How Manufacturers are Improving Resilience in 2023
Published on : Tuesday 03-01-2023
The most important way manufacturers are improving resilience in 2023 is by learning from the lessons of the past few years.
Global supply chain issues, ongoing labour shortages, and rising inflation have defined the past two years for consumers and manufacturers alike. These economic challenges have become so long term and all encompassing that it's not enough to call them simple disruptions anymore. The Economist has defined this new paradigm as the ‘shortage economy’, and increasing resilience is the only way to adapt to it.
As the manufacturing community enters 2023, some are better positioned for success in the New Year than others. But what sets the top companies apart from the rest? Here are four ways manufacturers can improve resilience as we enter 2023:
1. Explore digital transformation
Even before the labour shortage, manufacturers were slowly implementing more and more automation. In 2021, leaders at McKinsey acknowledged that up until the pandemic, the idea of Industry 4.0 was mostly ‘hype’, but the disruption in the labor force served as a wake-up call for many executives in the industry.
Now, digitalising operations forms a bedrock for current and future resilience, and helps manufacturers move with more agility. Nimble supply chain technology can help business leaders quickly identify material shortages or bottlenecks and find new suppliers or routes to avoid delays. Predictive maintenance systems can optimise repair schedules to minimise downtime and loss of revenue for faster recovery.
2. Reskill workers
Since so much relies on successful technology implementation, manufacturers need a skilled workforce that's adept at working with robotic equipment and computers. Coding proficiency is becoming increasingly beneficial to all companies.
Just before the pandemic, McKinsey published a report that found nearly half (43%) of manufacturing executives were struggling with skills gaps in their organisations. The most resilient companies are heavily investing in reskilling their employees with both on-site and third-party training to make up for the current technology skills gap and to get ahead of the problem before it becomes even worse.
3. Enable 'Knowledge Transfer'
Loss of traditional manufacturing skills is almost as great a threat as lack of tech proficiency. Over time, loyal employees master their work and develop institutional knowledge that helps manufacturers achieve massive efficiency gains. But an estimated 50% of manufacturing employees in operations are set to retire over the course of the decade. As more of this seasoned labor force retires, overall productivity might suffer as they're replaced by eager, but less experienced, workers.
Resilient companies are creating structures to encourage more knowledge transfer between senior workers and new hires. Some accomplish this through mentorship and job shadowing programs where young employees apprentice under more experienced ones. Some companies even utilise senior staff as guest teachers in training programs, or hire them as part-time educators after they retire.
4. Reduce waste throughout the value chain
Digital transformation, reskilling, and knowledge transfer can have an outsized impact on a manufacturers' bottom line, but it's impossible to directly control their outcome. What manufacturers can control is their operational efficiency. The most resilient companies in 2023 will be those that recognise that small savings add up to big value, and aggressively reduce waste wherever they can.
Something as simple as cutting fluid maintenance can generate cost savings in nearly every budget category. Implementing proper coolant management procedures will extend its useful life and minimise purchase volume throughout the year. Higher performing cutting fluid also provides better cooling and lubrication, which extends tool life. Minimising machine downtime due to unexpected fluid related issues keeps productivity high and also improves labour efficiency. Over the course of the year, this can add up to tens of thousands of dollars or more in savings, increasing profit or positioning a manufacturer to remain resilient in the face of future challenges.
Lessons learned: the true mark of resilience
The most important way manufacturers are improving resilience in 2023 is by learning from the lessons of the past few years. The pandemic has caused a paradigm shift, upending many assumptions that manufacturers had about the supply chain and forcing the industry to reevaluate priorities, strategies, and goals. Manufacturers can achieve true resilience by facing challenges head on and adapting to overcome them.
Article courtesy: Master Fluid Solutions, USA. Master Fluid Solutions develops and markets a full line of specialty cutting and grinding fluids, cutting oils, concentrated washing and cleaning compounds, and rust preventives under the TRIM® and Master STAGES™ brand trademarks, and has a strong global presence with distributors in every industrial manufacturing sector.
