The National Association of Manufacturers released findings of a survey from manufacturing leaders examining the economic and operational impacts of COVID-19. 53.1% of manufacturers anticipate a change in operations and 35.5% are facing supply chain disruptions. With all-new freight and travel restrictions on both local and global levels, manufacturers must reassess their supply chains in rapidly, ever-changing circumstances. We anticipate increased volatility both in demand and supply.
To manage this volatility during this unprecedented time, enterprises need to improve their foresight into demand and supply by putting their data to work at a very high granularity. Since they cannot rely solely on historical data anymore, they must leverage a combination of internal data and external influencing variables to improve forecast accuracy and inventory turns, and optimize their operations in real-time.
On the demand side, we expect an overall decline due to a weakened economic climate, as well as fluctuations at a micro-market level driven by local regulations with regards to controlling the spread of the virus. On the supply side, we’ll likely see continued disruption depending on the ability to staff up and productively run manufacturing facilities — likewise on a very localised level.
Moreover, we’re also seeing a dramatic increase in supply shortages in the medical device, equipment and consumables sectors. Many manufacturers are seeking new, nontraditional suppliers with primary or alternate part and assembly availability. Manufacturers who traditionally do not serve the medical industry are ramping up capability to respond directly to the increasing pressure on the health system and associated shortage of critical care equipment such as ventilators and protective wear including face shields, masks and gowns. In certain circumstances, we are seeing consumer and commercial electronics device manufacturers providing key components from their inventory to medical device manufacturers, too. This unique circumstance caused by the global COVID-19 pandemic requires manufacturers with critical components to share their inventory, by assuming logistics responsibility or relying on established providers.
Artificial intelligence to accelerate digital transformation
Artificial Intelligence (AI) can help manufacturers accelerate their digital transformation across the value chain at scale, achieving operational and cost efficiencies in the process. Take for example, navigating a rapidly changing market. AI can power forecasting and optimise logistics. It can predict disruptions in the short-term by leveraging data from external sources — such as weather, traffic, transportation cost, and competitive and raw material pricing — to remove the guesswork and provide some level of certainty during these uncertain times. Additionally, combining AI with data from multiple sources, including ERP systems, manufacturers can conduct better forecast demand and adapt their operations in real-time.
In the short-term, the other challenge is how to keep the floor running in an environment of reduced worker capacity and increased requirements for worker safety. Managers now have to consider distance between workers and voluntary reporting of potential illness. At Google Cloud, we’re developing easy-to-use solutions based on interoperability, analytics and machine vision that help our customers to remotely monitor and manage their operational technology, mitigate risk of health-related absenteeism, ensure worker safety and reduce the amount of manual labor needs in the factory, particularly for quality control processes and procedures. Manufacturers can further leverage these AI tools to enhance worker capabilities and drive greater optimization both now and in the longer-term, too.
Adapting to new ways of working
Now more than ever, it’s critical to enable successful, efficient remote workforces where teams can still stay connected and collaborate, even when there may be skeleton crews at factories and plants and more people working from home. The leading projects, portals and initiatives to succeed will be those that are sensitive to the fact that we must adapt to a new way of working that observes social distancing.
Manufacturers ensure that employees who are in various time zones can easily and quickly access critical files and participate in virtual team meetings, joining securely from their personal devices, often in an ad hoc manner. They must be able to effectively communicate — whether that’s through a live stream for up to 100,000 employees, supporting an interactive team meeting for up to 250 people or facilitating urgent communications with 1 to 5 people.
Most importantly, it’s not only about having the foundation to manage, but it’s about using technology that will expedite success.
This insight is part of techUK's Cloud Week 2020. You can find related news and insights here.