The COVID-19 Pandemic is perhaps the biggest reality check for every single business entity in the world. Widespread and universal disruptions, coupled with unpredictable demand and personnel availability tested the mettle of business strategists and leaders around the globe. Now as we slowly approach a post-pandemic world, business as usual will be far from what it used to be pre-pandemic. A recent McKinsey report sheds some light on what business changes happened during the pandemic and how companies will respond as they move to a post-pandemic world.
McKinsey highlights that almost 42% of executives surveyed believed that the pandemic weakened their competitive stance; only 28% believed their position was strengthened. The competitive position of a given organization may directly be linked with its resilience, which can be best understood as the ability of an organization to resist disruptions and changes in its business and operations. This strategic resilience, which allowed some organizations to thrive even when the pandemic was in full swing, could be achieved as per McKinsey, by innovation in the business model. This translates as the ability of an organization to rapidly transform in order to counter the erratically changing market scenarios and create innovation across the value chain, which may last for many years even after the pandemic is gone.
Resilience thereby becomes highly desirable for organizations, irrespective of their business activity. For manufacturers, this resilience may be a direct derivative of their digitalization efforts across the board, both in their own operations and towards their suppliers or customers. The pandemic ironically has acted as an accelerant towards adoption of digital initiatives and has led to a drastic increase in automation and digitization endeavors for manufacturers around the world.
MES as the foundation for digital transformation
At the heart of any digital transformation effort, for any manufacturer in any industry segment, is the MES. An MES forms the foundation of the whole digitization effort and thereby is the key to achieve much-desired resilience in the business.
Today, we will explore why your operation needs a MES from a digitalization and post-pandemic perspective, and how it directly contributes to building a value chain-wide reliance. This perspective is reinforced by a Deloitte publication, ‘The Smart Factory,’ where they surmise that the ‘smart factory’ is one of a fully connected and flexible system, using a constant stream of data from connected operations and production systems (like an MES) to learn and adapt to new demands.
According to Deloitte, for any enterprise to thrive, it needs to encompass the following five features (which are enabled by a Modern MES):
- Connectivity. An organization which is well connected across the supply chain network with its own operation at the center can react quickly to changes happening in its environment. A modern MES application, by its nature and design, is able to connect/integrate with applications across the enterprise, while also connecting with lower level applications (automation and control) across the plant’s shop floor. This connectivity allows for inputs from anywhere, both inside and outside the company, to travel quickly to relevant stakeholders, which in turn improves their ability to make well-informed decisions. The MES importantly adds context to the data it relays and suggests possible course of action. Depending on the type and source of data it is able to access and subsequently process, these insights have been shown to help decision makers in saving millions of dollars, which may otherwise have been lost due to lack of real-time views of operations KPIs and lack of the predictive nature of modern MES’s on the performance, optimization and potential bottlenecks on the shop floor. The MES allows for processing of traditional data-sets with added insight both from the ‘edge’ of the operation and the extended supply chain. It facilitates collaboration between players in the value chain through integrated applications. All of this data movement happens in or near real-time, increasing the speed of decision making and thereby actions, which is a must to build resilience.
- Optimization. Optimization touches assets (machines, equipment) as well as people and processes. A modern MES is the perfect vehicle for widespread optimization. Its ability to integrate with plant equipment allows it to manage the movement and logistics of AGVs and material handling equipment for better allocation of resources and more efficient inventory management. The application also allows for process- wide monitoring of quality, reducing costs related to quality and time needed for rework. AI unleashed through the MES allows for maintenance activities to become predictive, ensuring maximum uptime and increased production efficiency. The MES makes a manufacturing plant’s operations well-orchestrated, and predictable in terms of capacities and throughput, resulting in optimized asset utilization. A plant which is automated and whose output is predictable is more resilient in every way as compared to a plant which is subject to uncertainty due to excessive dependence on manual processes for its core manufacturing activity.
- Transparency. In order to achieve resilience, knowledge of what is happening in the manufacturing plants and across the supply chain becomes essential for business leaders. The MES through its ability to capture and report real-time process metrics along with SPC insights provides a minute-to-minute picture of the shop floor—material consumption, order status, worker and equipment productivity. Customers have visibility of their orders and suppliers are aware of the material they need to ship for ensuring continuity of production. This transparency builds trust—in the customer, in the supplier, within operations. Understanding the behavior of the plant and making that insight available to the extended supply chain builds a foundation of cooperation and avoids issues such as material shortage, quality or yield declines, or missing a customer order due to lack of product. Transparency adds to resilience as what is known can be dealt with, and the MES provides that transparency, not just within the organization but throughout the value chain.
- Proactive and Preemptive Action. Modern MES applications now deploy a myriad of new technologies within the core manufacturing process, be it AR/VR, edge/IoT-based data collection or AI based ML, with data being picked up from thousands of IoT sensors, all leading to a constant enrichment of the company’s knowledge base and the ability to take knowledge-based decisions and action. The MES is able to identify plant behavior trends and predict machine failures, which allows for maintenance and improvement actions to become predictive. Through Augmented Reality, operators and supervisors are able to detect issues related to equipment and production on the fly and can take containment actions before any event turns into a major breakdown or quality event. The benefits of this preemptive approach transcend the core operations, as they cascade to a supplier and customer perspective; shortages or missed shipments from unexpected downtime, material nonperformance or mistakes in order execution can be circumvented before causing a dramatic supply chain ripple. Even safety checks/training and compliance recording are performed proactively and in an automated fashion by the MES. The MES allows the plant to react swiftly to unexpected changes; this proactive behavior contributes to the plant’s resilience.
- Agility. The MES perhaps impacts an operation’s agility the most. The right MES application can allow for instantaneous changeovers and flexible scheduling, which may respond to changes encountered in real-time by the sales team or based on demand pattern changes in the market. Product specification-related changes may iteratively be made, within the compliance norms of their industry, meaning that changes are documented, archived and retrievable. Personnel may need to change layouts where necessary and re-configure workflows through the MES, to accommodate a particular order or change in the manufacturer’s supply chain. Leveraging technology advances from Industry 4.0, the MES allows for the creation of digital twins: a replicate of the actual manufacturing facility, or a specific production line or cell, which enables any proposed changes to be fully tested prior to execution. An agile operation is definitely a more resilient operation.
In summary, the MES is both the harbinger and the core of digitalization, and it is digitalization which leads to innovation and positive changes in Industry 4.0. Unless an organization is well on its journey towards Industry 4.0 it will lack the resilience which is the new norm for survival and progress in this soon-to-be post-pandemic world. Choosing the right MES can gain you the resilience you need to not only survive, but thrive.