The global disruption caused by the COVID-19 pandemic will drive manufacturing companies to adopt more flexible approaches to production, rethink supply chains, develop new ways of working in a virtual world, reassess plant design, and accelerate their digital journeys to M4.0, say members of the Manufacturing Leadership Council’s Board of Governors. By Paul Tate
In early May, the MLC conducted a series of virtual interviews with members of the Manufacturing Leadership Council’s Board of Governors to gather their expert insights on the potentially disruptive implications of the COVID-19 pandemic for the future of manufacturing.
Moderated by the MLC’s Co-founding Senior Content Director and Executive Editor, Paul Tate, the virtual panel included Vicki Holt, President and CEO of Protolabs and also a member of the National Association of Manufacturers’ Board 0f Directors; Mike Packer, Director of Production Strategy at Lockheed Martin Aeronautics and Vice Chairman of the MLC’s Board of Governors; Ron Castro, Vice President and Chief Supply Chain Officer at IBM; Eric Fidoten, Senior Vice President of Operations at Premio Foods; and Dan Dwight, President and CEO of The Cooley Group.
Tate: The COVID-19 pandemic has had a massive impact on manufacturing around the world over recent months. A lot of attention has been focused on the urgent measures needed to cope and recover from the immediate impact of the COVID crisis. If we take a longer view, what’s next for manufacturing in a post-COVID world? What are the lessons that manufacturing is now learning from the crisis and how do you think the pandemic will change the way the industry will operate and develop in the years ahead?
Holt: I think that every time we go through really gut-wrenching events like we’re going through now, we learn from them and we take those learnings into the future. I have been so impressed by how the manufacturing community has come together to really help gear up to fight this pandemic. It’s been inspiring. I think people are beginning to realize how important frontline manufacturing is to making everything happen, making it all work – collaborating to make ventilators, and respirators, and PPE, and test kits, and vaccines, and keeping the food chain in place. Just like we now have a better appreciation for our frontline healthcare workers and our grocery store and delivery people, I think there’s also going to be a new appreciation for manufacturing after this crisis. And that kind of collaboration could be one of the most important learnings for how the industry operates in the future.
“COVID-19, and all the things we’ve been doing to respond to that, has driven more urgency within our whole environment and that is going to drive and accelerate the implementation of our M4.0 journey.” – Dan Dwight
Packer: Winston Churchill is quoted saying, “Never let a good crisis go to waste”. I think that’s true of today. For manufacturing, one of the most important lessons we are all learning from this crisis is that our factories need much greater flexibility. That’s not just the balance between the 4Ms – man (or people), machines, materials, methods. It’s also about the greater agility of management to empower the system, both human and automated, to rapidly adapt to changing demand and supply signals.
Fidoten: Yes. A good crisis wasted is a real shame. To me, this is an opportunity for leadership, to look at the real corporate risks of the business – what it needs, how it works, and what it delivers – and to demonstrate an absolute commitment to putting in place the values that they’re now communicating as we move though the pandemic. It can’t just be short-term slogans. It needs to be a tangible strategy to invest in how plants are designed, how they think through resiliency to disruption in the supply chain, and to understand what steps they can take to make their people feel safe and secure for the future. That’s what will really make a difference.
Dwight: For us, one of the things that has been openly challenged in this crisis has been our ability as a company to operate with urgency. We’ve needed agility to be able to respond, and that agility has come out of being able to manage data and an ability to adjust production lines on the fly. It used to be a highly manual, almost artistic process. Now, we’re pushing buttons on a touchscreen. COVID-19, and all the things we’ve been doing to respond to that, has driven more urgency within our whole environment and that is going to drive and accelerate the implementation of our M4.0 journey.
Castro: As I talk with many of my peers, that’s one of the most common trends. The folks who have been further ahead on their digital journey have been able to react faster and really weather some of the issues quicker in the crisis. That’s also true in our case. If I step back, I think that’s going to be one of the key lessons we learn for the future too. We’ll see a stronger focus on the acceleration of the digitization of the enterprise – from AI, to intelligent workflows, to automation – and on leveraging technologies to be able to make faster, smarter decisions and manage critical activities remotely versus onsite.
Tate: What’s driving that growing recognition around the importance of accelerating manufacturing’s M4.0 digital journey?
Dwight: At Cooley, people now have in front of them real experience of ideas and digital tools that before were probably one-off examples, but now they can clearly see how these things have helped us. Take the pivot of our production to medical gowns, for example. We went from idea conception to a finished product and mass production in under three weeks. People look at that and say, “Wow! This part of M4.0 really helped me. What else should we be doing?” They are now wondering what else we can implement and how can we do it sooner, better, and faster than we were going into COVID-19. It has become a sort of internal case study for us. Down the road over the next 6 to 12 months, I think many companies are going to look back at this period and ask themselves, “Okay. What companies survived and did well through the pandemic and who didn’t? What are the commonalities and what was different?” So, we’re an example of the benefits of the whole M4.0 approach where we can show how we’ve accelerated go-to-market through M4.0 and the collection, analyzing, and sharing of data and information across our facilities.
