Supply chain disruptions have now become commonplace, and the Manufacturing Leadership Council highlights supply chain improvement in 2022 and beyond as essential to the health of manufacturing. More than ever, manufacturers need resilient and agile supply chains to anticipate and overcome crises. According to the council, creating collaborative supply chain network strategies is key. Quickly sharing key data, insights, and material needs among key partners will foster agility and innovation.
This article originally appeared on 28 February 2022 at Global Trade Magazine.
But we need to update our collaboration strategies because the U.S., and much of the rest of the world, last truly focused on supply chain resilience more than 70 years ago. During World War II, manufacturers saw industry collaboration at unprecedented levels as the Allies needed a dependable supply chain for the war front. Consequently, the American government forced collaboration on a top-down, streamlined supply chain with a singular focus. Every company produced a different part, but their common goals superseded their desire to compete and spurred efficiencies.
We’re no longer facing these stark geopolitical challenges, but we are at a supply chain crossroads. The knowledge and agility needed to meet today’s challenges have reached a similar point where no company, regardless of size, can adjust individually to meet demand. The demands of the modern market necessitate collaboration.
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Companies hesitate to engage in collaboration, and that makes sense: If you can move faster, you have a tremendous advantage. Why bother to share? The answer lies at the intersection of philosophical and practical justifications. From a philosophical side, manufacturers that pride themselves on innovation shouldn’t be afraid of imitation.
This leads to the practical side: If you hold back on sharing innovative ideas, tools, and frameworks, you slow your whole industry. A leading company may gain a short-term advantage, but down the line, it won’t be able to gain anything from others. In the modern world, there’s no such thing as the “smartest person in the room.” It’s a global room. If you aren’t willing to share some of your insights, you could cause long-range setbacks for your business and your industry.
One globally recognized consumer product goods company gave competitors an insider look at how it made recyclable tubes. Being collaborative didn’t lower the company’s credibility. It illustrated the company’s leadership and cemented it as being true to its mission toward developing more sustainable manufacturing practices.
What will it take to make manufacturers feel comfortable establishing a two-way street when it comes to sharing their supply chain data or innovations? The following strategies will help:
Right now, there’s no single language or rulebook that allows manufacturers to communicate confidently among themselves. We just aren’t sure what to share, so we think we must share everything. This makes collaboration feel overwhelming and unrealistic. Having a single language that all manufacturers use to communicate across industries and regions would reduce the latency around collaboration.
For example, we know that sharing asset-level information like makes and models can be useful. But how about the deeper metadata that involves how the item works or the best practices to maintain it? Which metadata is useful enough to send out? And how can it be shared in a commonly understood and recognized format? These are all important questions that can be answered by universal guidelines, which would allow for better machine servicing and create more efficient and sustainable production lines.
Clearer language also helps identify what information should be protected to prevent others from stealing core IP by reverse-engineering processes.
A lot of manufacturers struggle to use digital transformation (DX) principles to improve their supply chains. They’re stuck in the pilot phase, according to McKinsey research. Understanding how others adopted and scaled their DX initiatives could be extraordinarily helpful.
The World Economic Forum’s Global Lighthouse initiative is already facilitating the sharing of DX use cases across industry silos. There are also peer-level customer advisory boards and industry-level groups sharing implementation practices.
Make no mistake: DX is essential to unraveling knots in the supply chain. The right DX applications can improve the entire global manufacturing “organism.” The more manufacturers learn from one another’s mistakes, the faster the industry can evolve. Not participating in these forums or groups means losing out on valuable information.
The Great Resignation is making it harder to source and hire talented people, especially with older workers retiring and taking key institutional knowledge with them. This is a huge challenge: Companies need to onboard new workers, and there’s intense competition for the new generation of technical talent who will drive future innovation. Even current workers may need upskilling and reskilling, too, especially in the latest digital tools to make their roles more effective.
These are significant challenges, and manufacturers need to quickly gather insights, data, and best practices around workforce development. The industry, however, lacks the tooling needed to share data efficiently like in the software industry, which has a tremendous amount of tools, academies, and online capabilities that have enabled people to learn to code and allowed collaborative employment models with apprenticeships. We need this same level of collaboration among upskilling employees.
Allowing the people themselves to collaborate helps. There are forums for VPs or management roles to share insights but few, if any, forums for technicians across different industries to collaborate.
Corporate leaders constantly say, “We need to be more sustainable.” But how many are taking steps toward sustainability? The whole industry needs to become more effective, efficient, and sustainable, and the more collaboration we create there — sharing data and insights on implementing sustainable practices — the faster it’ll be to move forward.
Even if sustainability weren’t the right focus ecologically, it’s right operationally. An organization that’s not sustainable has little supply chain resilience and will need to change tactics as resources run out. If you don’t have real initiatives in place to make the supply chain more sustainable over time, resilience won’t even matter.
Ultimately, we need data-driven standards around improving sustainability. Technology allows us more real-time data than ever, but we need to improve how our initiatives use that manufacturing data. Sharing a digital roadmap of best practices and insights or utilizing cross-company supply chain initiatives makes it quicker and easier to make supply chain improvements.
Plenty has changed since WWII’s collaboration among manufacturers, but the benefits of cooperation haven’t. Let’s respond to today’s supply chain concerns by revisiting the advantages that come from coming together.
Artem is VP Strategy at Augury, where he oversees Augury’s AI-based machine health, performance, and digital transformation solutions. He has over 12 years of experience in technology, product, innovation, and business development, and has co-founded enterprise-companies in Israel, New York and West Africa. Artem holds and BA and MA from IDC Herzliya in Israel.