
Artificial Intelligence, Industrial Internet of Things, Digital Twins, Industry 4.0, Additive Manufacturing… For a small or medium scale manufacturer, these seem like a bewildering array of technologies, so how do you pick out the useful ones from the hype?
Meanwhile, the small business owner or CEO is trying to ensure that their business is more resilient to withstand a possible repeat of the pandemic which caused enormous disruption to their operations and supply chains.
And a third area of concern is the growing pressure to reduce their environmental impact and incorporate social and ethical policies.
Glenn Mills is a specialist in manufacturing and service operations with particular experience in delivering performance improvement, change programme management and preparation for transactions. Here he looks at three areas of current challenge for SME manufacturers.
Most large businesses have teams working on a range of intelligent technologies, often referred to as Industry 4.0. The benefits for smaller manufacturers are not so obvious, but Artificial Intelligence (AI) is now widely and inexpensively available and the text-based versions are finding applications in business support functions, such as report generation, document creation and handling, and data processing.
AI is also particularly effective in pattern recognition and is being used for detection of product defects where it can process vastly greater volumes of images or data, is more systematic, and doesn’t tire as human inspectors are prone to do.
Additive manufacturing, such as 3D printing, has been around for many years, but the range of materials and processes continues to improve, and it is being used increasingly not only for rapid prototyping and tooling but for low- and medium-volume products.
A review of production and support processes, perhaps using a methodology such as value stream mapping, will identify areas where efficiencies can be achieved. It also provides an opportunity to interrogate the value of some processes, which might be eliminated altogether.
Many manufacturers made a start on redesigning their supply chains as soon as the acute supply problems from the pandemic subsided. This included on-shoring or near-shoring, inventory buffering, dual-sourcing and long-term supply agreements with a risk-sharing element.
According to a recent Make UK/BDO quarterly survey, 83% of manufacturers now regularly assess supply chain risk, although only 65% believe their supply chain is resilient to disruption. This suggests that there is still work to do and it is often harder for smaller manufacturers who don’t have the same purchasing power as the larger ones.
However, the supply chain is only one part of the resilience picture. The way to ensure that all causes and effects of disruption are considered is to develop a business continuity plan. This doesn’t have to be a long process, but by assessing the effects of a range of risks, it will soon become apparent which are the priorities for mitigation measures. The risks are not only global, like a pandemic, but more mundane company-specific ones such as fire, flood, cyber security etc.
Finally, sustainability has tended to be a lower priority for smaller manufacturers who were wrestling with what seemed like more urgent issues, such as efficiency, costs and recruitment. The exceptions were those producing consumer products or services where the ethical basis was effectively part of the offering. However, the environmental impact and social and ethical values espoused by the business can no longer be ignored, even when supplying to other businesses.
Many companies are now requiring their suppliers to comply with a set of standards including sustainability. Statutory regulations are gradually increasing demands even on small businesses. And more employees are now looking to work for sustainable businesses, an important factor at a time when manufacturers continue to report problems with recruitment and retention, especially for skilled workers.
It can be difficult to put a financial figure on the benefits of sustainability, although reducing energy costs as part of a reduction in carbon footprint is an obvious one. The business owner has to take a broader view, recognising that sustainability is now a must-have in the modern market and it therefore increases the value of the business.
The small or medium scale manufacturer has plenty of challenges, but that has always been the case. Perhaps what is different now is the pace of change of the technologies becoming available.
If you would like to unravel the useful stuff from the hype, get in touch and we would be pleased to arrange for an experienced adviser to discuss your business challenges.
Glenn is a highly experienced executive able to advise businesses on:
Call 01273 945 984 or email Glenn.Mills@emcltd.co.uk
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