Manufacturing Next

COVID-19 - A Global Manufacturing Supply Chain Disruption or Realignment?

 
July 29, 2020

The COVID-19 pandemic has disrupted life as we know it, across social and economic facets. In the business context, we call it disruption because it has affected the way firms work and communicate, and whether they gained or lost customers. For business owners, specifically in the manufacturing sector, the disruptions in supply chains have had a cascading effect, impacting sourcing, logistics, manufacturing, distribution, and aftermarket services. Naturally, it takes time to stabilize things and get back to normal. However, a new train of thought has emerged: post the pandemic, will it be business as usual or will things have changed for the better.

Since multifaceted changes are already happening across the value chain, it makes much sense to present a case for making this the ‘new normal’. For most manufacturing operations, the pandemic has inadvertently offered an opportunity to realign the development and redefine global manufacturing and supply chain networks.

Understanding the Repercussions of the Pandemic

As core product demand has decreased due to this disruption, some manufacturers have risen to the occasion and are building products that are in demand now. They have realigned their manufacturing capacities to build these new products. For example, in India, automotive manufacturers are manufacturing ventilators. Alongside, governments are playing a major role in enabling them by putting together a collaborative platform to create visibility into supply and demand, product specifications, and standards.

While this does not mean they will side track core business, but after this pandemic, manufacturers are bound to be agile and flexible to bridge the gap between demand and supply.

Agility and Flexibility: A Supply Chain Operations Perspective

The following steps will help manufacturers realign their supply chains in an agile and flexible manner:

  • Opportunities are abundant, so foray into new territories and diversify businesses horizontally:

    • For this, building new supply chains or realigning existing ones is necessary.

  • Create a work environment which is flexible and safe:

    • With less staff on the ground, design a strategy to work collaboratively with remote access to people, processes, and machinery.

    • Make plants safer places to work in view of restricted movements with revised operating processes.

  • Reduce over dependence on certain geographies or supply bases for delivery of raw materials, components, and finished/semi-finished assemblies:

    • Establish new supply bases for inventories and services.

    • Realign sourcing strategies.

    • Continuous supply chain risk evaluations and monitoring.

  • Optimize manufacturing processes and quality management:

    • Retrain existing staff with respect to new ways of conducting operations faster and safer.

    • Employ a machine-first approach.

  • Optimize sales and marketing, and aftermarket sales service networks:

    • While working remotely, ensure to stay connected with customers and create capabilities to address issues remotely.

A Complete Overhaul of the Global Supply Chain

That said, let us explore how to go about realigning supply chains in manufacturing. Being on the verge of a paradigm shift, manufacturing businesses need to move at a rapid pace and be ready not only for the current pandemic but also for any future disruptions. As a measure of unmovable resiliency, they must embrace risks and change the way they engineer, source, assemble, deliver, and service products by infusing innovation.

As much as this may increase the cost of doing business now, in the long run, scaling and automation will save costs. More importantly, manufacturers have the opportunity to leapfrog and gain a head start in business transformation through digital technologies such as the cloud, blockchain, internet of things, artificial intelligence, machine learning, digital twin, augmented, virtual, and mixed reality, and more.

Some examples of how digital interventions can help manufacturing organizations transform their supply chains and businesses are listed below:

  1. Cloud for fast-tracking the development of digital solutions.

  2. Private blockchains for faster transactions with transparency and foolproof assurance within the supply chain network.

  3. AI/ML in cognitive quality assurance, sourcing, procurement, demand forecasting, and more to bring in automation.

  4. AI/ML for planning, monitoring, and execution of logistics operations to bring in further efficiencies.

  5. AR/VR/MR in supply chain operations such as for voice-based inventory operations, digital twin for plants/critical operations equipment, voice-enabled auto-defect identification, and contactless/touch-less operations.

  6. AI/ML for video analytics to inspect assets, monitor social distancing, etc.

  7. IoT to integrate machines/equipment, fleets, and workforce for remote monitoring of manufacturing operations and to ensure plant safety.

  8. IoT along with AI/ML and AR/VR in aftermarket sales service operations for predictive health monitoring and over-the-air fixes.

  9. Virtual assistants (bots) for aftermarket sales service, manufacturing operations, and supply chain command center.

The implementation of these technologies will channelize their IT spend to transforming their business to create purpose-driven, resilient, and adaptable supply chains.

Conclusion

At the cusp of reinventing the status quo, manufacturers across the world have immersed their operations in a progressive run. For instance, a large automotive manufacturer in the UK is in the process of deploying an AR-enabled quality inspection process to automate operations and a tier-3 automotive component supplier has deployed AI-enabled cognitive quality inspection technologies. Besides these, original equipment manufacturers are also deploying IoT-enabled solutions to transform customer experience. As unwittingly as it came, the pandemic has set the wheels of rapid transformation in motion, and the only way forward is to adapt to the change.

Satish Chaudhari is a Director in the CTO unit of the Manufacturing and Utilities Business Unit at Tata Consultancy Services. He also serves as a Senior Consultant bringing over 25 years of experience in business IT applications across front-office and back-office systems on various platform. He has worked with customers across industries, specifically in the manufacturing and supply chain domains.