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Disruption in Manufacturing: What Does It Mean & How Can You Take Advantage of It?

Disruption in Manufacturing: What Does It Mean & How Can You Take Advantage of It?


Jul 05, 2017
Manufacturing and Distribution

Manufacturing Disruption 

It’s important for manufacturers of all sizes to develop and be guided by business strategies that act as formal plans of action for tackling specific goals. But as critical as a strategy is to long-term success, it’s also possible to do your business harm if you’re unwilling (or unable) to adjust that strategy when an opportunity presents itself. This post will provide some guidance on how to begin thinking about how your manufacturing operation can take advantage of disruptions.

Disruption happens when something new and, usually, unexpected happens in the market or within an industry; that “something” could be technology-related, political, economic, or social. Discrete manufacturers that embrace disruption—and have a plan for taking advantage of it—are going to be more successful in the long run than those that can’t or won’t change how they do things. Sitting by the wayside opting to continue doing what’s always been done and in the same way it’s always been done is essentially waving a white flag, saying, “We give up!”

Useful new technologies are emerging every day; some don’t change things much, while others are remarkable in their power to shake things up. Take, for instance, Uber: it seemed unthinkable just a few years ago that the taxi industry would be supplanted by a technology company offering apps to individuals with cars who then create their own taxi business. And what about RedBox? This video “vending machine” company was a nail in Blockbuster’s coffin, using new technology to offer video in a far more convenient platform. Had Blockbuster taken advantage of the technology, it could have gotten to market first, but today they’re just a memory.

How to Take Advantage of Disruption
When a company decides to watch for and take advantage of disruption, it’s essentially agreeing to “strategic risk,” leveraging uncertainty to find new opportunities that will give the organization a competitive advantage. But how do you transform into a company that’s able to face and embrace disruption? This isn’t a simple change for most organizations, but it’s necessary in today’s world if you’re going to stay ahead of the curve. Here are a few basic considerations as you ponder your company’s ability and willingness to leverage disruption:

  • Begin thinking of disruption as opportunity. It wouldn’t be fiscally responsible to entirely dismiss the risks involved, but at the same time, there’s risk in not taking action when disruption opens a door. Be prepared to face it head-on, looking closely for ways to gain leverage.
  • Keep your eye on the horizon. Watch, anticipate, predict. Look for market changes, technology introductions, shifts in societal norms, political movements, and environmental and economic trends. At first glance, a change may appear to have little impact or potential for your company, but could you adapt your processes to make it into a strategic advantage?
  • Be prepared to be uncomfortable. Your instincts will be to protect your organization (and people) from the downsides of risk. But to some extent, business owners must be mavericks, taking smart, measured risks if they’re going to grow the company.
  • Challenge the status quo. Every day. Don’t be afraid to think differently. Let go of long-held beliefs if you feel there’s value in a new way of thinking and acting. Be open to “new logic” and to using methods that you’re not familiar with.

Developing a culture that leverages disruption requires planning. You must put together protocols for how you’ll identify opportunities (and the risks involved), what specific steps to take once you identify a new one to act upon, and an approach to monitor and measure the results. It’s wise to engage a business consultant familiar with the principles of disruptive manufacturing to help you formalize your processes to align with this new approach. Integral to any plan to embrace disruption are these two guidelines:

  • Become nimble. It’s going to be necessary for your whole organization to act more quickly than you have in the past. When a disruptive technology becomes available, for example, you’ll need to pull together the right team to fully evaluate its potential and identify ways you could capitalize on it. If instead, you wait six months before doing anything, you can be sure a competitor will be out in front gaining value from it.
  • Fully know your operation. Optimizing your organization will help you take advantage once you do find the right opportunities. One of the best ways to do this is to implement an ERP solution that will provide integrated, 360-degree visibility into the organization and provide tools that make all processes more efficient and effective. This will help you hit the ground running when you find a disruption you can leverage.

Most businesses today base their strategies on what’s worked in the past, jumping on the bandwagon of new technologies only after they’ve been thoroughly proven. Instead of standing by watching things change and wishing you’d been out in front of that change, grab on to the right opportunities and do something with them. Need some experienced insights to help you do that? Reach out to one of our manufacturing experts to learn more about formalizing your approach to disruption. 

Author(s)

Suzanne Koss
Suzanne Koss, CPIM
Partner
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