The 2020 pandemic has stress-tested our manufacturing systems and global supply chains in unexpected (and unwelcome) ways. It has revealed new vulnerabilities and exposed old inefficiencies. New technologies have helped the manufacturing system adapt, but not as much as we could have wished. Could the pandemic shock now open the way for a change of pace in manufacturing innovation?
Philip Stoten, CEO of SCOOP, posed this question to a group of the most influential manufacturing executives, the “What’s The SCOOP 50” group (WTS50); their answers provide a number of penetrating insights on the transformation we can expect in manufacturing and supply chains in the coming years (the full answers are on Philip Stoten’s LinkedIn feed here.)
First: the combination of multiple disruptions and a global recession creates an even more competitive environment than ever before, where the stakes for successful innovation become as high as life and death for many companies: “Supply chains have been torn apart, and the global vacuum of demand continues to push poorer performing manufacturers out of business. Conversely, the strongest and most innovative companies are surviving and even thriving, and coming out on the other side leaner, meaner, and with a reduced field of competition” says Theo Saville, founder and CEO of CloudNC. Yoav Zingher, founder and CEO of Launchpad.build agrees: “In a static world, lower prices are the easier way to compete. But in a world of rapid change [..] the best way to compete is to be one step ahead of everyone else, by being flexible and adaptive.” With consumer demand still subject to high uncertainty, companies are under enormous pressure to improve margins – leveraging innovation to raise efficiency becomes an urgent imperative.
Second: painful as it has been, the pandemic shock has brought greater clarity of vision. “For many engineering teams, the pandemic has clarified exactly what is most urgent about ‘digital transformation’” says Anna-Katrina Shedletsky, founder and CEO of Instrumental. “While it  showed the manufacturing industries’ impressive will, creativity and capability, it also exposed weaknesses in the way goods are made and the way supply chains are managed, underlining the need to transform from the old ways of doing business to something more agile and resilient” adds Dave Evans, founder and CEO of Fictiv.
Third: most manufacturing companies believe that the answer lies in accelerating the adoption of Industry 4.0 digital technologies. Fictiv’s Dave Evans has no doubts: “I fully expect 2021 to be a year where digital transformation really takes hold. We now know that transformation is not just a “nice to have”, but essential for factories, companies and manufacturing ecosystems.”
According to Amar Hanspal, cofounder and CEO of Bright Machines, “Covid-19 has shone a light on the importance and value of digitizing and automating factory operations.” He also believes that by enabling more localized and smaller-scale production, this digital transformation will both democratize and accelerate product innovation. Liam Casey, founder and CEO of PCH International, sounds a similar note: “I think it [the pandemic] has underscored all that is wrong with traditional manufacturing models and exposed the strengths present in many digitally transformed business models.”
Fourth: if digital innovation is the answer, then 5G technology will be a crucial enabler, reducing latency and accelerating the deployment of remote control and monitoring systems and autonomous devices. Carl Hung, CEO of the Season Group and SG Wireless, has no doubts: “I see a continuing adoption of more Industry 4.0 technologies such as IoT first for data collection and analysis and then subsequently 5G deployments for no-latency control of manufacturing equipment. Season Group’s subsidiary, SG Wireless, is designing products for customers to collect data and remotely manage their business. I also see more reliance on data in the cloud as opposed to locally hosted servers, but that will entail more investments in the security side first and foremost.”
Fifth: the future of supply chains lies in greater localization and flexibility. Mark Wood, CEO of Microart Services, notes that he has seen many customers “exploring the possibility and value of sourcing closer to home, and closer to their customer. I think we’ll see more.” This could reshape the global map of manufacturing. Bruno Racault, CEO of ALL Circuits, believes this gives Europe a great opportunity: “Many of the dynamics of 2020 have led brands to think long and hard about where they make their products and we’re happy that France, and indeed Europe, will likely end up winning more business as a result. I believe this trend combined with a focus on digital transformation, Industry 4.0 and automation, will lead to a renaissance of European manufacturing, particularly in France and Germany, two countries committed to becoming the smartest manufacturing region in the world.”
Bottom line: the odds are stacked in favor of much faster, more focused and efficiency-enhancing innovation across the manufacturing ecosystem. This should be reason for strong optimism, as encapsulated by Juan Arango, Managing Director of Ko Young America: “I see a bright future of innovative people developing innovative products, supported by an equally innovative digitally enabled local manufacturing industry.” This is what the world economy needs to boost living standards across the globe in the coming decade and beyond.