Five strategic actions manufacturers can take to rebound stronger from the crisis

Manufacturers are at a critical juncture. In the time immediately following the pandemic crisis, efforts concentrated on keeping workers safe and managing business continuity. Now as manufacturers prepare to rebound from the crisis - and even reinvent their business - they must address a number of key questions essential to navigating the next steps in an uncertain future: What are the learnings from the pandemic that can help bolster the rebound? What are the next steps to begin improving operations? What are the key objectives of these improvements? How will these steps help reinvent the future?

Various manufacturing sectors face different impacts from the COVID-19 pandemic. However, based on our client conversations, we’ve identified the following key objectives for all sectors to consider to help rebound effectively and reinvent operations to mitigate the risks of similar future disruptions:

• Build resilience: Allocate manufacturing in a more resilient way across regions/continents to decrease risk exposure and minimize loss in capacity or product quality
• Create agile supply chains: Improve manufacturing agility to more easily switch suppliers of raw material or components when needed
• Explore automation: Seek to make the manufacturing process less dependent on scarce manual resources to prevent future disruption
• Identify “quick wins”: Boost financial buffers by determining quick ROI opportunities to mitigate the financial impacts of the pandemic

With the objectives clearly outlined, the next step is to identify an action or set of actions to achieve them. Using CGI’s manufacturing maturity model, we’ve identified five strategic actions designed to help achieve rapid results within a year.

1. Digitize to improve manufacturing control

If you have not done so already, this is the time to lay the foundation for digital manufacturing control systems. Knowing in near real-time the status of production orders, inventories, quality control and maintenance is fundamental to an agile response in times of disruption. This may include implementing a manufacturing data infrastructure, and in some cases digitizing certain critical assets for performance transparency.

2. Harmonize processes across all production sites

For many companies, a big hurdle in moving production from one location to another is the different production assets at each location. With different assets, the production “recipe” has to be altered to plant-specific assets. This alteration is usually done manually and is very time consuming. Harmonizing the manufacturing execution system (MES) and product lifecycle management (PLM) system across critical sites enables production flexibly. Moreover, when processes and systems are harmonized more, innovations, in general, can be rolled out much faster.

3. Become more insight driven; make advanced analytics a habit

The CGI Client Global Insights reveal that 87% of manufacturing client executives identify data and predictive analytics as their top investment priority within three years. For manufacturers, an insight-led approach, can typically yield double-digit savings in energy, waste management, maintenance and yield. Of late, we also see clients benefit from improvements in areas like customer service response. For instance, service centers fielding technical questions from customers have seen response times shrink from days to minutes using artificial intelligence (AI)-powered Natural Language Processing (NLP) systems that plough through thousands of pages of technical manuals and specifications in seconds. This not only saves time and money, it provides a competitive edge and more revenue.

4. Apply risk-based optimization

Before credit card companies take on a new customer, they first evaluate the customer’s profile to assess their risk. By putting together key information about a potential new customer, and mapping it against profiles developed through AI, they create a risk/benefit indicator. Manufacturers can use this same mechanism to assess risks related to individual suppliers, a portfolio of suppliers, and the portfolio of products produced at a particular site, and to determine how to spread production across available sites. Every site has its own risk signature, and minimizing your portfolio of risks by allocating manufacturing capabilities is an insightful exercise.

5. Implement Smart Manufacturing Infrastructure (SMI)

Almost any smart manufacturing initiative requires communication with assets in the manufacturing plant. However, investments for installing a wired network are often prohibitive, with the added limitation of being unable to cover difficult or dangerous locations. Wrapping a wireless network at your site is a great alternative. Combine it with swapping old lighting out for new LED lights and you have made your business case.

Given that different manufacturing industries are at different maturity levels and have been affected differently by the pandemic, we’ve created the below matrix that maps the five actions to the objectives they support, the relative impact on operations, and the investment and lead time required. Use this diagram to evaluate your unique situation and prioritize actions accordingly.

* - Low impact; ** -  Medium impact; *** -  High impact

Enabling agility to reinvent the future

In the longer-term, manufacturers will experience fundamental changes in the way they operate. Driving agility will be key to navigating the new normal. Leading manufacturers are looking to outsource the management, development and support of their operational technology and systems to a partner that can accelerate the necessary transformations.

A key consideration in this process is defining clearly “which systems are specific to each plant” and “which systems are to be harmonized enterprise wide”. Having more systems harmonized enterprise-wide will support better sharing of best practices, faster innovation, reduction of myriad local legacy applications and enhanced plant system security. By deploying tried and tested portfolio transformation processes, it is possible to turn this program into a highly beneficial exercise. For instance, CGI helped a global mining company redesign and harmonize processes across eight plants in one geography. This enabled them to streamline operations and launch a centralized operations center that controls the operations of all eight plants. For a large global dairy company, we provided an MES standard template to support harmonization of operations in 17 different plants.

We would be interested to learn your thoughts about this approach and how your organization is preparing to rebound and reinvent for the future. To continue the conversation, feel free to reach out to me at marcel.mourits@cgi.com.