After more than two years of adapting to a constantly shifting “new normal,” it’s safe to assume that the only normal manufacturers can count on is that of disruption.
The shock of the COVID-19 pandemic exposed many points of vulnerability for manufacturers at a global scale. But disruption will be part of the fabric of doing business long after the pandemic fades. Cyber threats, supply chain hurdles, unplanned downtime, shifts in customer expectations and other sources of uncertainty are always present.
Successfully navigating this landscape requires a measure of manufacturing resilience. Manufacturers can build this resilience by mitigating or eliminating vulnerabilities within their shop, particularly in the areas of IT, labor, customers and supply chain.
Obviously, that’s a tall order — but it’s achievable. The key is to understand what’s within your sphere of control and your sphere of influence and to frame your efforts accordingly. Your sphere of control is exactly what it sounds like: the activities, processes, people, decisions and outcomes that take place within the four walls of your operation. Your sphere of influence refers to the outcomes that are one step removed from your four walls; in other words, your direct suppliers and direct customers.
With that in mind, here are five areas where you can shore up your operations to decrease your vulnerability to disruption:
1. IT infrastructure and technology (sphere of control)
Unplanned downtime is one of the biggest risks to any manufacturer, which is why your technology platform is a key place to fortify your operations. What functions are essential to your business, and how are you ensuring 24/7 support for them? Are you leveraging tools and strategies that decrease risk? Or are you still operating with on-premises servers and software, which experience more downtime than services in the cloud?
The best course of action is to conduct a technology audit and create a technology roadmap with the aim of building a resilient network. Don’t be intimidated by the scope of work; you can prioritize initiatives based on your business imperatives, making this a much more manageable task.
2. Cybersecurity (sphere of control)
No manufacturer of any size is free from the risk of a cyberattack. As your operations increasingly go digital, you need to ensure measures are in place to protect your data from theft. A cybersecurity specialist or managed security service provider can assist with checking your digital footprint for vulnerabilities, testing your systems, building a multilayered defense and training your staff on how to prevent intrusion. Not only is it a matter of protecting your operations from disruption; it will also help keep your insurance premiums down.
3. Labor (sphere of control)
The workforce shortage is forcing many manufacturers to delay or shelve their plans for expansion. Fortunately, there are several options for extending your workforce, from expanding your talent pool to reskilling your current staff to strategically investing in automation.
Another area to consider is restructuring your benefits package to better appeal to generational differences. For example, older workers tend to want a more robust and affordable health benefits package, while younger workers tend to value higher pay and are therefore more agreeable to a larger deductible. So why not offer different benefits packages? This is an area where creative thinking and an agile response could become a differentiator in the search for talent.
4. Customer base (sphere of influence)
Customers prefer doing business with companies that make their lives easier. When you build a deeper understanding of what your customers value and prove that you can deliver better than your competitors, you can shift from being a vendor to a partner. This creates opportunities to enter into steady engagements, such as larger production runs, longer-term contracts or longer purchase events. In this way, you can take a volatile component of your business — demand —and make it more predictable.
5. Supply chains (sphere of influence)
By now, you know you need to shore up your supply chain against disruption. But let’s face it, your supply chain might begin in one part of the world and end in another. Your ability to manipulate logistics at that scale is extremely limited. But just as you can nurture contractual relationships with your customers, you can look for opportunities to become a preferred partner to your suppliers.
If you agree to enter into longer-term contracts or purchase larger volumes, will it provide your suppliers with greater predictability to meet demand? And if you can provide your suppliers with greater predictability, could that help them forge stronger ties with their suppliers? If so, you can straighten out some of the wrinkles that create stress in your operations.
Build your risk-mitigation team
You don’t need to tackle everything at once. Prioritize the initiatives that will have the most impact on your business, and work your way down the list. After all, this is not a one-time exercise. Resilient manufacturers are constantly scanning their operations and spheres of influence to identify and neutralize vulnerabilities.
Of course, it’s one thing to know that you need to reinforce your operations against disruption. It’s another thing for manufacturers that don’t have the capacity or capabilities to build and execute a plan of defense.
That’s where Wipfli can assist. Our manufacturing and technology specialists help manufacturers gain visibility into their operations, mitigate risks to their business and prepare for the next big thing coming their way. We serve as an extension of your team, digging into the details and getting to the root of your challenges so that you can focus on your business. Learn how you we can help you build a strategy to support growth, innovation and resilience.
Next up, we’ll zero in on strategies for protecting your manufacturing operations from digital disruption. 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.