Adaptive manufacturing is the key to thriving amid volatility

Louis Colomb

Many manufacturers are locked into a strategy for success that has served them well for years. But proven manufacturing strategies have been disrupted by unpredictable market demands and supply chains, rising costs, shipping delays and staff shortages.

Rising volatility highlights the need for a new adaptive manufacturing strategy that aligns with current market conditions. By taking a more agile, contextually intelligent, and flexible approach to moving from one manufacturing strategy to another, manufacturers are in a better position to capitalize on opportunities and mitigate risk.

The success of any adaptive manufacturing strategy depends on collaboration between engineering, product design, production planning and scheduling, and shop floor production teams, and the systems on which they are based. CAD / CAM, PLM, ERP and MES solutions each have their own pace and lexicon. Only by allowing these systems to share real-time data can manufacturing teams communicate and collaborate to pivot quickly as conditions change.

Let’s look at some examples:

Use an alternative to material in short supply. Overall, furniture and mattress makers have been caught off guard by severe foam shortages. However, companies with real-time access to customer orders through their ERP systems knew exactly what their exposure to open orders was. Some of these manufacturers have pivoted production by having their CAD and PLM designer teams refine their products with coil and fiber-based substitutes. Customers approved designs and manufacturers met delivery dates.

Quick start of new product lines. A plastic manufacturer serving the automotive aftermarket has responded to growing demand for ventilators and respiratory components. CAD designers and engineers have worked with clients in the medical industry on CAD designs. They then sent them to toolmakers who created molds in five days working two shifts. Within 10 days, the production line was operational thanks to the synchronization and collaboration made possible by its CAD, ERP and MES solutions all sharing the same database.

Alignment of the prices of materials and finished products. Long-term fixed price contracts can guarantee the flow of income and the use of capacity during a stable economic period. However, manufacturers have seen costs double for steel, triple for lumber, and triple for polypropylene over the past year, making adjustable prices critical. Using automated pricing in their ERP system, a distributor with a manufacturing arm updated the customer’s personalized pricing within two hours and the company maintained its margins.

Favor products with a high margin. For years, automakers have added rich computerized capabilities to all vehicle models. However, with the global shortage of microprocessors, automakers are using manual dials and grips for entry-level models and reserving advanced electronics for higher-end, more profitable vehicles. They also use their ERP systems and EDI services to share real-time customer demand forecasts with chip vendors to help them reduce uncertainties and invest in greater production capacity.

An adaptive manufacturing strategy allows every team critical to a product’s success to communicate and collaborate in real time. As a result, manufacturers can turn to new products faster, gain visibility and cost control, and improve product quality. Far from being a short-term approach, the ability to prioritize changing customer needs, while overcoming all constraints related to supply chain, labor, costs, machinery and to the workforce, is the future of smart manufacturing.

Marjorie N. McClure