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Shifting supply chain risks from unknown to known early in the product lifecycle
Manufacturing is a complex industry operating in a world that’s only becoming more complicated. In today’s fast-paced, global business landscape, it can be tempting to lean on legacy modes of operations that have worked in the past. However, the many disruptions and challenges of the past few years — including a global pandemic, component shortages, geopolitical turmoil, and an ongoing war for talent — have made it clear that we cannot remain on the same path. If companies want to be a part of the next era of manufacturing, they should prioritize business continuity and resiliency. Manufacturing ecosystems must be adaptable to survive and thrive.
Though it’s impossible to predict every future event, we can mitigate risk by building a robust toolkit that allows us to respond, recalibrate, and recover quickly and effectively when faced with new disruptions. From my over 30 years’ experience in this industry, I urge all companies to start putting resiliency first. We can better weather storms and stay competitive if we adopt advanced technologies, optimize processes and workflows, and invest in a strong employee base.
Transforming the factory with advanced technology
In an increasingly digital world, manufacturers must proactively implement Industry 4.0 (I4.0) technologies and solutions, such as automation, simulation, and machine intelligence (MI). A recent MIT Machine Intelligence for Manufacturing and Operations (MIMO) and McKinsey and Company survey of 100 high-performing companies found that “overall, those who extracted the biggest gains from digital technologies had strong governance, deployment, partnerships, MI-trained employees, and data availability. They also spent up to 60 percent more on machine learning than their competitors.”
Yes, these companies may spend 60 percent more than their competitors on certain technologies, but that can translate to more optimized manufacturing lines, less waste, and higher visible into the product lifecycle. To gain the greatest advantage from these I4.0 deployments, companies must fully commit to the process and invest not just in the technology, but also in workforce training and development. The path forward will look different for every company, but there is always the opportunity to leverage technology to enhance productivity, increase competitiveness, and enable resiliency.
For example, manufacturers of complex, higher cost, and longer lifecycle products — such as automotive and medical devices — may choose to invest in highly specialized automation solutions to optimize their product lines. On the other hand, a manufacturer with a high mix of consumer products may benefit from “vanilla automation,” or automation processes that can be used to carry out common steps like fastening screws, applying labels, and packaging products. In both cases, Industry 4.0 technologies provide a competitive advantage; it’s just a matter of understanding your business well enough to determine the most effective solution.
Additionally, by investing in the IT infrastructure that enables data collection and sharing across the product lifecycle, manufacturers gain the advantage of better insights for production line and supply chain planning. Having the data architecture to connect every part of the product lifecycle – from planning to production to warehousing to delivery and aftermarket – will empower factories of the future to better navigate disruptive events and act with the agility and confidence needed to recover from setbacks. It will also help us to identify growth opportunities and new ways to be more competitive and “sticky” with consumers.
A recent Harvard Business Review article supports this position: “Analytics, for example, can help members of the supply chain identify common parts across product lines and design optimal buffers. Digital twins — digital models of the supply chain — can alert downstream plants about any upstream disruptions faster so they can avail themselves of the buffers more quickly.”
Finding ways to streamline processes and production lines
Factories of the future require a strong focus on process know-how and a culture of continuous improvement. Acquiring Industry 4.0 technologies is only the first step in the journey; companies must be disciplined about implementation and apply Six Sigma and lean manufacturing principles to achieve operational excellence. At Flex, we nurture a culture of continuous improvement through the application of these principles at our sites. In 2022, our sites in Tczew, Poland and Pelabuhan Tanjung Pelepas, Malaysia both received Manufacturing Excellence Awards for lean innovation by the Association of Manufacturing Excellence.
If you sideline process know-how and improvement practices, you could end up paying a high price. When technology implementations are rushed or done sloppily, companies may be left with idle machines, underutilized software platforms, or poor-quality products. Consider a manufacturer seeking to automate a manual inspection process without first carefully defining pass/fail criteria. The company is likely to end up with too many rejects and a higher cost per unit, or a low-quality product that damages the brand’s reputation and customer loyalty.
Valuing people above all
Industry 4.0 technologies will help transform factories of the future, but I would be remiss to leave out the most important ingredient — the people who make the manufacturing industry extraordinary. Our industry’s long-term success and resiliency depends on our ability to hire and retain the purpose-driven innovators, problem-solvers, and makers who are shepherding us into the next era of manufacturing.
This means building a culture of inclusiveness, collaboration, and purposeful execution. It also requires providing development opportunities for our workforce so that they can continue to learn, grow, and manage the advanced technologies that will make their jobs safer and more enjoyable. This is a critical area if companies wish to remain resilient and competitive in the future. In fact, research from McKinsey and Company shows that about 45 percent of organizations are anticipating skills gaps within the next five years. Without investing in skills development and training, companies will find themselves let behind.
For example, we implemented the Capability Acceleration Program at Flex to train employees in the US and around the world on a broad range of disciplines and skills related to Industry 4.0. Courses cover topics that include automation, simulation for future stage modeling, extended reality, and more. Since 2007, over 18,000 Flex employees have been trained through this program.
In day-to-day production, we must also think about securing capacity so that we can ramp up to full production after a disruption. For example, in the face of component shortages, manufacturers sometimes make the mistake of reducing workforce because they currently have fewer or less optimized factory lines running.
Often, the smarter option is to pay workers to remain on staff for when production can proceed at full capacity. People are so important in the manufacturing process, especially today when many countries are faced with staffing challenges. In the meantime, these workers can also be moved to support different factory lines or support other areas of the production ecosystem temporarily.
This allows manufacturers to pivot and remain nimble when components are restocked or demand increases. In this case, keeping workers employed even during downtime is a strategic resiliency play, one that considers the high cost and time commitment of rehiring and training new employees.
Resiliency remains top of mind for everyone
We know that the future holds many unknowns, but companies can prepare by investing in the right technologies, processes, and people to achieve true organizational resiliency.
At the end of the day, each company need to chart its own path and determine the strategy and solutions that work best for its needs. By taking a forward-thinking, people-centric approach today, you don’t need to fear change. You can instead embrace all the innovation and opportunity that comes with a new era in manufacturing.
