- Customer proximity:
Manufacturers need to reconnect with customers. The pandemic forced manufacturers to develop some remote capabilities that make sense to continue, but you also need to re-establish relationships and reduce the risk of further disruption to your inputs and outputs in the short term. “As the pandemic lifts, we’ve got to get back in the mindset of looking your customer in the eye,” Hersh said. “You have to be ready to address issues in real time rather than letting them wait for someone to get back to them.”
Manufacturers also need to look at how they can move inventory closer to key customers. Just-in-time delivery, from production to the customer, can reduce the cost of inventory but we’ve seen that it also escalates your distribution risks, customer retention risks and ultimately your stress level.
In the short term, you still need to put out the fires that arise every day. Some of those fires have changed, and now there are more issues to watch with more ways to address them. “It’s still about the cost and availability of raw material, energy costs — all the input costs,” Hersh said. “Those fundamentals don’t go away, but as a manufacturer you also need to keep tabs on what’s driving everything through your end-customer demand.”
While manufacturers make some short-term moves to relieve immediate stresses, they should also continue some important long-term measures.
These moves might not be at the top of current budget priorities, but they should be factored into your strategic planning and decision making:
1. Green energy:
Green energy can give you more self-reliance and more resilience to external market risks. However, that self-reliance takes time and investment to develop. There’s no “green energy” switch next to your old light switch, so now is the time to look at what partners or investments you will need in order to meet future regulations, or adapt if your current energy options go away. “The move to green energy is a great thing — however, we’re shutting down some old utility plants without having the equivalent capacity from green energy production yet,” Hersh said.
2. Emerging production technologies:
New technologies like 3D printing can fundamentally re-frame supply chain issues by putting your production closer to your customers and improving responsiveness to customer needs. Emerging production technologies can even create an advantage for mid-market manufacturers, since they can sharply reduce the time to market for new products and bypass some of the traditional constraints on starting up new production and distribution
3. Emerging back-office technologies:
Back-office technologies can help you analyze and adapt to market changes and customer needs before your competitors get to market or force up prices on the inputs you need. Like the move to green energy, the move to these emerging back-office technologies is a question of “when” rather than “if,” but it will also take time. So, it’s important to consider the right moves in your planning now, even if they are not a top budget priority.