Canadian Manufacturing

Manufacturing the new normal: The value of data integration and resiliency amid global disruption

Establishing supply chain resilience entails adopting more robust digital tools and a fundamental change in approach to business practices

May 20, 2020  by Mark Morley, Director, Strategic Product Marketing, OpenText

The following is a guest column contributed by Mark Morley of business software firm OpenText

Mark Morley. PHOTO: OpenText

Manufacturers operate complex production processes which are highly dependent on the timely supply of parts from external suppliers. The current global pandemic has put a bright spotlight on the challenges manufacturing companies face, as unstable global markets and shifting supplier relationships continue to disrupt operations. While the manufacturing sector has been impacted by numerous natural disasters in the past, the global spread of the COVID-19 has resulted in a near complete halt of supply chain movement and production. According to a recent report from the Institute of Supply Management, 75% of companies are reporting supply chain disruption. Disruption can set in motion a chain reaction of issues from shipment delays to limited visibility into delivery status and inventory levels. To combat this, manufacturers will increasingly be looking for ways to alleviate operational interruption and improve supply chain resilience.

Establishing supply chain resilience entails adopting more robust digital tools and a fundamental change in approach to business practices. This new approach involves being prepared for unexpected risks, responding to potential issues and growing market share, while maintaining strong customer loyalty and financial performance. There are four key areas manufactures can focus on to achieve resilience within their supply chain: Flexibility, collaboration, visibility and insights.

Flexibility

Organizations with the strongest core fundamentals are best positioned to weather unforeseen events. Cloud-based deployment and storage has become essential to managing costs, resources and risk without sacrificing a competitive advantage, product innovation or customer satisfaction. Enabling supply chain flexibility allows for business continuity, by keeping vital channels of information open and accessible anywhere around the world. When a manufacturer shifts from on-premise storage of their data to the cloud, they also ensure that all business information is stored and remains globally accessible. For instance, a major earthquake in Japan in 2011 led to an uptick in interest from OpenText customers in the country to move from behind the firewall software hosted in its Tokyo data centers to a B2B Managed Services platform that could host and make its information available, via the cloud from any location.

PHOTO: Open Text

Collaboration

The key to maintaining business continuity for manufacturers also lies within the collaborative relationships between external partners. A cloud-based platform can improve the contact management relationship between trading partners once a global disruptive event occurs. Partners can continue to monitor and supervise the execution of dual sourcing strategies and quickly establish the post-disruption condition of a supply chain, providing a significant competitive advantage. Centralized management of all trading partner contact information also provides an opportunity to conduct post-disruption assessment of a manufacturer’s supply chain, which leads to better risk assessment and prevention steps for future disruptions.

Visibility

Global supply chains are comparable to finely tuned machines. When an unexpected incident occurs, the machine’s ability to retain its output may be impacted and can in turn, severely impact the broader end-to-end business ecosystem. Manufacturers seeking to adapt their operations and continuously provide the products and services to their customers can pivot towards technologies that provide visibility, giving manufacturers an opportunity to make rapid decision-making responses. These companies can integrate a secure expanded visibility into their multi-enterprise operations using integrated third-party data sources. By doing this, manufacturers will be able to self-monitor the functionality of critical components that may be affected by unforeseen on-going supply chain and operational disruptions.

Insights

Analytics, artificial intelligence and machine learning technologies can help provide valuable business insights during a period of disruption. Executive dashboards can be developed to monitor the condition of the business and the associated supply chain, providing an avenue for corrective action to be taken. The capture and analysis of a manufacturers’ data can also derive important insight and lead to greater insight and efficiency. This insight can improve operations, drive innovation and seize new business opportunities. This process will mean a greater focus on data preparation and integration to bring together and enrich information from a wide range of sources to quickly identify trends and guide recommendations for decision-making. For instance, the adoption of a cloud-based predictive analytics platform allows for the transmission of real time alerts and notifications when supply chain issues arise – such as a late delivery or a missed order, allowing for human intervention to correct errors. It also allows for ‘what if’ scenarios to be played out to understand the impacts. For example, introducing a new set of second source suppliers across a supply chain. By doing so, this enables manufacturers to remain on top of potential issues and maintain their workflows, which is vital for the health and viability of their operations within the larger supply chain system.

PHOTO: OpenText

The use of data patterns and insights gives fuel to another area where manufacturers can capitalize on: the growing personalized consumer economy. Today’s consumers are increasingly looking for customized products and services to meet their individual needs. Many manufacturers will need to alter their practices to meet this growing demand. Predictive data analytics can expose trends and manufacturer products more quickly, so customers remain loyal and avoid purchasing from other competitors. For example, the value of predictive analytics shines through when manufacturers are able to identify a pattern of buying or a larger trend within the market, such as a likely delay or default in payment. This information can be stored for a long period of time, so manufacturers know when to intervene based on past performance indicators.

The magnitude of the current global pandemic is forcing many companies to adopt new ways to work that maximize productivity through information management and digital technologies. Manufacturers looking to propel themselves into the next phase of business need to consider building resiliency into their business model to better support customers, maintain business operations and collaborate on shared information.

Manufacturers will find that digital transformation changes the way they interact with customers, suppliers, assets and partners. The use of a cloud-based platform can help pivot supply chains to support shortages and ensure stability. The value of using a cloud-based platform can drastically improve a manufacturer’s ability to be flexible and collaborative with its trading partners, maintain visibility into its operations and capitalize on key data insights within its operations. Manufacturing companies that seize the opportunity of the cloud through its agile and flexible architectures can achieve a stronger market footing against competitors and continue to deliver, operate and excel amid a global disruption.

Mark Morley leads the product marketing efforts for B2B Managed Services at OpenText, drives industry and regional alignment with overall Business Network product strategy and looks at how new disruptive technologies will impact future supply chains. Mark also has over 28 years industry experience across the discrete manufacturing sector.

Waterloo, Ont.-based business software firm OpenText enables organizations to gain insight through information management solutions, on-premises or in the cloud. For more information about OpenText visit opentext.com