Forced to reconsider operations, manufacturers have discovered
they are as resilient as their technology.
  
By Tom Leeson

The global manufacturing sector is amid a crisis on a scale not seen before. At one point, according to BCG, more than 90% of manufacturing plants in Europe and 65% in the U.S. were closed because of COVID-19.  1  Plant closures were initially due to part shortages from China, but as the virus moved globally, the focus shifted to protecting workers and reducing the spread of infection. The health and safety of workers are undoubtedly top concerns of all manufacturers.

Amid this pandemic, the manufacturing industry is demonstrating great resilience. Companies across many sectors are repurposing their production lines to create different products when asked by governments to look at how they could use their capacity in innovative ways to help in the current crisis  1.

As the sector works to get through this crisis, there are a few changes that are becoming apparent regarding the future of the manufacturing industry and how it operates.

Remote Work and Virtual Meetings Will Become the Norm  

The sudden requirement for manufacturing companies to have employees work from home has been a wake-up call for many. A recent survey showed that 53% of manufacturing respondents admitted having no work-from-home experience3. Refining roles and putting in place the secure technology to allow this to happen is an ongoing challenge.

One complication of sending the workforce remote is that some functions, like product development and certain aspects of manufacturing, require high-performance computing that can be difficult to perform remotely. However, some companies had solutions in place that allowed them to adapt quickly. TDK-Micronas, an OpenText client, had already deployed a connectivity platform called Exceed TurboX to allow its engineering teams in Germany, China, Serbia, Austria, and the United States to collaborate on a centralized platform vs. through a local data center. When facility closures began, workers simply moved their desktop computers home and were able to continue working together without any reduction in security or performance.

“We were limited in our ability to collaborate between sites, due to the need to provide local copies of our design data at all sites involved in a design,” said Dr. Gernot Koch, CAD Manager at Micronas. “(Now) teams can be spread across sites without having to worry about data synchronization.”

Manufacturers may be getting more digitized for fundamental operations, but not for driving business growth.

TDK-Micronas was in a better position than many of its peers. According to the Manufacturing Leadership Council’s February 2020 Factories of the Future survey, most manufacturers are in the early stages of implementing M4.0 technologies for their processes and functions. While nearly half of respondents said they were in the intermediate stage of M4.0 technology adoption for production/assembly and equipment maintenance/installation, only 24.2% said they were at that same stage for R&D.

All this is to say that manufacturers may be getting more digitized for the blocking and tackling fundamentals in the factory that will keep production lines running, but they aren’t necessarily advancing on things that drive business growth. The investment for R&D and product design hasn’t yet reached that same level.

While technologies like these can make it easier to send workers remote, there are other challenges that arise.

During any crisis, bad actors are on the lookout to strike, and so in this new normal cyber-resiliency has become ever more important.

According to security company Webroot, more than 136,000 new domains have been registered in recent months that reference the current COVID-19 outbreak4. A large portion of these sites are distributing phishing campaigns through fake bank login pages and inaccurate URLs, which include any number of pandemic buzz words.

To help with the transition to remote working, market researcher IDC advises organizations to take the following steps:

  1. Prioritize making the remote working environment cyber-resilient to keep employees and their data secure5.
  2. Protect your business data with backup and disaster recovery solutions6 so in the event of a ransomware attack hardware can be isolated and information recovered6.
  3. Deploy a mandatory global compliance training program to keep employees, partners, and customers safe.

Digital Transformation in Manufacturing Will Accelerate 

The current crisis has highlighted the areas of weakness in digitization for many plants and supply chains. Just two years ago, 84% of manufacturers were telling SAP that digital transformation was crucial, but only 2% had completed any company-wide effort7.

Many analysts and management consultants are predicting the acceleration of digital transformation because of this pandemic. It is often said that manufacturers come in two types, thrivers and survivors, and they adopt new technologies at a completely different pace. For some organizations to change it often takes a compelling event. It is fair to say the pandemic is such an event. Change is coming fast. Manufacturers have little choice but to become data-driven to build the resilience, agility, and scalability they need to react rapidly to the uncertain and chaotic trading environment they face. The good news seems to be that manufacturers are up for the challenge.

Actionable Advice for Dealing with the Crisis 

Market researcher Gartner recommends several short- and long-term actions that CIOs can take to help them deal with the crisis8.

Short-term actions:

  • Source interim digital collaboration tools to enable employees to work remotely, ensuring security controls and network support are in place.
  • Work with business leaders to conduct workforce planning to assess risk and address staffing gaps. Reprioritize demand and balance staff by shifting personnel from areas of lower priority.
  • Engage customers and partners via digital channels to maintain relations. Repackage product offerings and sell them through digital channels.
  • Establish a single source of truth and communicate that to employees.

Long-term actions:

  • Develop a digital workplace strategy that includes collaboration applications, security controls, bring-your-own-device (BYOD) programs and network support.
  • Identify alternative employment modes and digital technologies that can empower employees and automate tasks.
  • Develop digital product extensions, expanding to new channels and enabling new business models to increase business resilience and prepare for growth.
  • Contribute to data-for-good programs to improve data literacy and increase adoption of a wider range of data and analytics too.

Now that the industry has moved past the initial crisis response phase, it’s time to consider longer-term strategies for recovery and possibly creating a new plan for technology investment. It’s a good time to make sure your organization builds its digital resilience, whether it’s for recovering from this crisis or preparing for the next.   M

Footnotes

1. https://www.linkedin.com/pulse/stabilizing-manufacturing-operations-response-covid-19-daniel-kuepper/
2. https://blogs.opentext.com/accelerating-digital-transformation-in-manufacturing/
3. https://www.manufacturingglobal.com/leadership/covid-19-manufacturing-prepared-home-working
4. https://www.webroot.com/blog/2020/04/10/cyber-news-rundown-malicious-covid-19-websites-surge/
5. https://www.webroot.com/blog/2020/04/28/5-ways-to-improve-business-cyber-resilience/
6. https://www.carbonite.com/blog/article/2020/03/how-to-stay-cyber-resilient-during-the-coronavirus-pandemic
7. https://www.forbes.com/sites/adigaskell/2018/06/08/the-slow-pace-of-digital-transformation/#3934c313491b
8. https://www.gartner.com/doc/reprints?id=1-1YQBZMR3&ct=200406&st=sb