Rethink Manufacturing: Are your operations resilient enough for the post-COVID world?
- Posted on April 16, 2021
- Estimated reading time 5 minutes
As we have mentioned in our last post about keeping employees safe, it’s past time you were ready for the post-COVID era. Either this new era has already reached you or it’s on the way. Either way, the manufacturers who thrive in this new world will be the ones already implementing new ways of doing business. This isn’t a goal for the future; it’s a goal for today. The tools and expertise exist. You just need the will and wisdom to use them.
Wherever you are on your post-pandemic journey, there’s a lot to do. Avanade sees three transformative challenges facing manufacturers: enhancing the workplace and worker experience, strengthening operational and supply-chain resilience, and creating agile and adaptable enterprises. We discuss these in detail in our new guide, Manufacturing Industry 4.0 Solutions. We introduced the workplace and worker evolution, and now, some thoughts on operational and supply chain resilience.
The past year was surely as much proof as anyone needed that resilient operations and supply chains are essential. A stunning 94% of Fortune 1,000 companies experienced supply chain disruptions due to the pandemic. Many of those that depended on single suppliers for crucial materials or single processes for operations saw some or all of their manufacturing grind to a halt. The rolling impact of those disruptions is still being felt; by 2027, half of all S&P 500 companies may no longer exist. And the next pandemic could be worse. Or attacks on the power grid or natural disasters could be just as devastating. You can’t say 2020 wasn’t a wake-up call.
The outlines of your response are clear. Build resilience within your operations and create a scalable foundation for the future. Adopt new business models and tools that diversify your supply chain. Ensure your supply chain and operations support sustainability and operate ethically. Optimize existing investments and assets.
Admittedly, those are broad directions. As a way to think about getting started, here are scenarios we’re implementing with clients today:
- Productivity: Improve machine efficiency and OEE by Replacing outdated or manual maintenance systems with an intelligent, connected Enterprise Asset Management solutions—without replacing existing back-office solutions.
- Automate: Leverage Intelligent Automation (RPA++) to handle the manual processes across your operations that require data and steps outside your core systems (Backlog, Invoicing, collections, inventory & asset management).
- Collaborate: Facilitate on-the-ground communication among employees, customers and partners with digital collaboration tools.
- Predict: Simulate disruptive events in your supply chain and operations and develop a preparedness plan before “Murphy” strikes.
The effort may be considerable, but so are the benefits. Addressing immediate resilience issues can help manufacturers achieve aggregated cost savings of 15% to 25%, and savings may be the least of your gains. You can become more adaptable, better able to meet new challenges and manage risk when dramatic shifts in production occur. You can increase business value and ROI by reducing costs associated with lost production. You can replace antiquated, on-premises business systems with modern, flexible, cloud-based business applications that drive improved insight into sales, marketing, production and supply-chain operations, and that support circular business models that foster sustainability. And of course, you can minimize the occurrence and impact of supply-chain and manufacturing operations.
Among the companies that are achieving some of these gains right now is BMZ Group, a leading maker of high-tech battery systems. The global company, based in Germany, had limited visibility into materials and capacities on the factory floor, impacting its ability to keep production moving smoothly. For BMZ Group, we used Avanade Intelligent Enterprise Solutions to implement Microsoft Dynamics 365 for Finance & Operations. Workers now have a simplified, intuitive way to control logistics and production work from Dynamics 365, so they can quickly prepare or replan production flows seamlessly. Material planning is more consistent and product quality is up. Greater reliability means improved customer service. The company now knows what transactions take place in its warehouses and production plants and can scale to meet the growing demand for its products.
BDR Thermea, a global maker and distributor of sustainable and smart climate and sanitary hot water solutions and services, had a different manufacturing challenge: how to differentiate itself in an increasingly competitive market. It saw better service as that differentiator. We helped it with an Internet of Things (IoT) Connected Services platform that integrates with Azure to capture the status of BDR Thermea’s connected devices, so the company gets better, faster warnings of potential issues it can then address more quickly. The result cuts the volume of service calls by a robust 60% and is expected to reduce service operational costs by 10%.
We are helping manufacturers around the world to turn the post-COVID era into one of tremendous opportunity. Maybe you could benefit from our Express EAM offering to begin your journey to a world class Enterprise Asset Management solution. Maybe you could use our Avanade Intelligent Enterprise Solutions and Dynamics 365 to infuse your operations with the intelligence and flexibility to meet post-pandemic challenges. Download our new guide, Manufacturing Industry 4.0 Solutions Practical Guide or you can contact us today to discuss the best solutions to address your immediate manufacturing challenges or simply visit www.avanade.com/manufacturing for more.