Despite facing disruption in supply chains, labor and customer demand, some manufacturers used data to launch innovative products while embracing digitization and automation to improve operations and foster growth, management consulting firm Wipfli finds in a new study of 194 U.S. manufacturers.

When economic changes disrupt supply chains, labor markets and customer demand, companies that do well bend with the times and find ways to cut costs and generate new revenue.

Bill Boucher, partner, Wipfli

But no one says that kind of shift is easy to pull off. When COVID-19 upset the once steady and reliable global flow of goods from thousands of suppliers, many companies resorted to their algorithm-powered data systems to predict better supply-and-demand outcomes and adjust their inventory and selling plans, says Bill Boucher, a partner and the leader of the manufacturing, retail and distribution practice at Wipfli, a management consulting firm.

Fixing disrupted algorithms

Still, even algorithms got disrupted. And the most resourceful companies took steps to update them.

“Many algorithms were not built for COVID,” he says. “Machines were making bad decisions regarding production capacity and forecasting what customers needed. But some companies were able to update them to account for new market realities, then share it up and down the supply chain with trading partners.”

Such tactics helped an elite group of manufacturers score well across the four critical performance areas Wipfli identifies in its recently released Resilient Manufacturers Study as crucial to surviving and even thriving during severe market disruptions:

• innovation in products and services;
• growth through digital solutions that build customer loyalty, revenue and profits;
• automation to improve productivity and customer experience; and
• resiliency that allows companies to manufacture quality products at fair prices despite market fluctuations and supply chain disruptions.

For the Resilient Manufacturers Study, Wipfli surveyed 194 U.S. manufacturers and found that three-quarters of executives consider their companies to be leaders in at least one of these four performance areas, but that only 7% said they were leaders across all four.

The study reports on a range of manufacturing trends and concerns — from how long it takes manufacturers to get new products and services to customers, to annual turnover rates for managers and frontline employees, to the number of data breaches manufacturers are experiencing per year.

Among other findings in the study, Wipfli notes that 72% of respondents could not launch new product offerings in less than six months, and that 19% lacked a strategy or goals for innovation or growth.

Improving performance

To improve such performance, the study asserts that manufacturers “need network infrastructures capable of passing manufacturing data to all who need it. Yet only a third of manufacturers have networks fully capable of moving data from machines to other machines, to the enterprise or to suppliers and customers. And one in five have networks that require major upgrades or complete overhauls.”

With effective digital connections with trading partners, it adds, “real-time tracking of supplies and products to and from facilities can alert manufacturers to problems before they escalate to customer disasters. Most manufacturers have some real-time tracking capabilities, but few track goods as extensively as possible.”

“Following the four paths to resiliency across operations, R&D, finance, human resources, sales, procurement — these are critical functions, and it’s a complex undertaking,” Boucher says. “Manufacturing executives must regularly review leading indicators for each of these activities to respond to performance issues.”

Boucher will address how manufacturers can cooperate with trading partners at the EnvisionB2B Conference & Exhibition next month on the panel “How Manufacturers and Distributors Collaborate Online.”

Luis Murgas, a Wipfli principal who advises manufacturers on digital technology across several industries, will speak on two EnvisionB2B panels: “The Roadmap to the Future” and “Avoiding the Pitfalls on the Path to Ecommerce.”

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