“We will need to address the whole concept of operations in a virtual world. We can’t just flip a switch.” -Mike Packer
Castro: One of the big elements that I think will drive change is a much stronger focus on virtual platforms and how we collaborate with each other in the future. Like many companies, the majority of IBMers have been working from home over the last few months, apart from the people in the production plants and some essential support functions. Yet we have seen almost no impact on productivity and innovation by leveraging remote operational systems and virtual tools. So, I think that increasing focus on collaboration platforms and how we virtually collaborate will be a continuous trend for the future.
Holt: As virtual working is being used so much more now, one of the areas I also see changing is the B2B buying experience. I think a lot of companies are now looking at ways they can approach their customer base through e-commerce instead of through a direct face-to-face buying experience. We’re seeing much more openness among traditional decision-makers, like supply chain leaders, to look at transacting business in a more technology-enabled way in order to get speed and, right now, to deal with the need for social distancing. But also, even as they’re going through the procurement process, things like virtual plant audits, which you have to do when you approve inspected products for production. In April, for example, we did five virtual audits with customers where we completely conducted the whole audit, touring the plant, exchanging documents, everything digitally in a virtual way. And one of those customers said, “You know, this is really great! It was just as effective as getting on the plane and spending two days out of my time to go do that face-to-face.” So, I think techniques like that are going to become a lot more prevalent and people will be much more open to the use of technology in the whole area of e-commerce.
“The design of the workplace is going to be modified extensively and a significant amount of capital investments are going to go into that.” -Eric Fidoten
Packer: I agree that there’s going to be a real push to continue to exploit the overall cost efficiencies of telecommuting and remote work. Many people feel that going virtual hasn’t been a big issue during the lockdown, that they’re continuing to get everything done, that people don’t have to be on site, and that now perhaps they need less brick-and-mortar, less maintenance of facilities, less consumption of utilities, all those kinds of things. But I fear that it could result in an unbalanced approach by trying to exploit those cost efficiencies and not look at what we are giving up. One of the critical pieces coming out of this, for example, are the challenges of virtual collaboration and operations for the future. Certainly, we can digitally collaborate, but there is less ability to just walk down the hall or through the plant and talk through a problem with somebody, or for a new designer to learn the business and the details of their domain by seeing it in action. So, I think we will need to address the whole concept of operations in a virtual world. We can’t just flip a switch. We need to understand how we actually operate and get work accomplished throughout the day. We’ve got to be very conscious and deliberate about how we interact with a distributed workforce, how we set boundaries, and how we measure performance. Otherwise, it may end up all over the map.
Tate: So, as we move to that more virtual, perhaps socially distanced world, what do you see as some of the key impacts on the way production plants themselves are designed and operated in the future?
Dwight: It’s interesting, because if you look at plant design, there’s certainly been more leadership attention over the last few months in how a plant is laid out than there probably ever was before. Now you have CEOs actually looking at the layout of a factory floor and starting to think, “Hey, this plant layout really matters!”
Fidoten: I think the design of the workplace is going to be modified extensively and a significant amount of capital investments are going to go into that. At the plant-level, at the factory floor-level, in fact anywhere where there’s a large number of individuals working, will need to support the screening of employees, socially distant working, new hygiene regimes, and whatever the latest rules and regulations that are developed by health authorities and regulatory bodies. Initially, there will be some productivity inconveniences that are associated with delays and transfer of materials or transfers of process. But those things will eventually be designed out through the better use of technology or better physical layouts. Certainly, any new facility being constructed, as of two months ago, is going to build in all of these factors much more seriously than in the past. So, I can see a transformation in the design of factory layouts as we move forward and we can expect some permanent changes in the manufacturing workplace.
Packer: I think there are a number of digital tools that we’ll see a lot more of on factory floors. One is an accelerated use of cobots; very simple, low-cost kinds of ways that aid people in lifting and moving pieces of hardware so that you don’t have two or three people required to actually position or hold things while the assembly process occurs. Instead of having people adjacent, these types of automation partner with humans to help spread people density, and you can also gain improvements in terms of efficiency and changes in the workflow. I also see companies prioritizing smaller footprint, rapidly re-configurable machines and processes that enable the rapid re-configuration of fabrication and assembly lines to support greater agility. Above the floor, I see an acceleration in the use of artificial intelligence layers, call them databots, that do a lot of the compression and manipulation of the data and support greater digital interconnectivity between people. That may require the redesign of some types of work so that we really focus the human interaction with the data where it really needs to occur, so we minimize the human content in basic data formatting and analysis.
