Article

Busi­ness Transformation

Man­u­fac­tur­ing in 2021: Trans­for­ma­tion is imperative

March 17, 2021

Author

Ricar­do Braun

Country Manager Regional Country Manager

In 2021, many man­u­fac­tur­ers will be pri­ori­tis­ing transformation. 

The pan­dem­ic had a seri­ous impact on this sec­tor, which in turn affect­ed the world in a real way; a notable exam­ple being the lack of med­ical equip­ment and essen­tial items dur­ing the first few months of the pandemic. 

Glob­al man­u­fac­tur­ing out­put fell by 11.2% in the sec­ond quar­ter of 2020 com­pared to the same quar­ter in 2019. The man­u­fac­tur­ing indus­try is show­ing signs of recov­ery this year, but experts say that the world is wak­ing up to the real­i­sa­tion that there are seri­ous draw­backs to depend­ing on a glob­al web of “com­plex sup­ply chains, the divi­sion of inno­va­tion and man­u­fac­tur­ing, and just-in-time production”. 

Com­pa­nies across the globe are embrac­ing trans­for­ma­tion to keep their busi­ness­es alive and to future-proof them­selves. Accord­ing to a recent report, 92% of them are mak­ing it imper­a­tive to improve “oper­a­tional effi­cien­cies”; 67% are accel­er­at­ing their invest­ments in dig­i­tal transformation. 

Ris­ing urgency for trans­for­ma­tion 

It is no sur­prise that dig­i­tal trans­for­ma­tion is a major focus for most man­u­fac­tur­ing com­pa­nies. Dig­i­tal­i­sa­tion enhances oper­a­tional effi­cien­cy and fos­ters an envi­ron­ment for innovation. 

The fol­low­ing trends have been gain­ing trac­tion in the man­u­fac­tur­ing sec­tor for years, but in 2021 they will gain fur­ther attention: 

1. Flex­i­ble man­u­fac­tur­ing practices 

The unpre­dictable and unprece­dent­ed events of 2020 forced the need for agili­ty in oper­a­tions. We expect to see an increased inter­est in Flex­i­ble Man­u­fac­tur­ing Sys­tems (FMS).  

With FMS, man­u­fac­tur­ers can con­fig­ure their sys­tems to eas­i­ly pro­duce a vari­ety of parts and han­dle chang­ing lev­els of pro­duc­tion. This allows man­u­fac­tur­ers to adapt to changes quick­ly, improve pro­duc­tiv­i­ty and oper­a­tional effi­cien­cy, and ulti­mate­ly save time and reduce cost. 

2. Dig­i­tal twins 

Remote work­ing has tur­bocharged inter­est in dig­i­tal twins. A dig­i­tal twin is a vir­tu­al copy of a phys­i­cal asset or prod­uct that col­lects real-time data which can be accessed any­where and used to appraise and opti­mise performance. 

For exam­ple, man­u­fac­tur­ers can cre­ate dig­i­tal twins of their sup­ply chains or process­es to mon­i­tor, test or improve them quick­ly and cost-effectively. 

With 5G facil­i­tat­ing the Inter­net of Things (IOT), dig­i­tal twin tech­nol­o­gy is set to be one of the big things in the fourth indus­tri­al revolution. 

3. Big data and machine learning 

The first indus­tri­al rev­o­lu­tion was steam-power-driven, the sec­ond was elec­tric, the third was com­put­er and robot­ic, and the fourth is cyber phys­i­cal systems. 

With IOT, all assets can be net­worked and man­aged dig­i­tal­ly. Autonomous vehi­cles and Radio Fre­quen­cy Iden­ti­fi­ca­tion (RFID) track­ing of goods will facil­i­tate faster and more effi­cient sup­ply chains. 

Big data and machine learn­ing will improve agile prac­tices and pre­dic­tive main­te­nance regimes. The list of changes goes on and on, but it’s cru­cial to not neglect the human fac­tor in this process. We still need human intel­li­gence to ensure that these sys­tems are work­ing as they should. 

4. The dig­i­tal­ly empow­ered workforce 

In the third indus­tri­al rev­o­lu­tion, the cus­tomer was king, but increas­ing­ly, lead­ing man­u­fac­tur­ing organ­i­sa­tions are address­ing not only cus­tomer expe­ri­ence, but employ­ee expe­ri­ence as well. 

The days are num­bered for auto­crat­ic, top-down man­age­ment struc­tures. Hav­ing a dig­i­tal­ly empow­ered work­force should, in the­o­ry, lead to faster and more effec­tive deci­sions, fur­ther dri­ving cost effi­cien­cies and innovation. 

How are com­pa­nies going to gain this dig­i­tal­ly empow­ered work­force? For some, it will involve invest­ing in new tal­ent. For oth­ers, they will have to upskill their work­force. For many, it will involve both. 

The cor­rect imple­men­ta­tion is crucial 

The year ahead will be one of tran­si­tion, with dif­fer­ent goals across dif­fer­ent man­u­fac­tur­ing com­pa­nies. To face this storm of chal­lenges, all should focus on increas­ing agili­ty in oper­a­tions and invest­ment in dig­i­tal initiatives. 

How­ev­er, while the trends high­light­ed above are impor­tant, it is cru­cial to remem­ber that they are only half of the sto­ry. The oth­er half is to build change capa­bil­i­ty with­in your organ­i­sa­tion to imple­ment trans­for­ma­tion effec­tive­ly and sustainably. 

In our years of expe­ri­ence in exe­cut­ing agile man­u­fac­tur­ing and dig­i­tal trans­for­ma­tion, one of the com­mon prob­lems we have seen is ini­tia­tives that do not address real busi­ness needs, also neglect­ing and the human fac­tor when it comes to imple­men­ta­tion. What can exec­u­tives do to mit­i­gate this? 

1. Do the groundwork 

To ensure that the trans­for­ma­tion will meet busi­ness needs, man­u­fac­tur­ers should work to: 

  • Dif­fer­en­ti­ate per­ceived needs from real busi­ness needs 
  • Eval­u­ate cur­rent com­pa­ny vision and whether it needs to be reworked 
  • Iden­ti­fy inef­fi­cien­cies at all lev­els of the company 
  • Get clear on what ben­e­fits they’d like to get from the transformation 

2. Utilise change man­age­ment best practices 

This means hav­ing a sol­id strat­e­gy to com­mu­ni­cate the case for change to employ­ees and get­ting them involved with the trans­for­ma­tion from the beginning. 

3. Embed a cul­ture of con­tin­u­ous change 

A cul­ture of con­tin­u­ous change enables com­pa­nies to piv­ot like a well-oiled machine when nec­es­sary. This capa­bil­i­ty will help com­pa­nies thrive and become future-ready. 

For more on imple­ment­ing trans­for­ma­tion suc­cess­ful­ly, down­load our white papersPow­er­ing Suc­cess­ful Dig­i­tal Trans­for­ma­tion and Future-Ready, Agile Organ­i­sa­tions: The Win­ning Blue­print for Change.) 

Author

Ricar­do Braun

Country Manager Regional Country Manager

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