Leveraging advances in supply chain automation and AI, businesses can set themselves on a winning path for 2021, says James Sopwith, group strategic account director at adi Group.
2020 has seen dramatic shifts in the daily operations of UK manufacturing and engineering. Reduced capital expenditure, limited workforces and depleted supply chains are just some of the effects that COVID-19 has had on the industry, and ones which will no doubt leave lasting ramifications.
But managing this new normal, while no doubt challenging, will give business owners the opportunity to eventually thrive in an altered landscape.
One impact of the pandemic on UK manufacturing was its ripple effect on supply chains. Businesses that relied on offshore supplies found production grind to a halt, while the transportation of goods and services at home was affected by reduced employee capacity.
As we move forward, this will set cause for many businesses to look at a revival of domestic manufacturing. While a return to 1970s levels, where manufacturing contributed to 25 per cent of the UK GDP, seems unlikely, there will be a strong push for homegrown incentives for operational resilience and sustainability.
This has been backed by chancellor, Rishi Sunak, vowing to spend a record £600bn on infrastructure in the next five years, of which UK manufacturers will be at the heart.
In manufacturing supply chains, there is a case for automation to build a solid operational foundation. Here, the pandemic highlighted the digitally savvy processes that manage supply and demand in times of crisis. For example, the increases in certain food items during lockdown. While simply producing more bread, pasta and flour may help in some effect, it’s more strategic, logical and cost-saving to be led by intelligent data systems, that discern which item is selling most, for efficient production.
With Industry 4.0 edging closer, production data, assisted by technology such as the Internet of Things (IoT) and sensor networks, is no longer simply a concept for a faraway future, but is here revolutionising our industry today.
In 2016, there were 71 robots per 10,000 employees in the manufacturing industry. Fast forward a couple of years, and it’s estimated that over 2,000 industrial robots were operational in the UK, and that figure is ever growing. We’ve seen how firms such as Ocado are innovating the market with their robotic picking and packing technology, and by employing these processes domestically, firms can look to create new jobs and opportunities for digitally savvy workers moving forward.
At adi, we’ve seen this transformation first-hand, with our automotive LEAN manufacturing team recently experiencing a double-digit employee count growth, amidst the pandemic. With its hand firmly in developing the machinery that assists collaborative robot technology, it’s startling evidence that automation doesn’t lead to the stereotypical ‘killing off’ of ‘boots on the ground’, but rather substantiates them.
Collaboration and artificial intelligence
Another lesson learned from the pandemic concerns the strength of business partnerships, which will have no doubt been tested in 2020. Many manufacturers had to quickly look at ways of ensuring continuity across supply chains, and any cracks in the foundations, whether it be too narrower client base or set of suppliers, will have been uncovered.
Therefore, in 2021, businesses should hedge their bets on suppliers that can meet localised demands across multiple geographies, and offer 360-degree turnkey solutions that manage risk, accuracy and flexibility. This has enabled us to continue operations, offering flexible, pragmatic thinking that helps manufacturers stay operational whilst getting best in class advice on equipment to advance output.
As the focus only increases on supply chain visibility and coordination throughout this period, so too should business owners’ look to digital tools that will help better inform policies and business decisions.
For example, McKinsey analysis suggests that companies that embraced AI and IoT technologies in the past decade are already seeing a seven per cent revenue growth advantage over their peers due to greater efficiency.
Investing in digital
In the past six months, businesses have been forced to consider all technological touchpoints along the enquiry and sales process.
In manufacturing, this has seen businesses invest in remote diagnostic, management and collaboration tools, which have helped reduced employee numbers on site. This has been crucial as many have lost up to 50 per cent of their on-site personnel due to social distancing measures.
This virtual shift, whereby specialists can remotely support onsite operations will be tremendously productive moving forward, delivering a new reality where manufacturing facilities can still be operational even if the lights are out and nobody is physically home.
We understand balancing the books will always be a key dichotomy with technological investment. However, by leveraging advancements in areas such as supply chain automation and AI, businesses can set themselves on a winning path for 2021 and beyond.
James Sopwith, group strategic account director, adi Group