to improve revenue and further streamline the supply chain.
Add A.I. and machine learning to the mix. Manufacturers that survived the pandemic now need to conquer a new landscape, one that’s filled with demanding customers and the need for a seamless and fast-acting supply chain. A.I. can greatly improve parts and materials management, by detecting supply and demand shifts and reallocating inventory dynamically. It can help manufacturers reduce unnecessary setup and costly re-setup downtimes. For outbound shipments, A.I. offers real-time monitoring of available-to-promise and ship positions, order-allocation options, fill rates and delivery date data, as well as better risk assessments for orders. It sheds light on the underlying reasons for delay, whether they’re procurement or production related.
As demand changes, A.I. provides information about the best dynamic re-routing options, allowing teams to plan and adjust before problems occur. It’s a switch to a proactive approach, where applying rules and managing the supply chain are based on what’s happening in real time, not guesswork. Managers can receive alerts about future bottlenecks. and the A.I. platform can predict changes in production processes. This allows them to make more active decisions that are based on more live or current data, not hunches or faulty in-person observation. A.I. can also improve shift handovers for improved collaboration and efficiency.
Craft a post-pandemic plan. Manufacturers can thrive in 2021 by adopting a data-driven philosophy, where they draw on real-time information, A.I. insights and automated processes to make better decisions. Manufacturing managers needing to modernize processes should consider an operational intelligence partner that can provide them with enhanced agility through A.I. and machine learning. This new level of agility will allow them to better handle a changing world, and meet the demands of 2021 head-on.
Vikas Rajput is vice president and supply-chain expert with OpsVeda.