Manufacturing opportunity from crisis

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The manufacturing sector has been one of ASEAN’s key economic growth drivers, with the ASEAN post citing pre-pandemic estimates of a 6.6 percent compound annual growth rate (CAGR) between 2016 to 2020.

Digitalization and automation have allowed businesses in this crucial sector to mirror their manufacturing value stream with a virtual one, reducing time and cost in experiencing and creating new concepts and ideas. More recently, COVID-19 disruptions to the global economy, such as shortages of raw materials and parts, have made manufacturers realise the cost of deferring the adoption of digital transformation and smart manufacturing.

SMEhorizon speaks with Samson Khaou, Executive Vice President, Asia Pacific, and Managing Director, Asia Pacific South, Dassault Systèmes, and Christine Bridges-Taylor, Executive Director, B&R Enclosures and Chairman, QMI Solutions Ltd on digitalisation efforts in the manufacturing sector, challenges faced during COVID-19, as well as how SMEs in manufacturing and more generally can leverage digitalisation to weather the pandemic and emerge stronger.

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Recent challenges to manufacturing

Khaou shares that in recent years, many companies have sought to realign their global supply chains in response to shifting manufacturing cost structures. “This includes looking towards regional manufacturing and sourcing footprints to be closer to end markets,” he adds.

“The COVID-19 crisis definitely accelerated a change of global value delivery models, with far-reaching consequences for manufacturers and supply chains.

“At the height of the pandemic, many businesses were severely impacted due to movement restrictions imposed by governments worldwide, resulting in major disruptions and bottlenecks in the supply chain. Additionally, major industrial companies struggled to reorganise their factory operations with remote work and in compliance with safe distancing measures.

“The COVID-19 crisis has certainly brought to fore the importance of operational resilience for manufacturers. As the sector now seeks to mitigate risks of disruption, one critical consideration is in securing better access to supplies and markets. This includes diversifying options for backup production and distribution capacity, as well as optimizing inventory.

COVID-19 and SMEs down under

The experience of B&R Enclosures, an Australian SME who manufactures electrical and data enclosures and wired solutions, reflects these larger trends. As providers of key elements to significant projects, they need to deliver on time and within set boundaries of quality and cost. Says Bridges-Taylor, “When the COVID-19 crisis hit, we witnessed disruptions in our supply chain ecosystem, however as a local manufacturer we were able to mitigate the adverse impact on customers effectively.

“As most of our work is factory based, remote technical work was not typically something we account for. As well as implementing extra health and safety practices in our factories and offices, social distancing measures saw many of our engineers and designers working from home for the first time, as well as the need to engage with customers without meeting face to face.

“To meet these pressing challenges we had to adapt quickly and accelerated our digital strategies. On reflection, we’ve certainly seen greater uncertainty and complexity in our markets right across the board, but good systems and partners have enabled us to continue our operations and even take advantage of new opportunities.”

The value of digitalisation revealed

B&R’s digitalisation strategy predates the current pandemic. Says Bridges-Taylor, “Digitisation is a key element in our overall business strategy. B&R is known for solving the many problems that happen when equipment, wires and people come together. The problems range from simple to very complex, with demanding space, safety and environmental issues to accommodate as well as incomplete specifications and lengthy, multi-vendor supply chains. 

“To deliver quality, service, and value, to meet all the standards and customer expectations, requires a high degree of technical know-how, a lot of communication and teamwork, combined with good project management.

“The pandemic made the value of our digital strategies easier to understand and embrace, and more widely appreciated. When restrictions started, we moved quickly to modify work processes and ensure safe work practices were in place, then we moved on to contingency planning. From there, we brought forward a few investments in IT infrastructure to increase our capacity to provide work-from-home options, while maintaining high levels of service standards for our customers.”

Echoing her sentiments, Khaou shares that many businesses had been turning to technology in every aspect of their operations, from providing easy scalability, greater reliability, or lower costs.

