12 ways manufacturers can use resilience as a competitive differentiator

Resilient manufacturers have strategies in place to reduce risk and the business agility to quickly and decisively react when threats arise. But being resilient doesn’t just safeguard your manufacturing operations against unplanned setbacks. It also provides a measure of protection for your customers — protection that can translate into a competitive differentiator.

When you have the right programs, processes and technology in place to provide your customers with security and predictability, you create an overall better customer experience. And that matters in an industry where the ease of doing business is increasingly becoming a driver of customer decision making.

Here are 12 ways you can use resilience-building strategies to strengthen and expand your customer base and increase your business agility.

Pivot quickly to keep operations moving

When disruption happens, it doesn’t just affect you. It affects your customers, too — their ability to fulfill promises, make their profitability goals and even support payroll. Demonstrating that you have plans and processes in place to rapidly adjust to disruption offers greater peace of mind to your customers.

1. Develop a business continuity plan: Business continuity plans provide a map for getting operations up and running as soon as possible after a disruption. Developing, testing and maintaining strategic business continuity plans are not just good business. They also prove to customers that you have defined strategies for managing risk.

2. Build relationships with peers and competitors: Cooperation between manufacturing peers was one of the most unique situations to emerge during the pandemic. Case in point: When a resin shortage buffeted the plastics industry, we saw manufacturers trading resin stocks to help each other out. Support like this has created openings for complementary and competing businesses to work together to keep orders rolling.

3. Invest in inventory management technology: A recent survey of nearly 200 manufacturers conducted by Wipfli found that only 34% of respondents extensively use automation and Industry 4.0 technologies for inventory management. Yet this technology can help manufacturers stay ahead of unplanned shortages. For example, electronic replenishment technologies will automatically order new parts when supplies reach a certain level. Relatively simple solutions like these give manufacturers an advantage that they can pass on to their customers in the form of greater confidence their orders will be fulfilled as promised.

Mitigate delays with a smarter supply chain

Strategies for managing supply-chain disruptions tend to focus on protecting operations from unexpected pricing spikes or shortages. But when you have the means to predict and avoid disruption, you can also offer more certainty to your customers.

4. Digitally connect your supply chain: Technology like digital process mining (DPM) and digital twins improve your ability to identify supply chain issues and develop a timelier workaround. DPM digitally connects supply chains and tracks actions — such as when the parts you ordered leave the shop — as they occur. Digital twins build on the data derived from DPM to forecast situations and simulate potential solutions. Both tools provide the insights to adjust your operations based on data rather than on gut feelings.

5. Diversify your supplier base: Wipfli’s manufacturing survey also revealed that nearly one-quarter of respondents relied on a single supplier for more than 50% of their materials and components. Vetting multiple vendors for critical parts when things are going well will ensure you have alternatives lined up when your preferred supplier can’t come through.

6. Audit your suppliers: Regular audits of your suppliers’ risks will help fortify your own business. How reliable are their operations? What is the status of their workforce? How vulnerable are their supply chains? You don’t need to be Big Brother to your suppliers. But having greater transparency will help you understand how their risks influence your operations and your relationship with your customers.

Monitor and adjust operations with improved visibility

The ability to access and interpret real-time data is the key to speed. The greater the visibility into your operations, the better you can build on your strengths. But visibility can do more than help you navigate uncertainty. When you have the means to more quickly and confidently respond to customer questions about their orders, you create more value and a better overall experience.

7. Invest in part genealogy technology: Components within assembled products typically come from multiple manufacturers. Parts genealogy provides the ability to trace all components to their source. If something goes wrong, you have quick access to information on how to fix it so you can keep your operations moving.

8. Employ RFID tags and geofencing: RFID tags can be placed just about anywhere — in a bin, on a box, on a tote — to track products and parts. Geofencing identifies when something — for example, a person, a part, or an order — has entered a domain or an area. Both technologies allow you to easily track where parts or products are in your plant. In addition, geofencing can trigger workflows, such as alerting a supervisor when orders arrive in the shipping dock.

9. Implement machine monitoring: This industrial internet of things (IIoT) technology uses sensors to monitor and track how equipment is performing. Among the many benefits of IIOT is the ability to identify and even predict suboptimal performance or unplanned downtime so you can address it before it becomes a problem.

Build cyber-resilient enterprises to protect customers’ intellectual property (IP)

Nearly half of the respondents in Wipfli’s manufacturing survey said they experienced three or more unauthorized accesses of corporate networks and data in the past year. That’s a tough selling point for customers with valuable or sensitive IP. However, a cyber-resilient enterprise provides evidence that you understand the value of your customers’ data and the impact a cyberattack could have on their business.

10. Know where your data lives: With cloud computing and software-as-a-service models, it’s increasingly common for data to live outside your four walls. It’s imperative to have a framework for tracking where data is stored and ensuring all systems and software have proper security standards.

11. Establish a multilayer cybersecurity plan. A multilayer security strategy employs multiple methods to resist, respond to and recover from cyberattacks. From multi-factor identification to regular penetration testing, a sound cybersecurity strategy will reduce vulnerabilities and reinforce your perimeter to safeguard your operations.

12. Train your people. Hackers don’t hack systems; they hack people. Ensuring your staff is trained to recognize and defend against social engineering (attempts to trick people into giving up information) is key to protecting your data and the data of your customers.

Where to start building business agility and resilience

Building a resilient shop takes time and resources, but you don’t need to take on everything at once. Prioritize the areas of your operations that are most critical to your business and focus on iterative improvements.

The most productive place to start is by determining whether you have the capacity and the capability to put these plans together. Most businesses recognize they need to improve resiliency to protect their profitability and differentiate their capabilities. Finding the time and space to identify and mitigate risks in a timely fashion is more challenging.

So why not borrow a team that can do it for you? Wipfli’s manufacturing and technology specialists help manufacturers reinforce their businesses against crises. We work hand-in-hand with your team to ask the right questions, identify vulnerabilities to your operations and develop targeted resilience strategies to keep you moving forward. Discover how we can help you strengthen your resilience so you are better positioned to take advantage of growth and innovation.

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• Before you grow, know where you’re going: A guide to getting to the next best version of your manufacturing operations
• Why agility is at the heart of resilience in the manufacturing industry
• Why manufacturers need to create an end-to-end digital customer experience
• How automation can lead to more committed customers — and employees
• Building resilience in manufacturing supply chains: A panel discussion