Some of the current challenges in manufacturing are related to the ongoing supply chain disruption exacerbated by the war between Russia and Ukraine and the resurgence of COVID-19 in China. These continue to cause supply shortages and lack of skills in pursuing digital transformation. And most importantly, the lack of IT skills to develop smart, connected products to enable new business models, ensure cybersecurity, and incorporate sustainability goals into operations.
Cyber Security: Raising awareness at the board level
The war between Russia and Ukraine has raised awareness of cybersecurity solutions, even at the board level. IT is more sought after by cyber security specialists looking at ways to thwart potential cyber attacks.
Awareness is rising in areas where production plants and infrastructure are considered important, such as the supply of water and chemicals. Operational security is the key to supporting new digital business areas where IP (algorithms, etc.) needs to be protected. New technologies such as non-fungible tokens (NFTs) need to be scrutinized to protect their IP.
Lack of Skills: The Challenge of Globally Assigning Appropriate Skills
In the manufacturing industry, there are two reasons for lack of skills.
On the one hand, products are becoming more and more intelligent and connected. The higher the share of connected products and the more IoT and cloud used, the higher the requirements for related IT features.
Large manufacturers and car OEMs usually have the skills or can attract the skills they need. However, it is more difficult for SMEs to attract the right skills. If not dealt with properly, this can be a serious problem for them.
In tightly connected supply chains such as the automotive industry, lack of skills can be a significant issue for small Tier 2 or Tier 3 suppliers and their customers (Tier 1 suppliers or automotive OEMs). ..
Many local or regional initiatives, such as the German Government’s Plattform Industrie 4.0 Initiative, aim to help SMBs attract the right skills.
On the other hand, for example, digital transformation of operations in the manufacturing floor, warehouse, supply chain, or product development and engineering also requires appropriate IT skills. When it comes to these skills, where people live is no longer important. Working from home gave me the opportunity to reach a talented place.
This is supported by the increasing adoption of collaboration tools during pandemics, allowing organizations to remotely onboard their skills. However, this may not be the best option for all organizations such as SMB, and there are still job profiles that require a physical transfer to Europe. This continues to be a major challenge.
Supply chain challenges: from turmoil to production outages
During the pandemic, key components such as microchips are still lacking after two years of continuous disruption in the supply chain. The war between Russia and Ukraine has also had a serious impact on the supply chain, with key components sourced from both countries.
Ukraine, for example, is a major supplier of neon gas used in the manufacture of wiring harnesses and microchips for the automotive industry. The lack of harnesses has forced many automotive OEMs to temporarily close their production bases.
Russia, on the other hand, is a major supplier of nails used in “euro” pallets. Sanctions against Russia prohibit the shipment of these nails. That is, there are no pallets or deliveries.
COVID-19 is still on the market. China is fighting a new outbreak with a new blockade. At the beginning of April 2022, more than 140 vessels were waiting for unloading outside the world’s busiest port, Shanghai Port. This has a serious impact on the availability of key components.
Many manufacturers are taking steps to avoid production stagnation, such as increased inventory levels and safety stock. Determining the optimal cost-benefit ratio for higher inventory levels requires careful evaluation enabled by a comprehensive analysis of warehouse data by production planning and execution systems.
A supplier close to the factory (with the inherent risks associated with long transportation routes rather than ordering supply from low-cost countries) as production sites are considering temporary shutdowns due to soaring energy prices. Measures to involve them have also failed.
Sustainability: From pure necessities to core values
In addition to the need to incorporate sustainability goals into their businesses, manufacturers are taking an increasing step towards making sustainability and sustainable growth part of their core values and goals. Some even see it as the main focus of the foreseeable future.
Many manufacturers focus on complete circulation. This means reducing waste in the product recycling process by reusing recycled components and using alternative renewable carbon.
Sustainability is putting pressure on the automotive industry in particular. The challenge here is that the requirements of an automotive supplier from an OEM customer are very different in that the supplier has to deal with different requirements than the OEM customer. For some components, automotive OEMs limit the use of recycled materials for quality reasons. Therefore, the supplier will tell the OEM customer that they are using less than 20% recycled material and that another OEM customer can supply more than 20% recycled material to their parts. For each customer, the supplier must prove its share of recycled materials.
To do this, you need a specific application. For example, ERP providers need to ensure that they have sustainable applications.
Sustainability in some manufacturing industries is primarily about reporting, but it is also about replacing key components of the production process with components that are more environmentally friendly to other industries. This impacts supply chain operations such as procurement and procurement, and potentially impacts the production process if new alternative raw materials or supplies require changes in production parameters.
We discussed with the advisory board many other topics. We will discuss these with you as we approach the summit. These topics include developing and enhancing digital sales channels, investing in data management and data analysis, and implementing hybrid work concepts and collaboration tools.
Automation, IT-OT integration, digital twins, and secure edge-to-cloud solutions are also important technologies for manufacturing organizations. Manufacturers will also need to digitally transform their operations and business models with 5G, 3D printing, augmented reality (AR), automatic guided vehicles (AGVs), and NFTs on their radars. Another issue is how to manage Shadow IT and support civil IT, and how IT optimally supports business units, including OT.
IDC European Manufacturing Summit It’s a great opportunity for manufacturing executives to discuss important issues, share lessons learned, and network with colleagues. It also provides an opportunity for manufacturing organizations and technology providers to discuss how they can thrive in an increasingly digital, sustainable and uncertain, volatile and complex economy.
IT executives and senior decision makers Register here For the summit.
https://blog-idceurope.com/key-topics-from-the-idc-manufacturing-summits-advisory-board-kick-off-2022/?utm_source=rss&utm_medium=rss&utm_campaign=key-topics-from-the-idc-manufacturing-summits-advisory-board-kick-off-2022 Key topics from the IDC Manufacturing Summit Advisory Board kickoff 2022