Right now, if you’re leading a manufacturing business, you may feel you have enough on your plate without worrying too much about the future. In the last few months, you’ve not only had to work through 'routine' business challenges across a multitude of areas, from production and pricing to recruitment and regulation, including supply chain disruption, such as semiconductors getting stuck all over the world.
Let's be honest, it's been tough.
But think of the future you must – and here's why. Long-term prosperity in business is rare and decreasing. In the US, for example, research has shown that on average companies currently remain in the S&P 500 index for just 18 years, down from 25 years in 1980 and 61 years in 1958. It’s a similar story elsewhere. In the UK, of the companies listed in the FTSE 100 in 1984, 80% have now disappeared. In the technology sector alone, names like Ferranti, Psion, Acorn Computers, Marconi, GEC and ICL are an increasingly distant memory. And small firms, with limited resources, are even more vulnerable than large. It has long been true that more than half of new UK businesses fail within five years.
The main way in which companies die is through merger or acquisition (if they’re large) and insolvency (if they’re small), but either way, the majority fail to navigate disruption.
Disruption occurs when new, often unexpected, events and trends take hold in an industry or market. Such developments could be political, economic, social or technological – think, for example, of the powerful forces of globalization, climate change and digital transformation. Disruption sparks innovative technologies, new customer demands, new regulations, or competitors with new business models, products and services – or, usually, a combination of these factors.
So, what can manufacturers do in the face of such forces? The key, as far as possible, is to be alert to them emerging and have a plan to adapt to them.
At BSI, we encapsulate this challenge within the concept of Organizational Resilience, and we are committed to supporting manufacturers to achieve it. We define Organizational Resilience as “the ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper”.
While there is always an important element of risk management in Organizational Resilience, it is equally focused on business improvement. Resilience reaches beyond survival, towards a more holistic view of business health and success. Resilient organizations are able to adapt to a changing environment in order to remain fit for purpose. They are flexible and proactive – seeing, anticipating, creating and taking advantage of new opportunities in order, ultimately, to pass the test of time.
As far as today’s most disruptive forces are concerned, manufacturers are acutely aware of the urgent challenges of globalization and climate change, and the need to embrace sustainable business goals in response to them. But when it comes to managing the risks and taking advantage of the opportunities that stem from ongoing digitalization, manufacturers – and SMEs in particular – have been slower to develop robust strategies.
The first priority must be to build awareness of the game-changing digital technologies that are rapidly emerging, including:
- Automation and robotics that can increase productivity, accuracy and safety
- Data analytics that can evaluate a wealth of data (or big data) from manufacturing processes to identify trends and improve decision-making
- Artificial intelligence (AI) and machine learning, where computer systems not only collect and analyze data, but also act upon it, for example to conduct maintenance and other business tasks
- The Internet of Things (IoT), which enables analysis and machine-to-machine communication of big data to drive manufacturing efficiency and productivity
- Augmented reality and virtual reality to create new ways of visualizing and simulating products and processes
- 3D printing, or additive manufacturing, giving the potential to rapidly design and produce tooling and components
- Cybersecurity measures to protect businesses from digital attacks, maintain data integrity and safeguard intellectual property.
Preparing for the future
On the back of these digital innovations, manufacturers are seeing countless new solutions emerge, offering the prospect of more personalized, customized products, improved process efficiencies and smarter, more sustainable business models. Digital manufacturing promises to optimize inventory management, logistics and productivity. Possibilities range from automating parts and inventory replenishment from suppliers, to aiming to create fully automated and digitized factories, through to managing products when they are in use.
Many businesses are content to base their strategies on what’s worked in the past, but, as we’ve seen when it comes to their survival rates, for many this means doing too little too late. As the old adage goes, ‘fail to prepare and you prepare to fail’.
Instead, think of disruption as an opportunity. So, if you see an innovation you can leverage, don’t wait until your competitors have stolen a march on you, but seek to adapt to take advantage of it. Where there are risks, consider ways in which they can be managed.
A standards-based approach
BSI can help. We are focused on a standards-based approach to shape best practices and increase confidence and trust in digital solutions to benefit the wider market.
Standards can encourage the adoption of excellent habits to deliver business improvement by embedding competence and capability throughout your business and its supply chain: from products and services to people and processes; and from vision and values to culture and behaviours.
Adopting a standards-based approach, coupled with pan-industry collaboration to break down barriers and build support, is helping to underpin digital transformation in the manufacturing sector. Perhaps your business already demonstrates quality assurance through certification to ISO 9001, or proves its environmental credentials through ISO 14001? You can build similar trust with customers and other stakeholders when it comes to digital, data-driven solutions. For example, you can show that your systems are robust by adopting the business continuity standard ISO 22301, or that you have resilient information security standards through ISO/IEC 27001. Or, if you manufacture connected devices, you can show that these are safe and cyber-secure through the Kitemark for IoT that we have recently developed.
BSI is constantly working with key partners in numerous manufacturing sectors to develop standards and recommendations to help manufacturers operate securely in a more connected and digital manner. We can support you as you embrace today’s digital disruption, helping you achieve the organizational resilience you need to manage the risks digital transformation poses and, above all, grasp the opportunities it offers – now and long into the future.