Manufacturing businesses are becoming increasingly predictive, adaptive and responsive as a result of improvements made following 18 months of disruption, lockdowns and shortages.
Almost three-quarters of manufacturing executives (74%) describe their organisation’s current production operation as ‘highly agile’ or ‘extremely agile’.
This is a sizeable increase on the rankings given prior to the global Coronavirus pandemic, with three in five (59%) describing their manufacturing agility pre-COVID in such positive terms.
According to industry decision makers, the recent increase in manufacturing agility is as a result of improved internal data collection, sharing and analysis, as well as greater communication and collaboration.
These improvements, and more, are explored in a major new report published by The Manufacturer and HSO.
The 2021 MANUFACTURING AGILITY ASSESSMENT reveals that just 2% of executives believe their organisations have ‘little to no’ manufacturing agility, and becoming continuously more responsive is a board-level priority for almost two-thirds of manufacturers (63%).
Other KEY FINDINGS include:
- 75% of manufacturing decision makers say the business area most affected by the pandemic was sourcing raw materials and/or component parts
- A combination of accelerating investment in strategic areas, such as product development, and pausing building or infrastructure investment were the most common strategies executed to mitigate the impact of COVID-19
- 71% of manufacturers surveyed intend to establish more local production and supplier networks
- The majority of digital strategies have a strategic focus on becoming more data-led, automating processes (admin and physical) and improved planning and/or scheduling
- As a result of COVID-19, 84% of manufacturers are now interacting with customers more frequently via digital tools, and 50% are using social media platforms for market research and marketing
- Additionally, 55% of manufacturers now have more open and collaborative relationships with suppliers
- 69% of manufacturers aim to become more environmentally sustainable over the coming 12 to 24 months, and 63% intend to increase their manufacturing agility further
- However, recruiting, retaining and upskilling staff is the primary growth barrier for manufacturers, followed by global economic conditions and a lack of digital connectivity
The report makes it clear that manufacturers are placing far greater emphasis on automation, actionable intelligence and flexible scheduling than previously.
It also highlights the ways in which industrial businesses are forging deeper, more meaningful relationships with their customer base. Supplier interactions have undergone a similar evolution, with many manufacturers keen to leverage the benefits provided by more effective supply chain management.
Commenting, Henry Anson, Managing Director of The Manufacturer, said: “Agile manufacturing involves engaging with every business area and stakeholders at every level. Being so multifaceted makes achieving it a complex proposition, but it’s a journey many have started in earnest.
“As this report shows, manufacturers have taken substantial strides towards dismantling the barriers separating parts of their own organisation, and I expect the integration of customer and supplier processes into their operations to be a major focus moving forward.”
Encouragingly, manufacturers are showing a greater appetite for bringing production closer to home – a trend known as ‘reshoring’.
Almost three-quarters of decision makers (71%) surveyed said their organisation intends to establish more local supply chains, and a further 27% intend to move certain production processes in-house.
This is on top of the 15% who have already reshored some production, and the many manufacturers who have already started working with local suppliers.
This positivity continues in the strategic objectives for the coming 12 to 24 months. The majority of manufacturers are aiming to become more environmental sustainable, a goal supported by further investment in their people, premises and processes.
Mark Breeden, Senior Account Manager at HSO, said: “Virtual collaboration, service reporting, machine learning and cognitive services are changing the way technology is impacting our working life.
“Twelve months ago, Teams was a group of people playing sport together. Not anymore. It is now known as a tool which enables people to collaborate. Yet, one thing is missing in this fast-paced world. Investments, whether short or long-term, need to have user adoption at the centre.
“With the cost benefit of using technology to support Enterprise Asset Management and even Field Service now a given, the issue has become whether your workforce can adapt to adopt, will they be able to accept change and support it?”
The Manufacturer’s Henry Anson continued: “Being able to predict and adapt relies as much on adopting the right mindset and creating cultures of innovation as it does using technology and data.
“Decision makers need to understand the technological and cultural barriers that prevent their organisation from becoming more agile in unison, and act to address them.
“In a world of heightened competition and evermore demanding customers, the imperative has never been greater.”
The 2021 MANUFACTURING AGILITY ASSESSMENT is based on a survey of senior manufacturing professionals conducted in May and June 2021 by The Manufacturer and commissioned by HSO. A number of respondents were interviewed to add qualitative content to the quantitative research.
In the context of this survey, an ‘agile’ organisation is one that is:
- connected (staff, customers, processes and technology),
- acts swiftly and decisively,
- and, responds proactivity to both challenges and opportunities.