How Is Digital Manufacturing Improving Supply Chain Resilience?

by Emily Newton

The following article is the cover story in this month’s issue of Manufacturing Outlook eZine, published by Jacket Media Co. For a limited time, you can subscribe to Manufacturing Outlook for free.

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Recent events have thrown the general supply chain into a state of turmoil, indicating that resilience is not quite what it should be. While the pandemic deserves most of the blame, there are many other obstacles either related to it or stemming from disparate issues.

Take the semiconductor shortage, for example. Demand started high, then dropped when the pandemic first hit, so manufacturers slowed production, as was to be expected. However, the demand skyrocketed again, and chip-makers were already behind at that point.

That has left us where we are today, with a massive semiconductor shortage affecting so many industries, even auto-manufacturing. Auto-manufacturers chose not to order new chips when demand dropped, so now they’re in trouble as the demand continues to climb.

The pandemic may have been a catalyst for the event, but various decisions made by manufacturers, and other businesses, also contributed to the current state of the market.

So, how can we improve this situation across all industries? How can we make sure manufacturing and supply chain resilience is prioritized?

How Digital Manufacturing Improves Supply Chain Resilience

The answer is through digital manufacturing, which honors more agile and dynamic operations. But because that may be too broad of a description, to understand its impact on resiliency, you have to dig into what a digital manufacturer truly is.

What Is a Digital Manufacturer?

Simply put, a digital manufacturer has adopted or implemented digital technologies to empower, automate, and optimize regular operations.

In today’s hyper-digital landscape, nearly all manufacturers can be considered “digital” operators. They own and operate factories that are connected, with a proper network and infrastructure, and an integrated environment that collects, processes, and stores huge troves of operational data.

A digital manufacturer leverages data to improve processes, products, and beyond. Digital suppliers are essentially the same, utilizing digital and modern technologies to carry out supply chain operations and dealings. It’s a bit more complex than that, but the gist is all we need right now.

How Digital Improves Operational Resilience

What’s more important than the how, or why, is the what. What exactly does digital manufacturing provide to the average operation? How does it affect the supply chain, and what are the realized benefits?

Supply chain resilience is achieved through transparency. Understanding and identifying what other providers are doing is just as critical to continued operations as understanding your processes. If a supplier is experiencing a shortage, that’s not only going to affect you but also your partners, clients, and beyond. You must prevent that from happening at all costs, which may or may not require you to pivot operations.

One invaluable benefit of true transparency is that you’re able to see events coming down the pipeline, so instead of reacting after the fact, you can take proactive measures. Guess what makes something like that possible?

Data. But it must be data that is incredibly robust and detailed and allows real-time access. This is exactly the kind of data that is acquired through connected digital operations.

One European chemical maker, utilizing neural-network machine learning techniques, was able to reduce its waste of raw materials by as much as 20%. In turn, that improved the company’s energy costs by about 15%, boosting total yield. Something similar was also realized by a well-established precious metals mine.

It’s the transparency that contributes the largest boon to operational efficiency and resilience.

Smarter Operations, Better Output

The digital transformation of any industry, not just manufacturing, results in a huge swarm of actionable data, and along with that comes valuable insights, provided the information is analyzed effectively.

This data can help manufacturers mitigate or eliminate bottlenecks, improve product and service quality, reduce inventory, minimize waste, shorten time to market, and much more. Data even enables mass customization, allowing companies to better meet customer demands.

Deloitte says digital factory investments have contributed to a 10% increase in production output, 11% in factory capacity utilization, and a further 12% in labor productivity. In other words, digital and smart operations create a more effective business.

Digital Manufacturing Use-Cases

What does digital manufacturing look like? What are some viable use-cases for digital technologies within the average manufacturing plant?

  • Digital prototyping with market models for accurate predictions
  • Real-time and nuanced quality sensing
  • Workstation optimization to improve production line output
  • Regular equipment testing with up-to-date performance metrics
  • Predictive modeling to adjust for supply chain events
  • Automation and efficiency improvements to reduce or avoid bottlenecks
  • Smart conveyance systems to mitigate manual labor
  • Real-time asset tracking and theft detection
  • Predictive and smart maintenance
  • Stronger management and operational controls through real-time data

The data can also empower other opportunities that aren’t listed here. For example, choosing a manufacturing partner, or any number of suppliers, can be a challenging task. There’s a lot involved in choosing a provider, and it requires a great deal of research and communication.

Digital technologies can be used to enhance and automate related tasks by sorting through partner-related metrics. A machine learning tool might be used to compare performance stats, costs, and other variables to rank potential candidates. But it can dive deep into the available information to highlight who would be the best choice, making the decision easier and faster.

It’s these kinds of minor improvements where digital technologies contribute the most. Collectively, they can speed up operations, reduce stressors, and decrease costs.

Facing the Challenges

As with any venture or change, some challenges and risks come with digital manufacturing and digital transformation efforts.

  • Leadership buy-in is crucial for a successful rollout of digital solutions
  • Workers and leaders may be resistant to change
  • Siloed processes or departments can create unique bottlenecks, i.e. “tribal knowledge”
  • Cybersecurity concerns and the vulnerability of sensitive and proprietary data
  • Federal, state, and local regulations for digital technologies

Building Resiliency: Security for All

The threat of disruption continues to grow more each day, especially amidst the pandemic. Every supply chain player needs to enforce and implement procedures that improve resiliency, not just for their benefit but for that of the entire market.

Improving transparency, which also helps mitigate and manage risk, goes a long way towards securing true resiliency and sustainability. Those who focus on digital technologies and solutions, with the ultimate goal to boost uptime, output, and reliability, are preserving their business. Most importantly, they gain a competitive advantage over any rival that doesn’t.

Emily Newton is a technology and industrial journalist. She is the Editor in Chief of Revolutionized.

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