Tate: One of the other main impacts has been how the pandemic lockdown in many countries has radically disrupted global supply chains. How will that experience change the way manufacturing companies look at supply chains in the future?
Holt: Manufacturers are going to have to think long and hard about their supply chains. The combination of recent tariff issues and now what’s happened around the world with the pandemic and the government reactions with shutdowns, has caused havoc with long, complicated supply chains. There now has to be some serious thought about putting greater flexibility into supply chains and looking at high risk, long supply chains to make sure alternatives are in place in case things go awry. Understanding where to utilize different types of supply chain partners, for example, to put that flexibility into your supply chain I think is something that people are really going to consider as we go forward.
“Manufacturing leadership has now become much more connected, open, and collaborative. Leaders have realized that if we don’t win together, we don’t win at all.” -Vicki Holt
Packer: I think supply chains need to be completely rethought and overhauled in the larger context of the entire integrated end-to-end data and material flows in today’s manufacturing companies. The supply chain configuration risk and response to dramatic demand and supply swings requires unquestionable data accuracy, true digital threads, less human interaction through the use of automation and AI, and a higher speed of response to change by ensuring more agile supply chains and factories by using modeling and simulation technologies to enable rapid self-reconfiguration.
Castro: It’s really an issue around the whole state of risk management and resiliency. That has many elements, how supply chains are built, local versus global, redundancy, outsourcing, and so on. Once again, the change I see will be in how companies leverage some of the technology risk management tools to increase the visibility of their supply chains and rigorously drive business continuity plans and disaster recovery capabilities. In an environment like this one, it’s around really sensing what’s going on with demand, being able to collaborate quickly and react quickly all the way to your supply chain or supply base. So, I think this whole supply chain planning space and making it more of a continuous, collaborative, planning approach versus a more traditional SOP approach has the potential to get traction in the future.
Fidoten: Supply chains will certainly diversify with distributed manufacturing that has the ability to replicate capabilities in various regions, as opposed to single-sourcing from one country or even one region. There will be political moves that will encourage that everything needs to be made domestically. Hopefully that doesn’t happen, because that will end up leading us back to the 1920s and 1930s. It needs to be more of a balanced and measured approach, in terms of how much consolidation there will be, versus what I would call more of a distributive supply chain. I believe that’s going to be the core element of it.
Tate: What are the implications for leadership as a result of all of these changes? Are there new approaches or behaviors required in the way they lead in the future as a result of what they’ve learned during the COVID disruption?
Castro: Right now, companies need crisis leadership so they can leverage the tools they already have and make sure their employees are safe, particularly in manufacturing operations. I think that will change as we start to get over this hump. The focus will then be more on a transformative type of leadership, thinking of new ways of working that will drive more innovation. Being able to work remotely, not just supporting manufacturing lines but across the entire organization, will become a lot more critical, so leaders will need to embrace the digital enterprise model to accelerate their M4.0 journey. As an industry, we need more digitally aware leadership that goes beyond the traditional manufacturing and operational focus, and really thinks about how to leverage digital opportunities to lead real transformation across the whole enterprise.
Packer: Leadership is so consumed with just surviving through this at the moment and they’re not stepping back, or even assigning people to step back, and look at the process overall. What are truly essential pieces of work? What are not essential? Where do we have opportunities to apply intelligent databots or some automation for the task of translating all the data? We’ve got to go invest in that. Manufacturing has got to start making those investments.
Dwight: We’re already seeing the strengths and weaknesses in the ability of manufacturing company leadership teams to communicate. How clear is the communication in this crisis? How often does it happen? How concise is it? Is it on-point? There’s still a high level of anxiety and employees can sense that. Leaders have got to bring that anxiety down. As we move out of COVID-19, people are going to realize who the better communicators are. In the future, leaders will need to communicate more effectively and more regularly to keep their employees informed, reassured, and focused on how the business needs to change and what the business needs to achieve. I think that will be an increasingly important strength of good leaders versus weaker ones over the months and years ahead.
Holt: This pandemic has caused what I call a double black swan event. A humanitarian crisis and an economic crisis. Both those combined have required a different type of leadership. Business and manufacturing leadership has now become much more connected, open, and collaborative. Leaders have realized that if we don’t win together, we don’t win at all. And when we come through this pandemic, there will still be big problems to solve in this world like global warming and climate change. If business and manufacturing communities come together in the same way, we can solve these big problems too through technology, through collaboration, and through sharing. That, I think, is the kind of real winning leadership that is going to come out of this crisis and there will be some real implications for how successful companies lead in the future. The winners will be those with the long view in mind. M