One of the major effects of the pandemic that many companies are trying to understand is the impact of remote working. Digital technologies enable not only administrative people to work remotely but also to conduct more aspects of operations remotely.

But the heightened need for digital technologies over the past year builds upon a trend that has been developing over many years. Companies have been slowly digitizing processes from design to manufacturing to assembly, with the goal of an end-to-end digital process in mind.

For more than 10 years, MLC has been tracking the implications of digital technologies on the way manufacturers organize themselves and conduct work. The theory is that the injection of advanced technologies into the manufacturing organization will over time reshape the structure of the organization and its decision-making processes.

What we have seen over the years is a clear shift from traditional command-and-control organizational structures to decentralized structures in which business units have considerable autonomy, a model that appears to be a sort of half-way house to a flatter, collaborative structure.

In our 2010 Leadership study, for example, 67% of the respondents said their companies were organized based on either a highly or somewhat centralized command-and-control model. The decentralized and collaborative models each garnered about 16%.

The results of our 2021 Factories of the Future study, published in February, clearly showed the seismic shift that has occurred. Only 6% remained with the command-and-control model, while 74% were in the decentralized camp. Interestingly, the collaborative model has barely inched forward from 2010, despite repeated expressions of intention by manufacturers to embrace it. Only 18% said this year that they had arrived at this organizational form.

But the tide, pushed by the pandemic’s inflection point, may be about to turn. In MLC’s new Leadership survey, 48.5% of respondents said understanding how the company should be organized as a result of advanced technologies is the number one challenge for leadership. That’s up a whopping 23 points from last year.

Seismic shifts take time. The collaborative model’s place in the sun may be just around the corner.– David R. Brousell