By Eddy Azad, CEO Parsec Automation
The tumultuous, unprecedented events of the past several years have laid bare the vulnerabilities affecting manufacturing operations and their inconsistent supply chains. As a sector that is largely considered to be lagging in the adoption of digitalization, manufacturing was severely impacted by inherent production inefficiencies, shortage of labor, and unreliable availability of raw goods needed to produce enough product to meet demand. The fallout of these events is still being felt to this day; product recalls are at a 10-year high, and supply chain issues are a far cry from making a full recovery.
In today’s digitally connected world, “on-demand” ordering and consumption has become what the customers and end-users expect. When it comes to manufacturing, this is a non-trivial expectation which has put further pressure on the sector. And while this expectation undoubtedly represents many opportunities for profit and record-setting growth potential, it has also acted as an incredible stress test for many operations. As we have seen, a breakdown of these already stretched supply chains—be it upstream with suppliers, at the factory level, or downstream with distribution partners—can result in global marketplaces performing at far less-ideal levels. Supply falls, demand is unfulfilled, and we are left grappling with macro challenges like inflation, critical material shortages, and more.
The imperative for companies to produce lower-cost but higher-quality goods readily and rapidly is only increasing. Those who are unable to innovate and adapt their operations will fall behind, be unable to compete, and risk becoming extinct. Because of this imperative, the future of manufacturing is directly tied to how well companies embrace meaningful change and effect transformation based on carefully devised and executed plans. This is no small undertaking when considering the capital-intensive nature of manufacturing, varying levels of infrastructure and automation, and a profound lack of standardization.
Standardizing the Future of Manufacturing
We don’t live in a perfect world. There are many factors that can disrupt normal life: political strife, war, disease, and natural disasters to name a few. These clearly impact manufacturing, too. The question is how we can do better in the face of various complexities and challenges that will always be present.
To further exacerbate the situation, it should come as no surprise that many manufacturing operations are complex and far from perfect. Companies are aware of their many challenges related to specific production requirements, equipment, skilled resources, regulations, infrastructure, and technology. This collective typically drives manufacturers to resort to developing highly customized solutions to deal with “non-standard” challenges perceived to be “unique” to them.
Customization sounds like a good approach to create tailor-made solutions that fit the exact nature of the problems that must be dealt with. Unfortunately, in reality, customization has proven much less effective and sustainable and become a “dirty” word in business. Typically, customization is achieved by developing an in-house [software] solution, or significantly stretching out-of-the-box software applications not necessarily intended for the goal. Both lead to isolated solutions without the ability to leverage information across the manufacturing value stream. Furthermore, these solutions have very poor paths to proper lifecycle management and keeping up with technological innovations. In short, at best, they’re akin to putting a Band-Aid on a wound that needs an entirely different kind of attention.
The time for isolated solutions with limited value and effective life expectancy is past. The expectation for manufacturing is to have real-time visibility and control across supply chains and production value streams. Isolated, point solutions leave many gaps that invariably lead to poor quality, recalls (baby formula crisis, SUVs), waste, longer time-to-produce, product shortage, escalating costs, inability to compete, financial losses, and even significant brand damage.
So, how do we establish this sophisticated manufacturing of tomorrow? A great place to start is a change of behavior. Companies must stop viewing manufacturing operations simply as black boxes and inconvenient pieces of their business. Rather, they should look at manufacturing as their business. This will change the mindset for making the necessary commitment and investment to transform the business.
Once the mindset is realigned, manufacturers must realize that all companies are data companies. You need accurate, reliable, and consistent information to run your business. This means you have the right solution platforms that can process and contextualize data throughout operations. Point solutions and heavy customization must give way to standards-based solutions1 specifically designed for managing and executing the manufacturing operations.
The right digital platforms must offer the ability to quickly, effectively, and economically be configured to deliver highly adaptable solutions fitting the needs without compromise. The good news is that with the advancement of both technology and implementation methodology best practices, manufacturers have great opportunities to leverage standardization for creating sustainable solutions that can grow and evolve with their ever-changing requirements and demand characteristics.
Other Aspects of Customer Expectations
Post-pandemic research shows that new consumer buying habits have emerged. Whereas pandemic-level scarcity created a “buy it before it’s gone” mindset, today’s consumers (especially Millennials and Zoomers) want to do business with ethical and transparent manufacturers. Specifically, those who live up to their promises2 of local sourcing, environmentally friendly manufacturing, reducing of waste and emissions, and social responsibility.
Consumers want to see companies do more to deliver on green initiatives, including balancing product quality, price, and convenience, so greener alternatives are more practical and accessible. Here again, the flexible, extensible, and standards-based solution platforms referenced earlier will play a vital role in addressing the requirements of responsible manufacturing. After all, the benefits such as waste reduction, improved quality, shorter production time, and better business sustainability directly result in more environmentally friendly manufacturing, preservation of jobs, and enablement of corporate governance.
The building of a digitally enabled manufacturing business is non-trivial. It’s not simply a matter of buying technology. It is a methodical process that starts with making the commitment, first. Then comes the creation of the roadmap that is driven by the company’s digital vision. Equally important is the execution of the roadmap with onboarding of the needed talent, training to drive the right behaviors, partnering with technology providers and subject matter experts to step by step drive the program forward. This building process has many steps and requires regular reviews and adjustments to ensure its success.
Over the last thirty years, Eddy has closely worked with Parsec’s global clients and partners to develop practical strategies for managing the complexities inherent in most manufacturing operations.
www.parsec-corp.com
1 These platforms are typically referred to as manufacturing execution system (MES) of manufacturing operations management (MOM) software.
2 Collectively referred to as environmental, social, and governance (ESG).
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