According to a recent survey by the United States’ National Association of Manufacturers (NAM), by mid-March this year 78% of manufacturers were expecting the COVID pandemic to have a financial impact on their businesses, and more than 50% were anticipating a change in operational procedures. Over the past few months, we have seen most of our customers change the way they operate but, perhaps surprisingly, output has tended to remain steady. This suggests that some early fears within the industry – thankfully – might have been overestimated.
Notwithstanding the impact of the pandemic on supply chains, which has affected some sectors of the manufacturing industry more than others, it seems that the main impact of COVID is a reduced physical presence at the plant. Many customers I recently spoke with have pared-down their on-site presence to the crew size required to make any necessary adjustments to processes and equipment, while everyone else works from home.
Clearly, this approach has been made possible by modern advances in digital technology. It is fortuitous that most manufacturing organizations had long realized the potential of data and analytics as competitive differentiators. More recently, many have invested in technologies that leveraged their existing data infrastructure – and more importantly their local subject matter experts – to improve internal communications and allow engineers and operators to proactively monitor their key processes with real-time analytics in order to anticipate and address potential issues before they negatively impact operations.
During the COVID pandemic, these analytics platforms have offered even further value by enabling manufacturing companies to supervise their plants remotely. Companies that already had these systems in place were able to quickly reduce their physical presence while still observing that plant’s processes and equipment.
As remote plant monitoring with real-time analytics platforms has increased, so too have workers’ ability to collaborate quickly and clearly with those platforms supported by communications-specific tools such as Zoom, Cisco WebEx, Microsoft Teams and GoToMeeting that have seen exponential use since the start of the pandemic. Many companies are now reliant on them for communication and collaboration, within and between organizations, and the manufacturing industry is no different.
And while most manufacturing companies have been embracing real-time analytics for several years, the challenge presented by COVID was how to connect those people working from home to the skeleton crews presently running the plants in order to make any necessary adjustments on site in a timely manner. Whereas six months ago, these outputs and signals were relayed by standard interpersonal communications, along with their inherent nuances, those same outputs and signals now need to be relayed by communications tools – from engineers working remotely, for example – instead of in person. The tools enable plant teams to do what they need to do just as effectively, despite the dislocation of much of the workforce.
Adapting to this new work dynamic is similar to many other big changes in the history of manufacturing. The difference this time is that the technology is already available to help facilitate the changes that need to be made.
It will be interesting to see how many of these changes become permanent – the new normal. Smart companies will come out of the pandemic with a more sustainable, less risky way of working. For example, having fewer people at a plant requires less overhead (e.g. less office space, potentially lower insurance fees) and a reduced overall risk profile. These factors could offer a competitive advantage and drive permanent changes in at least some sectors of the manufacturing industry.
It could be argued that many of these changes would have taken place anyway, in the fullness of time, but the pandemic has hastened the uptake and application of the relevant technologies. With that in mind, companies might be advised to thoroughly review those changes to understand which ones can potentially strengthen their market positions.
The situation could also place added pressure on companies lagging in their uptake of digital technologies. To companies now rushing to ‘catch up’ with the competition, I would caution “more haste, less speed.” As manufacturers across the world rush to transform into digitally centric organizations, most efforts will fail to achieve success. Industry analysts estimate that as many as 85% of Digital Transformation projects fail. This high failure rate, which often reflects a lack of understanding about the steps required to achieve successful Digital Transformation, could be the final straw that breaks a lot of companies in a post-COVID world. As explained in our recent Whitepaper, the three steps to a successful Digital Transformation will always be:
Step 1: Identifying the problem(s) to be solved.
Step 2: Acknowledging and planning for the human side of change.
Step 3: Ensuring that the technology chosen is fit-for-purpose related to the identified problems and an organization’s capabilities.
Smart manufacturing organizations will place a priority on moving quickly – but deliberately – through those steps as they close the digital transformation gap.
Finally, it is vital to remember that before, during and after this pandemic, a company’s assets will always be its people. As more and more companies embrace and enhance the technologies necessary to remain productive and competitive, those people must be engaged not just in the technology used to monitor the plant and its processes, but also in new ways of communication and collaboration. Smart companies will find ways to leverage these technologies in a more sustainable, less risky way that can be used to a competitive advantage.
