Navigate the Wake of Supply Chain Shocks

By Jim Montague, Contributing Editor

Beyond its devastating human toll and health care effects, the COVID-19 pandemic has been no friend to businesses. And even as vaccinations make an impact on infection rates, manufacturers and consumers in many regions and industries continue to suffer from raw materials, intermediate parts and other product shortages, which continue to hinder the recovery of their downstream clients and customers.

"The past [two years] have been challenging in many dimensions for us and our clients both personally and professionally,” says Chad Markle, principal and global director of Kalypso, a Rockwell Automation company and digitalization services provider.

“We continue to face shocks to our own supply chains,” he continues. “These include everything from shipping and transportation bottlenecks to crippling ransomware attacks to raw material and labor shortages, but we put them all under the heading of volatility, uncertainty, complexity and ambiguity (VUCA). It can seem like there's no ready playbook for dealing with this VUCA world, but there's also some reason for hope and optimism."

1. Flexible Production Increases Responses

To resolve some of these snags and shocks, Markle reports that some manufacturing leaders are trying to build greater agility, resilience and sustainability into their supply-chain processes, and develop more rapid access to actionable information, which can allow them to respond more effectively when problems arise.

"We're trying to help in three main areas: changes in customer demand; changes in staffing and labor; and changes in materials," he says.

"For example, changes in demand drive significant troubles for supply-chain leaders. During lockdowns, customers shift where they shop, and how and what they purchase. Volatile demand also occurs in industrial supply chains, with rapidly rising and ebbing demand for petroleum, lumber, steel and semiconductors, just to name a few.

"Our clients who are weathering these changes in demand are using two main strategies: flexible manufacturing for more rapid changeovers, and better supplier integration,” he continues. “Flexible manufacturing is all about the ability to adapt quickly and create a seamless flow from need to delivery. This means suppliers must replace rigid operating models with levels of controls and responses once thought impossible.

“Our leading clients aren't only redesigning their factories so they can switch models and products more quickly, but in the automotive industry, for example, they're going from changeovers of robots and software in four to six weeks to doing it overnight. This makes it a lot easier to handle volatility," he says.

Markle adds that flexible production that can alleviate supply chain snags typically requires suppliers to implement one, global manufacturing operations management (MOM) system and other software than can harmonize their operations by alerting them to assembly line changes, local training needs and other issues.

"MOM lets them effectively manage disruptions. Manufacturers facing VUCA and responding with flexible manufacturing can also gain value by integrating their suppliers, such as working more closely with their engineering experts and contractors to get preassembled modules, instead of just a box of parts," he explains.

"For example, one of our clients is a toy company with factories in Asia that collaborated on new designs by sharing their actual CAD models and geometries in near-real-time among their designers, engineers, suppliers and marketers; partnering with their management teams; and setting up a collaborative, internal digital platform. This enabled them to reduce their data management and transaction times by up to 30%, speed up designs and turnarounds, and reduce costs."

2. Smarter Staffing 

Of course, another major impact of COVID-19 has been layoffs and unemployment as businesses closed or curtailed operations, compounded by persistent staffing shortages upon reopening due to the many dislocated workers who found other jobs or retired early.

Even when they could fill positions, many employers are now facing much higher ratios of less-skilled employees, more staff in new and unfamiliar roles, and costly shift-scheduling difficulties.

"The VUCA world needs more workforce enablement and labor-supporting technology,” Markle explains. “One client we work with is using advanced analytics and a 'Moneyball' strategy on their shop floor, which is similar to the book and movie about the Oakland Athletics baseball team, which used data analytics to build a successful team from undervalued players."

He continues, "They track staff availability and skillsets, feeding analytical models to determine who's best able to run particular equipment at any point in time. This streamlines tasks and scheduling, and is improving productivity, scrap and worker satisfaction.

"Some companies are also supplementing their staffs with robots and automatic guided vehicles (AGVs),” he notes. “One of our clients, Symbotic, is showing how its autonomous robots can perform untethered travel among storage racks in clients' distribution centers."

3. Analytics Assist Materials

Markle adds that VUCA problems related to deviations in raw materials also can be tamed by data analytics applied in the form of product lifecycle management (PLM) software, model predictive control (MPC), artificial intelligence (AI), and even "chaos engineering" functions that can simulate problems in production systems to make sure they're running properly.

"For example, Netflix runs Chaos Monkey software through its systems and adds simulated problems to proactively identify process volatility," he explains. "It even uses real-world production data for its simulations, so it can deal with the issues Chaos Monkey finds on its own terms, and further improve its ecosystem by enabling it to respond better."

Similarly, PLM is a sophisticated software platform that uses digital production definitions, worker management functions and advanced visualization.

"These capabilities let users manage their production and equipment life cycles with a digital thread they can use to make control changes,” he explains. “Likewise, PLM serves as an orchestration backbone, but it can also track materials, parts and bills of material. These capabilities are important because we're also seeing a shortfall in semiconductor chips, for example, which is forcing some automotive manufacturers to leave blindspot-monitors out of their cars.

“More resilient supply chains can reduce these problems by making users more agile,” he adds.

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