Throughout his 30+ year career in manufacturing, Hooi Tan, President of Global Operations and Supply Chain at Flex, has witnessed firsthand how organisations struggle to maintain business continuity while adapting to unforeseen changes and challenges.
“In the past few years, companies have weathered everything from a global pandemic to component shortages to geopolitical turmoil and an ongoing war for talent,” says Tan. “We need to fully understand our companies and how to manipulate different dials in our supply chain and manufacturing ecosystems to optimise the product lifecycle and respond nimbly to disruptions.”
These dials — and the degree to which they are turned up and down — will vary from company to company.
“Companies must take decisive steps to adopt advanced technologies, streamline processes, and secure a dependable, well-trained workforce,” Tan says.
Embracing Industry 4.0 technologies and solutions
Recently, MIT Machine Intelligence for Manufacturing and Operations (MIMO) and McKinsey and Company partnered to survey 100 high-performing companies across sectors to learn how they deploy machine intelligence (MI) and data analytics for manufacturing and operations.
The study found that ‘Overall, those who extracted the biggest gains from digital technologies had strong governance, deployment, partnerships, MI-trained employees, and data availability. They also spent up to 60% more on machine learning than their competitors.’
“Deploying advanced manufacturing technologies and solutions enables resiliency and competitiveness in an increasingly digital world,” explains Tan. “However, to gain the greatest advantage from these Industry 4.0 improvements, companies must fully commit to the process and invest in areas like ongoing workforce training and development.”
Companies must weigh the initial cost of implementing advanced manufacturing technologies with the benefits of optimized production lines, less waste, and higher visibility into the product lifecycle.
“Therefore, the best path forward looks different for each company. Manufacturers of complex, higher cost, and longer lifecycle products — such as automotive and medical devices — may choose to invest in highly specialised automation solutions to optimise their product lines.
“In contrast, a manufacturer who produces a high mix of consumer lifestyle products may find that it is more cost-effective to implement ‘vanilla automation’, or automation processes that can be used in many different projects to carry out common steps like fastening screws, applying labels, and packaging products.”
Streamlining and optimising processes
Fully realising the promise of Industry 4.0 goes beyond the acquisition of advanced technologies.
“Without a firm grasp of process know-how and the application of Six Sigma and lean manufacturing principles during implementation, companies may still be left with idle machines, underutilised software platforms, or poor-quality products,” says Tan. “For example, a manufacturer may automate a manual inspection process while not clearly defining pass/fail criteria. This can either lead to too many rejects and a higher cost per unit, or low-quality products that damage the brand reputation.”
Tan knows that building a culture which encourages knowledge-sharing across sites, industries, and countries is crucial when implementing automation and other Industry 4.0 technologies.
Digital technologies predicting and responding to supply chain disruptions
When deployed intelligently, Industry 4.0 technologies can also provide unprecedented insight into the entire product lifecycle.
“A recent Harvard Business Review article calls out how these advancements empower companies to be more resilient by improving their responsiveness to disruptions: ‘Digital technologies — including AI, analytics, blockchain, and internet of things — can also be used to design and operate the kind of revamped JIT network we’ve described. Analytics, for example, can help members of the supply chain identify common parts across product lines and design optimal buffers. Digital twins — digital models of the supply chain — can alert downstream plants about any upstream disruptions faster so they can avail themselves of the buffers more quickly.’
“Investing in the right technologies and solutions can provide manufacturers with better insights for planning and data-driven action in both their production lines and supply chains.”
In his vision of factories of the future, the manufacturing sector will have the data architecture to connect every part of the product lifecycle — from planning to production to warehousing to delivery and aftermarket.
“This will empower us to make real-time decisions that help us absorb setbacks while identifying growth opportunities and ways to be more competitive.”
Hiring, retention, and securing capacity in manufacturing
In the global war for talent, the manufacturing industry’s long-term success depends on its talent pool.
“We must ensure that we continue to hire and retain purpose-driven innovators, problem-solvers, and makers who can help us shepherd in the next era of manufacturing,” says Tan. “In day-to-day production, we must also think about securing capacity so that we can ramp up to full production after a disruption. For example, in the face of component shortages, manufacturers sometimes make the mistake of reducing workforce because they currently have fewer or less optimised factory lines running.”
Often, the smarter option is to pay workers to remain on staff for when production can proceed at full capacity.
“People are so important in the manufacturing process, especially today when many countries are faced with staffing challenges,” says Tan. “In the meantime, these workers can also be moved to support different factory lines or support other areas of the production ecosystem temporarily.”
This allows manufacturers to pivot and remain nimble when components are restocked or demand increases.
“In this case, keeping workers employed even during downtime is a strategic resiliency play, one that considers the high cost and time commitment of rehiring and training new employees.”
Resiliency looks different for everyone
“To prepare for the future, I also recommend looking outside of your own organisation to leaders like those in the World Economic Forum Global Lighthouse Network, who are paving the way in using Industry 4.0 technologies to transform factories, value chains, and business models,” says Tan. “Ultimately, the building blocks of resiliency will look slightly different for every company. The common thread is the need to understand the data and variables behind your own business operations while embracing innovation and change.”