By Ian Richards, Head of Manufacturing, Board.
It is hard to see anything positive on the horizon. At every turn, there seems to be a negative counterpoint to a potential positive, a constant theme for 2020.
Just as businesses were starting to work out how to operate in a COVID world, a second wave hit. Vaccines have been announced, which could mean an end to the pandemic; yet the logistics of ensuring everyone receives them are complex, pushing any potential end date well into 2021.
And even when the pandemic does end, as it surely must, there’s the challenge of Brexit and the true moment of the UK exiting the EU. For manufacturers, and indeed anyone with an international supply chain, the positives can be hard to find. MAKE UK’s Manufacturing Monitor underlines this overwhelming sense of gloom – in an end of October update, just 50% of manufacturers believe the UK will return to normal trading conditions in less than 12 months, compared with 54% at the beginning of September.
So, how do manufacturers combat the seemingly constant train of disruption? Much has been written about the need for resiliency in manufacturing, of the ability to adapt to sudden disruption without it impacting production. It makes perfect sense – we’ve seen immense uncertainty over the last few years, even prior to the pandemic. As well as Brexit, there have been the US-China trade wars, while localised natural disasters are an ever-present threat. Being able to build a resilient manufacturing supply chain is critical to managing all of this.
A significant, hidden vulnerability
Yet resiliency in manufacturing is hard. Any type of production requires a supply chain stretching right back to the sourcing and refinement of raw materials. Add in logistics providers, secondary and parts manufacturers, and before you can get to a finished product (that itself requires a distribution network to get to end customers), you have multiple businesses, all with their own supply chains and suppliers. As an article from Marsh & McLennan Companies notes, “Most manufacturers already know who their critical suppliers are. But they don’t always know who their suppliers’ suppliers are… a significant but hidden vulnerability in their supply chains.”
In the past, having this level of visibility would have been impossible, yet increasingly that’s not the case. From Internet of Things sensors on everything from shipping containers to factory machinery, to artificial intelligence-powered analytics, and cloud computing providing the storage it all requires, the technology is available to gather, sort, analyse and draw insights from huge amounts of data – exactly the sort of intelligence a complex, multi-faceted supply chain generates.
Suddenly, manufacturers are no longer wondering why there are delays, or only finding about them as they happen – they have access to data that tells them what’s happening in real-time. With this, they can react accordingly.
From reactive to proactive
However, having access to data on incidents and disruptive events will only help so much. Knowing something has happened requires a reaction – for manufacturers to build true resilience, they need to be able to proactively adjust their supply lines. They can only do this with effective, intelligent and integrated planning.
That means being able to model what might happen, based on all the available data, and then determine actions accordingly. Are there grumblings about new trade tensions in an area of the world that they source from? Then manufacturers need to be able to switch to other suppliers quickly – but this can only happen if they can predict what is going to happen.
Integrated business planning means being able to determine what resources are required, align sales and operations appropriately, and then act decisively. Are manufacturers currently in a position to do so? The evidence suggests not – this sort of intelligent modelling requires appropriate tools, yet according to a recent Board report, more than three quarters of manufacturers still rely on spreadsheets for their planning, and a third highlighted a lack of available data and insights as a major obstacle.
Yet if manufacturers want to be more resilient, if they want to weather the storms of COVID and Brexit and every other disruption that will come, then they need to be integrating intelligent systems into every facet of their business. That means deploying the right technology, such as IoT, to generate and capture data, and it means having the platforms and processes, such as smart business planning tools, that can make most use of that information.
The path to resilience
Predicting what’s going to happen in 2021 might feel impossible, but if manufacturers with complex supply chains want to be able to handle whatever the next disruption is, then they need to find ways to model likely scenarios and determine how they’re going to act. Infusing resilience across the length and breadth of their networks is critical to being able to operate in a constantly changing world. They are only going to achieve that state if they can capture and use data effectively in a manner that truly does allow them to predict what’s going to happen next.