The past 18 months have seen the COVID-19 pandemic disrupt global business operations significantly. The lockdowns in 2020 compelled many organizations to abandon conventional processes and adopt new technologies to ensure continuity. Presently, labor shortages, surging transport costs, and persistent travel restrictions continue to pose severe challenges to global supply chains.
The encouraging aspect for manufacturers is that the same technologies that proved invaluable in the initial stages of the pandemic can now play a role in mitigating the risks associated with supply chain disruption. Moreover, these technologies have become more cost-effective and accessible, enabling a broader range of industries to enhance operational efficiency, adapt to fluctuations in production demand, and address supply chain risks.
Disrupted supply chains & demand
Current headlines are dominated by disruptions in the supply chain, with widespread shortages of workers across various sectors, from agriculture and production environments to transport and logistics.
The worker shortages are partly due to continued self-isolation and illness, as well as limitations on cross-border travel, driving the demand for local worker reskilling. Moreover, industries have witnessed higher staff turnover rates over the past 18 months as the pandemic-induced disruption prompted workers to reconsider career choices, leading to gaps in employment and a loss of knowledge and experience.
Before the pandemic, U.S. statistics showed that 38% of manufacturers struggled to find candidates with the right skills. Today, that number has risen to 54%, according to the Workforce Institute at UKG. Global labor productivity growth has hit a 20-year low of less than -2%, marking negative growth for the first time since the global recession of 2008. A global shortage of shipping containers, inflated shipping and energy costs, and significant fluctuations in demand across industries are also contributing factors, increasing the demand for local products and placing additional pressure on local supply chains.
In March of last year, amid the peak of the pandemic, King Arthur, America’s oldest flour company, sold around 6.1 million bags of all-purpose flour—an impressive 268% increase from the previous year. While flour demand has stabilized since then, supply and demand fluctuations are causing challenges in many other sectors.
In the UK, high demand for CO2 is straining food and beverage supply lines, industrial sectors are facing disruptions in the production of extruded plastic goods, and shortages are evident in aggregates, cement, and plaster. Globally, there is increased demand for microchips (for automotive, home appliances, consoles, and mobile phones), furniture, and high-end luxury goods.
Many industries traditionally address fluctuations in demand, including seasonal demand, by employing short-term, largely unskilled workers to dynamically adjust production. However, these workers are not necessarily available today. So, what is the solution?
The past 18 months have underscored the tangible benefits of Industry 4.0, as businesses embraced automation to mitigate disruptions caused by COVID-19 and other unprecedented challenges like the Suez Canal blockage and geopolitical shifts. Governments worldwide are increasingly recognizing the imperative need to invest in manufacturing infrastructure, including smart systems and automation, to drive innovation, foster growth, improve GDP, and navigate the diverse disruptions to supply chains.
In managing recent supply chain disruptions, these same solutions can aid manufacturers in flexing production levels and reducing reliance on short-term labor. Leveraging Industry 4.0 processes and automating systems with limited operator intervention allows manufacturers to handle routine, manual tasks, thereby reducing the number of workers required on the plant floor.
Networking printers together streamlines product changeovers, enabling more production runs in a single shift, enhancing productivity, and offering greater adaptability to varying demand. New vision inspection systems ensure the accuracy of all product codes without depending on manual, error-prone checks. Integrating plant machinery and utilizing the cloud provides options for remote visibility and operation, allowing managers to oversee production activity from a distance.
Given the continued impact of social distancing on worker interactions on the production floor, connectivity becomes a powerful tool for manufacturers to maintain production flow, ensure the ongoing safety of their staff, and minimize the time spent by existing staff on training temporary workers.
Discussion of automated solutions and Industry 4.0 naturally raises questions about worker replacement. However, looking beyond the current crisis, these systems have a genuine role to play in the everyday operations of factories, working alongside production staff.
In the current environment, automated systems assist manufacturers in managing volatile demand and worker shortages. During periods of ‘normal’ demand, factory workers can dedicate more time to adding value in other areas of the business. This might involve identifying systems and processes for improvement or upskilling in specific work areas.
Embracing automation enables companies to foster a culture of continuous improvement, following the Kaizen philosophy. Utilizing data available through connected, cloud-based systems facilitates the easy identification of bottlenecks. Introducing automated solutions to address these issues streamlines processes, quickly unlocking additional benefits from automation. Starting small by implementing these processes on a micro-level can help justify the introduction of additional automation in the future.