Why industrial manufacturing organisations must stay agile in the face of unprecedented change

Manufacturers are facing a “value void” when it comes to agility, where digital transformation initiatives are not sufficiently improving responsiveness or are not specific enough to meet industry needs.

In today’s highly disruptive landscape, this gap is problematic—and only getting worse. This McKinsey article states that executives expect the impact of disruption—such as technology breakthroughs or supply chain vulnerabilities—to increase by 15% to 25% over the next five years, suggesting manufacturers should look to find solutions sooner rather than later.

Disruption is driven by many factors, including but not limited to geopolitical tensions and global economic instabilities, unpredictable and unreliable logistics, continuously changing industry regulations, and antiquated legacy systems that are too slow and expensive to adapt.

The impact of disruption is widespread, triggering an increase in costs and lead times across the supply chain—which will affect customer satisfaction—and the inability for organisations to stay responsive in the face of these changes.

Despite this, there is light on the horizon. Although the stakes are increasingly higher for industrial manufacturing organisations, the possibilities for growth—and as an extension, increased customer loyalty, competitive advantage, and profitability—are plentiful, leaving organisations in a strong position to make possible happen.

Tackling disruption head-on

Turbulent worldwide events—such as Brexit, the Covid-19 pandemic, impending tariffs, and global conflicts—have already had a significant impact on supply chains in recent years, with manufacturers increasingly looking for ways to avoid a repeat scenario in the face of future disruption.

Yet certain issues are complex to overcome. Poor visibility and collaboration across the supply chain mean many organisations are exposed, unable to accurately predict when or where bottlenecks will arise. Furthermore, it restricts manufacturers’ ability to respond appropriately when unpredictable situations do inevitably crop up—such as sudden trade tariffs.

Even if manufacturers can increase supply chain visibility, higher data volumes and growing customer expectations come with heightened complexity—making it difficult to surface actionable insights to help manage disruption. Increasingly sophisticated cybersecurity threats are looming, adding pressure to enforce stringent security measures. A lack of trustworthy information means static supply chains are unable to interpret or plan for the longer term and adopt new strategies, potentially leading to diminishing performance.

To make matters more difficult, manufacturers around the world are increasingly struggling to attract and retain the right talent, meaning fewer resources are available for implementing new approaches or strategies.

In the face of challenging circumstances, manufacturers must think outside the box to get ahead.

Implementing an agility advantage

In our latest global research report, we found that 82% of industrial manufacturing organisations agree that success will depend on the adoption and use of new technologies. As closing the value void becomes a priority for manufacturers, it’s clear that how that technology is applied will have a critical impact.

The truth is, the right tools can neutralise and offset supply chain uncertainty. By combining those tools, manufacturers can arm themselves for success and secure their position as industry frontrunners.

• A cloud-based enterprise resource planning (ERP) system increases visibility through real-time insights into inventory, supplier status, and logistics, breaking down silos and providing a universal view. For organisations that require multi-site support, uniting all production facilities and workspaces across geographies under one system provides myriad benefits—from the ability to track incoming or outgoing parts to complete financial cohesion and oversight that supports intercompany trade.
• Generative artificial intelligence (GenAI) predictive intelligence can help manufacturers anticipate shortages and adjust procurement. What’s more, it can be used to undertake an interactive conversation around project status, unearthing anything that could be considered a risk—something that would otherwise take a significant amount of time to complete across large, siloed organisations.
• Product lifecycle management (PLM) can help shorten product development time by providing an accessible digital thread, increasing the pace of product innovation and enabling industrial manufacturing organisations to react quicker to market demands. By expediting successful products to the market faster, industrial manufacturing organisations can differentiate from their competitors, improving customer satisfaction and increasing market share.
• Digital automation can help industrial manufacturing organisations minimise unplanned downtime, extend equipment life, and optimise maintenance schedules—leading to increased agility and therefore exceptional value creation. With advanced automation such as robotic process automation (RPA), machine learning (ML) and AI, manufacturers can automate non-value-added repetitive tasks to increase worker productivity. Additionally, by reducing errors and accelerating the time taken to complete tasks, more time can be allocated for high-level innovation.
• Process mining is another tool that uncovers patterns and inefficiencies within processes to drive improvement. It allows benchmarking across order types, factories, or geographies and makes it easier to standardise group best practises. The more bulletproof your processes, the better equipped you are to handle disruption.

Making possible happen

Those industrial manufacturing organisations that have the foresight to make the right technology investments will not only increase their ability to cope with disruption, but will enhance business productivity, drive continuous innovation, and uncover unique value for differentiation.

To explore this idea further, we’ve undertaken global research with 500 industrial manufacturing decision-makers. The results revealed four Vectors to Value, providing a blueprint for how the most productive industrial manufacturing organisations globally are using the technology advantage to unlock new value streams.

To understand how your organisation can secure its place as an industry leader, download our report today.

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