Today, HP announced it has won the Keypoint Intelligence - Buyers Lab PaceSetter award for manufacturing. Based on in-depth research, this award recognizes the vendors that offer the most impressive portfolios of hardware devices, software solutions, and technical and professional services. Keypoint said, “HP demonstrated a deep knowledge of the issues facing manufacturers, including the need for productivity, regulatory compliance, transformative technologies, and intellectual property protection.”
This is especially exciting given the seismic consequences of the past few months on the manufacturing sector.
Nearly 80 percent of manufacturers say the COVID-19 pandemic will have a financial impact on their business, according to a National Association of Manufacturers survey. While huge, that number is not surprising: for the first time in modern history, a simultaneous, global shock to supply, demand and workforce availability have forced manufacturers to come to terms with the risk of decades-long trends such as centralized sourcing focused primarily on economies of scale, just-in-time manufacturing, and procrastinating digital transformation.
Indeed, many manufacturers have faltered during the past several months. But some have survived, even thrived. A crucial reason for this is the role of technology and the digitization of processes and workflows. No longer a nice to have, digital transformation has proven it is a necessity for long term viability in the manufacturing sector.
If you are wondering what to do now, here are three tips to prepare for the future of manufacturing.
It is hard to break the cycle of thinking about what has happened, but we must focus on what could happen next. Manufacturing historically has been more reactive to digital transformation than proactive. Longer-term thinking needs to be emphasized to ensure that near-term decisions are aligned better with where manufacturing needs to be years from now, and to embed the agility to adapt to the next challenge.
Genuine digital transformation is a journey of continual improvement rather than a massive one-and-done. The winners in this area are not waiting or resting on their laurels, they are constantly investing, adjusting, learning, applying lessons. As the past months have demonstrated all too well, models and forecasts can be completely wrong, and except to a very few, the pandemic was virtually unpredictable. The goal needs to be consistent steps toward robust digitization that uses smart technology to deliver informed pre-planning with the ability to pivot quickly and seamlessly.
In 2005, H5N1 was the disruptive force that got grocery chain and producer H-E-B to think more proactively about their disaster recovery strategy and capability. They were determined to become expert in this space. Their work was tested by hurricanes that followed and in 2009, the swine flu outbreak. In early January 2020, they their highly agile response system began war-gaming the potential of COVID-19 and they were already modeling data from Europe and China twice daily.
Identify the right digitization effort, then put it on steroids.
A McKinsey report finds that the “biggest future impact on revenue and EBIT growth is set to occur through the digitization of supply chains. In this dimension, full digitization contributes two-thirds of the total projected hit to annual revenue growth and more than 75 percent to annual EBIT growth.” Yet only two percent of respondents said that supply chains are the focus of their future digital strategies. That is a huge opportunity to establish significant competitive advantage.
But digitize what? There are many areas to consider and evaluate. Digitization could involve converting analog systems such as paper workflows to digital. Or it could be focused on extracting data and knowledge from IoT-enabled sources. Automation of processes is another key area.
Data and insights that deliver real-time information can inform production and logistics decisions as the landscape changes, down to the hour. There are several examples of manufacturers that had the systems in place to enable them to pivot quickly to meet the pandemic-related needs—alcohol producers making hand sanitizer or clothing companies producing PPE. As an example: Eastman learned that a 3-D printing COVID-19 partnership involving the Tennessee Higher Education Commission and Austin Peay State University was running out of acetate sheets needed to make 10,000 urgently needed face shields for medical providers in Nashville. Utilizing data on stock levels and quickly identifying how much of a co-polyester traditionally used for rigid medical packaging and devices they could get, Eastman was able to rapidly send an infusion of the material.
Further, technologies such as Machine Learning, AI and IoT will use data to deliver insights with the potential to enable impressive efficiencies in predictability, capacity, availability and flexibility of supply chain and manufacturing operations. Social distancing at factories and warehouses will be enabled by tools for remote management, collaboration and maintenance; remote staff will support and direct smaller on-site teams, enabled by real-time information.
Renovate your supply chain.
COVID-19 caused nearly every business to step back and evaluate their systems and processes—especially supply chain operations.
Today, businesses large and small are being forced to expand, decouple and digitize their supply chains to embed redundancies and to make them more transparent, predictable, flexible and resilient.
For example, a major food processing plant and HP global MPS customer sourced packaging and other materials from China. When the virus shut down suppliers, the company was able to pivot quickly to identify local suppliers and shippers. How? Real-time data from their systems provided transparency to processes, inventory, logistics and resources and gave them the ability to switch tracks on the fly. Another HP customer, a small digital packaging business that needed customers, was engaged to provide short-run, quick turn packaging materials.
Also, explore innovative technologies to reinvent supply chains. For instance, to overcome shortages in PPE and testing kits, millions of products have been 3D printed during the pandemic with HP alone printing and distributing 50,000 products from its centers in the US and Spain in just two months.
The pandemic hit the manufacturing sector harder than most. It also brought into sharp relief the fact that companies who are further along on the digital transformation journey, who are harnessing the power of technology to unlock information, benefit from an unprecedented level of visibility into operations and the agility to pivot quickly in the face of disaster.