It doesn’t matter if the economy is up or down—every year presents unforeseen challenges to manufacturers. 2020 has started on an especially chaotic note. Although the economy is humming along nicely throughout most of the country, the circumstances for manufacturers aren’t easy by any means. Especially for small to mid-sized manufactures who typically feel the effects of economic “bumps” a little stronger than larger companies. Just consider a few of the top issues of the moment:
Labor shortages: The unemployment rate at the beginning of 2020 stood at just 3.5% making it hard to find good people to fill critical roles. The tight job market has led to high turnover and upward pressure on wages. And the issues are only compounded by an ongoing trend of fewer young people considering and pursuing manufacturing careers.
Ongoing trade volatility: Trade disputes between the U.S. and Mexico, Canada, and China have created uncertainty for manufacturers. Although the Trump administration recently signed the United States-Mexico-Canada Agreement (USMCA), it’ll be a while before all of the benefits and impacts are fully understood. And while a preliminary new trade deal between the U.S. and China signals that tensions between the countries may be easing, there are still a lot of details to be worked out before manufacturers can rest easy.
Coronavirus outbreak: Just as the year turned over, the Coronavirus threw an unexpected wrench into the cogs of the world economy. From pushing out Lunar New Year celebrations to shuttering factories to stopped or reduced flights in and out of China, the Coronavirus is wreaking havoc on manufacturing supply chains and it’s still unknown just how long the outbreak will last and how much it will impact the global economy.
Finding workarounds and opportunities in turbulent times
If you’re starting to wonder how to better navigate the chaos, it’s a critical question. Clearly, the labor shortage issue won’t be going away any time soon. And it’s hard to know when and how the trade and Coronavirus issues will ultimately play out. Moreover, once they do, some other disruptive headache will inevitably be looming around the corner.
As you are likely aware, there are all kinds of ways digital manufacturing capabilities can help manufacturers, large and small, respond to turbulent times. Just take these quick examples:
- Providing the ability to quickly analyze situations and determine workable alternatives. When you have a digital thread of data from across your operations and supply chain, it opens up the possibility of modeling scenarios to understand alternatives to business as usual. In the case of Coronavirus disruptions, you could determine the implications to the business of shifting orders to a supplier in Mexico, for instance.
- Automating processes to reduce critical challenges. On some level, going digital and more automated operations go hand in hand. Through a combination of insights from across processes and different types of control technology, manufacturers can usually find all kinds of opportunities for reducing the workloads of floor personnel, often helping to offset labor shortages. Of course, automation isn’t always a panacea. Without careful solution vetting, you can end up trading one set of challenges for another.
- Providing real-time data and insights needed to take process improvement efforts to the next level. With timely insights into key performance indicators (KPIs) and operations, you not only can more easily identify operational issues and opportunities, but you could supercharge continuous improvement efforts. Faster access to data enables you to respond faster to issues and pivot faster in the face of changing circumstances.
It’s also important to note that digital manufacturing capabilities are only as good as the people and organizations relying on them; without a fundamental underlying problem solving and fixing culture and the discipline behind, they won’t add much value.
The importance of a pragmatic approach to digital
The promise of digital aside, knowing how and where to get started is one of the trickiest parts. After all, the solution options are overwhelming, and as a small or medium-sized manufacturer you have a limited budget from which you need to get the maximum possible impact to the bottom line of the business. That means you need to clearly understand the value any solution you are considering will bring to the business. Fortunately, going digital doesn’t have to break the bank when you approach it very pragmatically. The operations management experts at Dploy Solutions recommends this 5-step phased approach for digital transformation in manufacturing operations.
First and foremost, it’s important to have a defined strategy built around clear business objectives as the foundation for your efforts. That gives you the focus you need to effectively look across processes and people for the best opportunities. Next, you need to establish a digital thread that gives you critical information from different parts of the business, starting with consolidating data from siloed business and operations systems and the factory floor for timely analysis. Once you have a consolidated view of business data, you can use insights from that data to start making faster, more informed decisions about evolving business issues and marketplace obstacles while also better identifying opportunities for adding sensors, automating processes and otherwise expanding your digital manufacturing capabilities. And then it’s a matter of choosing technology, running pilots and carefully measuring outcomes against business objectives to determine whether or not a solution will add value to the bottom line, or if your money might be better spent elsewhere.
While that is a simplified version of what needs to happen, the important thing to understand is that with a good strategy along with a practical approach to digital that starts with getting a consolidated view of your data, it’s possible to quickly make gains using digital technology. And the sooner you start, the better prepared you will be for that next unwelcome economic surprise or business issue.
Establishing your digital “foundation”
If you’re looking for a way to better understand what’s happening in the business and accelerate problem solving, you need more than just analytics and reporting capabilities. Dploy Solutions is a manufacturing software platform that enables you to connect, visualize and analyze data from across the entire business. It not only includes analytics capabilities, but it provides decision makers real-time insights into performance with management tools for acting on issues. The affordable pricing and unique breadth of capabilities in Dploy Solutions enable you to quickly gain business flexibility, improve profitability and start realizing the value of digital while better understanding where to focus future technology investments.
Contact us to learn more about how Dploy Solutions can set you up for success on your digital manufacturing journey.
ABOUT THE AUTHOR
Ken Koenemann, VP of Supply Chain and Technology at TBM Consulting Group, is a 25+ year veteran of manufacturing, operational excellence and supply chain optimization. At TBM, Ken is actively leading the effort to our suite of services to include emerging technologies that improve productivity and convert complex data into information for improved decision making.