“In fact, improved performance is a key benefit of digitalization according to 90% of ASEAN businesses,” he adds.

Manufacturing a stronger future

Despite the current challenges, Khaou maintains that this period remains an opportune time to explore a proactive deployment of digital transformation technologies to improve efficacy, and respond quickly to changing market needs.

“With disruption set to be the new normal, manufacturers need to prioritize building flexibility and adaptability across the entire value chain — from the sourcing of raw materials, to managing fluctuation in demand, and even the way their workforce is operationalised,” he says. “The pandemic has presented new opportunities for reimagining this.

“If we examine the current landscape,” he continues, “it is evident that some manufacturers have recovered quicker than most. These are the businesses who have been quick to pivot and innovate, whether it is through repurposing their factories or digitizing their operations. These businesses also now find themselves better positioned to recover quicker on the uptake and capture new areas for growth.“

Khaou reminds us of technology’s role as a critical enabler in this process. “Digital acceleration can equip manufacturers to create optimized contingency plans that factor in real-time data and conditions. This will be a game changer in granting businesses the visibility and understanding of how potential disruptions may affect their supply chain and operations, and empowering them to make intelligent decisions to mitigate these risks.”

This has been the experience of B&R Enclosures, who were working with Dassault’s 3DEXPERIENCE Platform. Shares Bridges-Taylor, “before the crisis hit, we had already started to embed the 3DX platform that will ultimately allow us to connect and collaborate with our customers, and through its Product Lifecycle Management (PLM) platform, integrate into our manufacturing systems as well.”

During the pandemic, she continues, “It’s been incredibly useful to leverage a single platform that allows us to identify where our various jobs and quotes are and what the workload is. To be able to use this information with a high degree of confidence and transparency while our team have been working from home has been remarkable. Our team is also using the platform for general project management. They are finding its support of agile methodologies very appropriate for these times.”

Driving towards the future

Discussing technologies that can help to drive the recovery and growth of this sector, Khaou describes the virtual twin experience play an essential role in driving recovery and growth for manufacturers. “These are essentially virtual replicates of real-world manufacturing systems, that leverage real-time data, knowledge, and know-how from processes, to simulate the physical working environment.

“Having this predictive insight allows companies to reimagine their operations strategically and sustainably, optimizing them for resilience, and assessing the changes to be made without disrupting normal operations.”

“This also allows manufacturers to innovate more confidently. A virtual twin experience setup mirroring conditions in the real world and providing critical data on the impact of every change made across the factory floor, removes guesswork, and lowers the risk of innovation. The result is improved products with less defects, and faster time-to-market — two qualities that are imperative in today’s dynamic market.

“The virtual twin experience also equips organizations with the agility and real-time visibility to forecast changes in the supply chain and optimize their resources accordingly. This empowers them to stay ahead of the curve, respond quickly to changing market needs, and effectively mitigate any risks involved.

For B&R Enclosures, the experience has given them insights into how technology not only enables their business strategy but also informs it. Says Bridges-Taylor, “Anticipating how digital transformation will change our customers and our markets has been as important in our digitisation strategy as planning the digital transformation of our factories.

“We spend time ‘imagineering’ the future — that is, imagining how the future world is likely to take shape, and how we can add value in that world. Digitalisation has enabled us to conceive our business having sites across the world, and at the same time, be a local business with local presence, supported by best-in-class global IP.”

Discussing the lessons learnt as an SME, Bridges Taylor reminds us that the pandemic has shown how rapid and impactful change can be, bringing both challenges and opportunities.

“While solving today’s problems, SME’s need to keep a strong eye on the future and leveraging smart technologies can help them do that,” she advises.

“Seek ideas widely, Select a trusted technology partner to help you map your organisation’s path to digitisation and support your team as needed, to learn, grow and adapt. Here again, a strategy based on building agility and focused on delivering exceptional customer experience is key to navigating today’s uncertainties and emerging stronger.”