How Resilient Manufacturing Organizations Can Promote Sustainable Operational Performance

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How Resilient Manufacturing Organizations Can Promote Sustainable Operational Performance

To survive in the long run, manufacturing companies will have to continuously renew their competitive edge and build sufficiently resilient organizations to enable this capability.

Resiliency has become imperative for manufacturing organizations, both in its supply chain and within the production lines.

A key aspect of resilience is that disruptions are more frequent, resulting in resources being less available. This will occur even more so with the manufacturing sector. Manufacturing companies are not only affected by supply chain processes but are also disrupted by the acceleration of innovation, embodied by digital, smart devices,
Internet of Things, among other aspects.

All dimensions of manufacturing companies are impacted: supply chains must recover from more frequent disruptions, and product development; innovation cannot go without intrapreneurship anymore, and manufacturing processes are becoming more and more automated.

ELEMENTARY PERFORMANCE UNITS: THE BUILDING BLOCKS FOR RESILIENCE

Resilient organizations are the ones capable of sustainably thriving in an environment of uncertainty because they are focus on existing priorities while remaining customer-centric under any conditions. This is only possible thanks to an agile organization where each dimension and component are resilient in themselves.

Using Elementary Performance Units is at the heart of resilient organization design. These EPUs are the smallest relevant bricks on which an organization can be redesigned. When all the EPUs of an organization connect to each other, they collectively form the core business of the company and connect to other key company units and their functions.

How This Impacts the Manufacturing Sector

Manufacturing today is much less vertically integrated, with global supply chains and manufacturing practices tending to be based on holding low or zero stocks of components. This may have reduced costs and improved profit margins, but it has also raised the manufacturer’s risk profile significantly.

When it comes to business continuity for the manufacturing sector, it is essential for manufacturers to look beyond the boundaries of their own organization along the supply chain to identify critical suppliers and put contingency plans in place to mitigate their exposure. Having several suppliers able to supply key goods or services is obviously one way of spreading risk, another is to focus on logistics and predetermine alternative supply routes.

Equipment is another key dependency for the manufacturing industry. It’s an inescapable fact that replacing specialist machinery involves long lead times and, typically, is extremely expensive. Practical solutions include taking out fixed maintenance scheduling in order to ensure critical machinery is kept in good working order and holding stocks of vital spares.

The Way Forward

Companies can’t avoid volatility and uncertainty, but they can, and should, take specific actions to build greater resilience into their value chains. By implying beyond a traditional manufacturing process toward a more flexible one with EPUs, helps manufacturing organizations, facilitate better process execution; assist better practices by utilizing intelligent insights born out of the data collected from multiple areas within a factory; and enable flexibility and adaptability in the ever-changing manufacturing and business landscape of today.