The pandemic has accelerated trends in digital transformation that were already well under way, says Matt Graves.
In times of uncertainty, large-scale projects and investments are rarely a priority – and no one knows quite how long the uncertainty engendered by COVID-19 will last. As a result, many may see the impacts of the COVID-19 crisis as a roadblock for wider digital transformation initiatives in manufacturing.
But this isn’t quite the case. While COVID-19 has put digital transformation on hold for many manufacturers, for others, it is accelerating the initiative.
Below, I focus on three trends I’m seeing as the crisis plays out:
- Flexible manufacturing
- Flexible workforces
It’s certain that in the long term, the effects of the crisis will change the way we see digital transformation forever – but rather than applying the brakes, I believe it will ultimately accelerate digital transformation trends that were already underway before the pandemic.
Trend 1: Flexible Manufacturing to Meet Demand
It’s well known that the pandemic has led to extreme spikes in demand for some products – both established equipment, such as PPE, and new devices, such as testing kits. Manufacturers are having to quickly scale up production and, in some cases, pivot to create products they’ve never worked on before.
But this trend isn’t completely new. Over recent years, we’ve seen manufacturers trying to adapt in step with rapidly changing customer demands. The crisis has simply made this kind of adaptability more important.
For example, one consumer goods’ manufacturer has recently changed the way it designs and produces its product lines, so it can update orders for its customers every three to six months. And this is not an isolated case – across the manufacturing sector, we’re seeing manufacturers develop a much closer connection to customers. They’re producing more customized products, in shorter runs and smaller orders.
Key technologies, such as automation and IoT, are crucial here. These advancements will help manufacturers gain a deeper insight into their assembly lines and supply chains, and allow them to adapt and change course as time demands.
Trend 2: Flexible Workforces
One impact of COVID-19 has been the requirement of a more flexible workforce, as manufacturers face the challenges of:
- Maintaining socially distanced shifts
- Rapidly training replacement shifts when an entire shift is forced to quarantine
- Bringing in expertise for training and repairs remotely (to avoid the time-delay of quarantining experts who are flown in from abroad)
Again, these challenges are now more pressing, but manufacturers have been under pressure to make the workforce more flexible for some time. The need for efficient knowledge transfer as ageing workforces retire has always been an issue, especially in industries where experienced generations retire and leave an experience vacuum.
Manufacturers must now deal with these challenges more quickly: upskilling and multi-skilling people, facilitating remote working more easily, and making existing expertise go further. Digital transformation has key applications here, too. Automation now covers difficult tasks that in the past required deep expertise; AR can help train people remotely. We’re already working with clients on AR-based remote training solutions, to quickly onboard new shifts.
Sceptics may argue that having to learn the skills of digital transformation will only accentuate the problem and add yet another system that staff must be trained to use. But it’s important not to underestimate how tech-savvy people are. Compared with 20 years ago, we’re all tech experts – everyone is now used to working with computers and carries a smartphone around with them.
Important processes, from planning and scheduling to QA and batch-mixing, usually require highly skilled people with years of training. It takes significantly less time to master an MES, PLM or IoT system, which can automate many of these processes – in turn saving even more time on day-to-day operations. The challenge, therefore, is by no means insurmountable.
Trend 3: Re-shoring
One area where COVID-19 has marked a clearer change in direction is in supply chains. Manufacturers have faced marked disruption due to closed borders during the crisis, especially in areas such as pharmaceuticals.
Many businesses have suddenly felt vulnerable when unable to directly access large off-shored facilities in East Asia. Alongside supply chain disruptions, this has often made concerns around IP and security of offshored facilities more visible. Perhaps it’s no coincidence that Roche owns three of the largest pharmaceutical manufacturing facilities in Europe, all based in Germany, and Germany has come out as a world-leader in COVID-19 testing.
Now, many more manufacturers are talking to us about re-shoring their manufacturing plants and bringing elements of their supply chains closer to home. In particular, they’re talking about how to rapidly upskill and multi-skill staff to take on increased production in onshore sites. Aside from the fact that analysis and automation tools will ease the burden of upscaling production, gaining greater oversight of supply chains through digital technology and IoT will also give manufacturers greater control. This is true whether their sites are on-shored or distributed across the world.
The Shape of the Future
The COVID-19 pandemic has changed manufacturing forever, with huge impacts on digital transformation. But rather than putting digital progress on hold, or even changing the direction of digital transformation projects, its biggest long-term impact will be to accelerate existing trends. And, interestingly, it may also make the road to digital transformation much easier from an organizational perspective.
Watch anyone who’s gone through a large-scale digital transformation process. On the way in, they’ll be talking all about the technological changes involved. But on the way out, their biggest concern will be a cultural change. Adopting technology is one thing, but it’s really just the enabler – the much bigger challenge is pivoting an organization’s way of working, so it can adapt to new environments and everyone can embrace the digital transformation journey. The sudden switch to remote working engendered by the start of the pandemic has shown that, when everyone commits, this cultural change is indeed possible.