The ‘Just in Case’ Supply Chain Mindset:
How Manufacturers are Accelerating Digital Strategies

Over the last two years manufacturing has been the definition of resilient. From losses in financial and human capital to complete operational overhaul, it’s weathered the worst – and come out ahead.

Not only did manufacturers make in-the-moment pivots, they’ve implemented future-proofed adaptations to give them a competitive edge over the long term.

Here’s how the move towards new operational practices and digital strategies has them well positioned to meet tomorrow’s shifting requirements.

Challenges

The COVID-19 pandemic led to serious fluctuations in the supply and demand for manufactured products.

We’ve long known that market or supply chain disruptions in one part of the world can have international implications. But what we’re seeing now is truly unprecedented.

“For the first time in modern manufacturing history, demand, supply and workforce availability are affected globally at the same time,” explains Industry Week. “Every major manufacturer is now experiencing disruptions across their supply chains of parts and raw materials, driven by what may now become recurring volatility of supply from South Asia.”

In total, 78.3% of manufacturers surveyed expect a financial impact, with 53.1% anticipating a change in operations, such as reduced production volume or head count, according to Advanced Tech.

Where We’re Headed

Gradually, manufacturers are evolving beyond merely solving more immediate challenges. By adopting what Insight refers to as a ‘’just in case’ supply chain mindset,” they’re preparing for continued uncertainty and accelerating digital, future-focused adaptations.

1) More (Robotic) Domestic Manufacturing Incentives

For various socio-political reasons, reshoring manufacturing is a major priority. The downside of depending on international players had been evident in delays and shortages on everything from semiconductors to medical supplies. To gain greater control and encourage sustainability, there’s a huge effort among executives to automate and localize production. Many incentive strategies include plans for implementing automation and robotic technologies that can help offset production costs.

2) Increasingly Digitized Supply Chains

The interconnectedness of the global supply chain has really turned out to be a double-edged sword. The longer the chain, the more opportunities for disruption along the way. To counteract this, localization efforts, along with “digital tools and processes that help manage supply chain risk, accuracy and flexibility will ramp up across the industry, leading to faster digitization of supply chains,” says Industry Week.

3) Deepening Data Insights

During times of rapid change, real-time data is required to make informed, strategic decisions. As technologies like 5G, IoT, and AI become more prevalent, manufacturing operations will benefit from having a more connected, all-encompassing view of how different facets are unfolding before they become costly bottlenecks.

4) Unlocked Value with Digitization

Prior to the pandemic, many digital transformation efforts were already underway in manufacturing. But the past two years have really accelerated their adoption. Now they’re practically required for manufacturers to stay competitive. McKinsey reports businesses that utilize capabilities like analytics, human-machine interaction, and computational power have recorded 30 to 50% reductions of machine downtime, 15 to 30% improvements in labor productivity, 10 to 30% increases in throughput, and 10 to 20% decreases in the cost of quality.

5) Remote Tools Become Essential

As we’ve seen, being physically present isn’t required for all types of work – but it usually is for most manufacturing jobs. Up until COVID-19, much of the machinery still required some level of human operation and a fair amount of maintenance. Once social distancing requirements reduced the number of employees who could safely be on-site, remote tools became key. Not only can these solutions diagnose an issue remotely, they can also connect teams from a distance. Using collaboration and communication tech, virtual work is now becoming a reality for this once hands-on industry.

We have a lot to learn from the pandemic-imposed challenges that have battered our global supply chain. Manufacturers who use this as an opportunity to innovate will come out the other side strong, sustainable, and savvy. New technology solutions can help them focus on being as future-proof as possible, better manage operations, and stay relevant as the world economy continues to shift.