Why agility is at the heart of resilience in the manufacturing industry
Resilience has emerged as a key competitive differentiator in the manufacturing sector during the era of COVID-19. It has become shorthand for a manufacturer’s ability to manage disruption, pivot to new opportunities and scale operations to meet demand.
But the need for resilient manufacturing will not decline as the pandemic recedes. From evolving customer expectations to digital transformation, disruption has become a mainstay of the manufacturing sector. As a result, resiliency is increasingly becoming a factor for not just meeting the challenge of the moment, but also for capturing more revenue and new markets.
Leaving work on the table
Why does this matter?
In a recent survey of nearly 200 manufacturers, just 28% of respondents said they could get new products and services to customers in less than six months. Another 38% said they could get new products and services to market in 6 to 12 months. That leaves one-third of respondents late to the party when it comes to innovation and rising trends.
The same survey found that most manufacturers are not planning to pursue new avenues of growth, despite the boom in demand. As a result, new revenue, new profits — and potentially a more diverse, resilient customer base — are going untouched.
In many cases, it’s not a lack of desire or drive or vision. Rather, work is being left on the table because of a lack of agility — the ability to react in a proper and timely manner to both threats and opportunities. Agility is having the ability to last — to run your business in such a way that you stay in business. And that is the essence of resilience.
Manufacturing resiliency, one iteration at a time
To become more agile, manufacturers need to invest in the tools and processes that unshackle responsiveness and innovation without cutting corners.
For example, you could invest in capabilities that allow for faster prototyping, such as 3D printing or digital models. You could implement robotic process automation to make back-office functions more efficient so you have more time for managing exceptions. Or you could invest in data analytics tools to eliminate costly and time-intensive reporting activities. Instead of waiting until month-end to review sales and production reports, you could have that information on demand at your fingertips to enable faster decision-making.
There is no way around the fact that you have to expend calories to create a more resilient operation. But there are strategies for making it more a manageable undertaking. Rather than set out to transform your operations in one step, focus on incremental change. Target those improvements that are necessary to improve resilience. Then, break them down into smaller chunks, or versions, that can be easily managed and tracked. Finally, review, assess and adapt to improve the next iteration.
Fine-tuning through feedback loops
The key is to tie every improvement to a feedback loop so you can adjust your course as you go. For every action you take, there are two questions that you should ask:
- Did we accomplish what we intended?
- What other insights did we gain that we didn’t plan for?
In terms of the first question, it’s not so much checking tasks off a list. It’s about measuring the impact on your strategic goals.
For example, perhaps you’re unable to take on additional work because, like many manufacturers, you are shorthanded. You decide to automate sections of the shop where you need to increase throughput. If you accomplished what you intended, you should see more capacity for increased volume. That was an intended result. A reduction in employee burnout and absenteeism could be an unintended, but beneficial, insight that you gained.
The shorter the feedback loops, the more responsive you can be. Did the changes you make move the dials in the direction you wanted to go? If not, why not? What got in the way? Were incorrect assumptions made about market behavior or what customers value? Did you automate the right areas of the business? Remember, rapid assessment and response are fundamental to agility.
The good news is, most manufacturers have at least some of the tools they need for gathering feedback — think about all of the data captured by your customer relationship management platform or your enterprise resource planning system. Rather than ripping out and replacing your infrastructure with new platforms and applications, you may simply be able to build on the capabilities you already have.
Managing through the COVID-19 pandemic is still top of mind for most businesses. But other disruptions are and will continue to crop up. By making small changes and recalibrating as you go, you will iteratively create a more resilient organization that can stay ahead of challenges and get the jump on new openings.
Transform your manufacturing operations
Ready to secure your operations against unanticipated hurdles and reduce your reliance on rearview-mirror decision-making?
Wipfli’s manufacturing and technology specialists help manufacturers analyze their challenges and clarify their options to build the capabilities they need to be more agile. We have the experience and insights to help you develop a roadmap to resiliency. Learn how we can help you get more from your operations so you can do more with your business.
Next up in our five-part series on becoming more resilient, we’ll look at the common disruption points in every shop and how to mitigate them. Don’t miss out on that and our other thought-provoking articles just for manufacturing leaders. Sign up using the form on the righthand side of this page to receive articles and our manufacturing newsletter directly in your inbox.
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