Five things manufacturers can do to prepare for the upturn
This is an incredibly difficult time for everyone, and some manufacturing companies have had to lay off staff or shutdown during the COVID-19 pandemic. Coronavirus has already caused shifts and a reduction in “wants” goods and an increase in “needs” goods as this crisis evolves, and consumers batten down the hatches into a conservative mode, and some businesses have been agile enough to switch production quickly to high demand products like ventilators, masks, hand sanitiser or home consumables.
As we stem the spread of Coronavirus, what is certain is that there will be an upturn and demand will recover, we just don’t know when. When the inevitable recovery does happen though, the manufacturing companies that have maintained a level of business continuity and are ready to jump back into full production are the ones that will survive this COVID-19 crisis. The real question is how quickly will that demand come back and how will Australian manufacturers be able to respond to their biggest challenge to date?
Increasing operational efficiencies
In an increasingly interconnected world, maintaining the efficiency of supply chains is of the utmost importance to the Australian economy if we are to jump back into action once the constraints of the coronavirus crisis have reduced.
The good news is technology is allowing manufacturers to minimise disruptions by using real-time reporting to manage their inventory to ensure there are no issues with under or over supply of goods. A frictionless, real-time, data-driven and interconnected supply chain can only benefit the Australian economy in the short and the long-term.
Manufacturing businesses should be doing everything they can to survive this by preserving cash and by optimising their operational efficiencies using real time process feedback. Their Manufacturing Execution Systems (MES) will ensure that quality and efficiency are built into the manufacturing process allowing them to review all product lines and then reduce or remove products where there is a lack of demand.
In the age of automation, technology will be essential to reskilling the workforce during the downturn. Manufacturers could offer their furloughed workforce online training and reskilling opportunities. This will mean that they are in a better position to offer them more skilled and consequently higher paid positions when the upturn happens. And it also keeps the employees mentally active and engaged in the organisation, whilst receiving financial assistance from the Government through the Job Keeper allowance and other benefits being provided for those without work.
In addition, high demand manufacturers should make the most of the good staff that have now become available on the job market. Accessing high quality staff has never been easier, with more well qualified and experienced technicians available than any time in recent history.
Robotics, IoT, and automation
Increasing workforce efficiency is more important than ever currently. Robotics and automation could help us in the war against the virus since a much-reduced workforce is needed to maintain the required production and supply levels. As retailers shift from in-store to e-commerce, it's crucial that warehouses and distribution centres consider the use of robots or collaborative robots or COBOTS for piece picking, automated vehicles and shuttle systems, minimising the dependency on people. Since it is human error that's responsible for most of the damage that happens in production or during pick and pack.
I expect supply chains to become more focused on the Internet of Things (IoT) to provide data to automate processes that will enhance the customer experience. As manufacturers look to reduce dependency on manual processes performed by humans, process automation will help move data across a network and will reduce data errors and invoicing processing costs.
Track and trace, leveraging blockchain and RFID tags will be a norm for farm-to-fork supply chains. Traceability is important but right now knowing what and where inventory is located is equally important as supply chains need to shift rapidly in this time of crisis.
Make time for essential maintenance
Big and small manufacturing plants should capitalise on the potential shutdowns by carrying out any essential maintenance, equipment replacement and upgrades as well as equipment audits. They currently have the rare ability to schedule maintenance demands into no impact or low production impact.
Using a connected smart factory platform will help the manufacturers that are still operating at full capacity to better predict and resolve maintenance requirements, correlate quality issues, reduce downtime and improve quality.
Using predictive analytics, manufacturers can fully monitor factory efficiencies, in order to detect any unusual production behaviour. By correlating this data across the maintenance systems and production process, manufacturers can optimise their equipment downtime, plan repair activities and ensure spare parts are available.
Adopt new technologies
Finally, manufacturers that are experiencing a slow period should get any new technologies lined up and fully operational before the upturn happens. Now is the perfect opportunity for them to be upgrading their technology and updating old versions of software, including their ERP to the latest versions.
They should also consider accelerating their digital strategies to enable them to supply direct to the consumer where possible. Consumer behaviours will drastically shift from bricks-and-mortar to online as they look to practice social distancing. As consumers “nest or cocoon” at home for the foreseeable future, end-to-end supply chains will need to overcome disruptions by anticipating these unprecedented shifts in consumer demand.
The upturn will happen, and by considering these five simple steps Australian manufacturers will be in a better position to make the most of it when it does happen. Let’s all try and remain positive and maintain business continuity, so we can make it sooner rather than later for all concerned.