Technology may be the key to manufacturing success in 2021
The manufacturing sector took some hard hits last year. COVID-19 impacted supply chains, compromised workforce safety, and changed both channels to market and consumer behaviour. Meanwhile, Brexit added an extra layer of operational complexity, and cybercriminals targeted the sector with increased vigour – NTT’s 2020 Global Threat Intelligence Report (GTIR) shows that manufacturing has become the most attacked sector in the UK and Ireland.
In this article, we’ll take a look at the manufacturing trends we saw in 2020 and provide insights into how manufacturers can use technology to overcome the challenges they may face in 2021.
Challenge One: Brexit
If 2020 was the year of COVID-19, 2021 is set to be the year of Brexit. The rapid exchange of intermediate goods such as car parts with numerous EU countries, along with the ability to order these goods ‘just-in-time’ to avoid stockpiling costs, are things that – until now – UK manufacturers have taken for granted. However, now that the Brexit transition period has ended these critical links may be disrupted.
How Technology Can Help
In order to overcome the challenges that Brexit is likely to present, manufacturers will need to improve managing and acting on their data. By leveraging data effectively, introducing more predictive analysis and evaluating their supply chain risks, manufacturers can get ahead of the curve to both reduce time lost on import paperwork and the movement of goods, and reduce waste and variability in their production processes.
Challenge Two: COVID-19
It’s fair to say that COVID-19 will continue to affect UK manufacturers for some time to come. In an industry where safety is paramount, manufacturers have been forced to take unprecedented action to stop the frontline workers that are so integral to their day-to-day operations from contracting and passing on the virus. Manufacturers have leant heavily on the Government’s Job Retention Scheme, but even with this support in place many have had to make redundancies.
How Technology Can Help
UK manufacturers will need to make decisions based on data around how to emerge best from COVID-19-enforced lockdown. Understanding the problem is one thing, but understanding how to tackle it – and having the evidence to back yourself – is quite another, and this is where modern data platforms really come into their own.
Artificial intelligence and machine learning allow manufacturers to scrutinise historical process data. This enables them to identify patterns and relationships among discrete process steps and inputs, and make changes proactively that have a positive effect on yield whilst responding to external market trends that may accelerate or decelerate demand rapidly over the coming year.
Challenge Three: Cyber Security
Manufacturers operate in a hostile digital landscape, where resourceful and highly-motivated attackers seek to steal money and valuable intellectual property from their victims. The 2021 cyber security picture for manufacturers is likely to be one of evolution, not revolution, as cybercriminals adapt their most popular methods – phishing, ransomware, and supply chain compromise – to maximise the efficiency of the attacks they launch.
How Technology Can Help
Technology can help manufacturers mitigate the cyber risks they will face in 2021, but it does not provide a comprehensive solution in and of itself. Effective cyber security requires a combination of people, processes and systems. In order to enhance their cyber security, manufacturers will need to go on a cyber journey that runs from business strategy through to management, monitoring and continual optimisation.
Challenge Four: Direct to Consumer
Consumers’ increasing adoption of online retail is causing brick and mortar stores throughout the UK to close down, and this is having a direct impact on the manufacturing sector.
Manufacturers used to having strong brick and mortar retail partner relationships are seeing less routes to market as many of these retailers scale down their operations. In 2021, many of these manufacturers will move to direct-to-consumer (D2C) models to adapt.
For manufacturing firms considering moving into D2C, this means developing a more sophisticated ecommerce model that accepts card payments. This ecommerce model will need to be complemented by adapted warehouse and delivery services delivered by increased warehouse staff and backed up by a consumer-facing contact centre.
How Technology Can Help
The foundation for great consumer experiences in the D2C world is the efficient collection, analysis and use of data. To emulate a retailer, simply collecting this data is not enough – manufacturers must work across a number of systems, all of which gather data at different points throughout the buyer’s journey that must be integrated to provide true consumer insight.
I believe that the intelligent application of secure cloud-led technology will enable manufacturing businesses to thrive even amidst challenging operating conditions, putting them in the best place to respond with agility to Brexit, the ongoing COVID-19 pandemic, the increasingly hostile digital landscape, and the growing trend towards D2C.
Jonathan Wright, Industry Director for Manufacturing, Six Degrees
