We’ve all been spoiled. We’ve all experienced the Amazon model, and now we all want that. No matter whether that’s a B2B model or a B2C model, we all expect that. We see something, we want something, we expect it to be there next day. And the manufacturing world is certainly catching up to that. To be able to do that, you’ve got to be able to build that flexibility and agility into the model.
We used to think about manufacturing as a very resource- or people-intensive model, and that’s part of the reason we moved so much of our manufacturing offshore 20 years ago. The reality is that we don’t have enough resources to do the work even in the US today. I was doing work for a very large automotive manufacturer, and on a day-to-day basis, they had about a 46% absenteeism issue. That means you’re either filling with temps or you’re not getting work done. That’s a huge number — and that was prepandemic, by the way. That wasn’t postpandemic or during pandemic.
What a lot of people are looking at is, technology has been an inhibitor over the years. Robotics have been too expensive. They didn’t work as expected. We didn’t necessarily have the intelligence to simulate and forecast the way we needed to. But there have been so many advances over the last five to seven years. What you’re seeing now is, we’re not bringing technology and automation in to remove workforce. We’re bringing technology and automation in to do work where there is no workforce. And as more and more discussion about onshoring rightshoring, nearshoring, happens, that’s what you’re going to see. It’s a much easier discussion for greenfield plants that are going to be built and are being built where you drive automation in and fill the gap of where there is no labor market.
The bigger challenges in the brownfield plants that are there, their legacy, there’s not always a big propensity to make new investments in them, but those are where the opportunities are. There’s a concept around the globe called lighthouse manufacturing plants, and the World Economic Forum created these as your top manufacturing plants in the world either because of the best processes, the best technologies, the most efficient, etc., and those are great — and nine out of 10 of those are new plants that are being built. The challenge is there are the thousands of plants that we have around the world that have been there for 20, 30, 100 years, and what do we do with those? That’s where a lot of the challenge comes from — how do we adapt those older facilities, those brownfield facilities, to be able to become more agile?
In many of those, it is a baseline-technology discussion. Can the pieces of equipment that might be 70 years old even communicate in today’s world? There is a foundation of things that have to happen to get to an agile-factory type of response. They aren’t daunting. They aren’t overwhelming. There are different ways to start — there are different ways of getting there. And it always comes back to, what are the challenges that plant is facing? Is it in a market where labor is a huge challenge — yes or no? Is it in an area, or is it a product set, where higher-end technology and automation can drive value to it? Too many people lump manufacturing as one-size-fits-all, and it isn’t. And part of the way to achieve an agile manufacturing facility is to understand your challenges, your products, your geographic positioning, and start making the steps from there on what you have to do.
Some of that is going to be, the people we have, we might need to upskill them to be able to run more advanced pieces of equipment and technology. Other areas, it might be more focused on getting better collaboration with your value chain and getting more foresight about what’s happening down the line versus waiting a month for bad news to happen.
A lot of this starts with, do we understand the problems and the challenges at that specific plant, and how are we addressing the localization of that specific plant? And then we can define, here are the technologies we can apply, here are the resources we need to upskill to start going after that. One of the biggest challenges people look at is, at 6:05 in the morning, what do I do next? And a lot of that is simulating what are all my constraints, and what can I make right? I’ve got to put something out the door today. With all the things I have, what can I actually do? And I need to do that in about five minutes, and not sit there and send this back to some central planning computer that’s going to take half a day to run, and then I have to interpret answers. So we have to be intelligent about giving quick responses, quick answers, to say, “What can I do?” “What should I do?” That’s part of the agility.