May 5, 2021

Technology may be the key to manufacturing success in 2021

Jonathan Wright
4 min
Smart Manufacturing | Technology | Factory of the Future | COVID-19
Jonathan Wright, Industry Director for Manufacturing, Six Degrees, on how technology may be the key to manufacturing sucess in 2021...

The manufacturing sector took some hard hits last year. COVID-19 impacted supply chains, compromised workforce safety, and changed both channels to market and consumer behaviour. Meanwhile, Brexit added an extra layer of operational complexity, and cybercriminals targeted the sector with increased vigour – NTT’s 2020 Global Threat Intelligence Report (GTIR) shows that manufacturing has become the most attacked sector in the UK and Ireland.

In this article, we’ll take a look at the manufacturing trends we saw in 2020 and provide insights into how manufacturers can use technology to overcome the challenges they may face in 2021. 

Challenge One: Brexit

If 2020 was the year of COVID-19, 2021 is set to be the year of Brexit. The rapid exchange of intermediate goods such as car parts with numerous EU countries, along with the ability to order these goods ‘just-in-time’ to avoid stockpiling costs, are things that – until now – UK manufacturers have taken for granted. However, now that the Brexit transition period has ended these critical links may be disrupted.

How Technology Can Help

In order to overcome the challenges that Brexit is likely to present, manufacturers will need to improve managing and acting on their data. By leveraging data effectively, introducing more predictive analysis and evaluating their supply chain risks, manufacturers can get ahead of the curve to both reduce time lost on import paperwork and the movement of goods, and reduce waste and variability in their production processes. 

Challenge Two: COVID-19

It’s fair to say that COVID-19 will continue to affect UK manufacturers for some time to come. In an industry where safety is paramount, manufacturers have been forced to take unprecedented action to stop the frontline workers that are so integral to their day-to-day operations from contracting and passing on the virus. Manufacturers have leant heavily on the Government’s Job Retention Scheme, but even with this support in place many have had to make redundancies.

How Technology Can Help

UK manufacturers will need to make decisions based on data around how to emerge best from COVID-19-enforced lockdown. Understanding the problem is one thing, but understanding how to tackle it – and having the evidence to back yourself – is quite another, and this is where modern data platforms really come into their own. 

Artificial intelligence and machine learning allow manufacturers to scrutinise historical process data. This enables them to identify patterns and relationships among discrete process steps and inputs, and make changes proactively that have a positive effect on yield whilst responding to external market trends that may accelerate or decelerate demand rapidly over the coming year.

Challenge Three: Cyber Security

Manufacturers operate in a hostile digital landscape, where resourceful and highly-motivated attackers seek to steal money and valuable intellectual property from their victims. The 2021 cyber security picture for manufacturers is likely to be one of evolution, not revolution, as cybercriminals adapt their most popular methods – phishing, ransomware, and supply chain compromise – to maximise the efficiency of the attacks they launch.

How Technology Can Help

Technology can help manufacturers mitigate the cyber risks they will face in 2021, but it does not provide a comprehensive solution in and of itself. Effective cyber security requires a combination of people, processes and systems. In order to enhance their cyber security, manufacturers will need to go on a cyber journey that runs from business strategy through to management, monitoring and continual optimisation.

Challenge Four: Direct to Consumer

Consumers’ increasing adoption of online retail is causing brick and mortar stores throughout the UK to close down, and this is having a direct impact on the manufacturing sector.

Manufacturers used to having strong brick and mortar retail partner relationships are seeing less routes to market as many of these retailers scale down their operations. In 2021, many of these manufacturers will move to direct-to-consumer (D2C) models to adapt.

For manufacturing firms considering moving into D2C, this means developing a more sophisticated ecommerce model that accepts card payments. This ecommerce model will need to be complemented by adapted warehouse and delivery services delivered by increased warehouse staff and backed up by a consumer-facing contact centre.

How Technology Can Help

The foundation for great consumer experiences in the D2C world is the efficient collection, analysis and use of data. To emulate a retailer, simply collecting this data is not enough – manufacturers must work across a number of systems, all of which gather data at different points throughout the buyer’s journey that must be integrated to provide true consumer insight. 

I believe that the intelligent application of secure cloud-led technology will enable manufacturing businesses to thrive even amidst challenging operating conditions, putting them in the best place to respond with agility to Brexit, the ongoing COVID-19 pandemic, the increasingly hostile digital landscape, and the growing trend towards D2C.

Jonathan Wright, Industry Director for Manufacturing, Six Degrees

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Jun 8, 2021

IMF: Variants Can Still Hurt Manufacturing Recovery

Elise Leise
3 min
The International Monetary Fund (IMF) claims that while markets are rising and manufacturing is coming back, it’ll push for global immunisation

After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022

Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery. 

Lingering Concerns Over COVID

Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high. 

Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery? 

IMF: Current Boom Could Falter

Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”. 

Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”. 

Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.

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