After a difficult 2020, relief for operations-intensive organizations may be on the horizon in the form of COVID-19 vaccines. There’s no doubt, however, that the business environment remains challenging. As the pandemic continues to ravage Europe and the United States, governments, entrepreneurs, and ordinary people are now hoping the situation will ease around the middle of this year.
The crisis continues to impact market ecosystems and supply chains, upending processes, organizations, and long- and short-term strategic visions. But the show must go on — there’s no time for inertia or indecision. Industrial organizations will continue to push forward, relying on operations managers to navigate an environment increasingly complicated by limited supplies, disrupted workforce availability, regulation, and fluctuating demand.
How can operations managers prepare for what’s sure to be a challenging 2021? Let’s focus on five areas:
Cost Management: This is an absolute basic, management’s bread and butter. Managers may face intense pressure in 2021 to further cut costs to ensure the survival of the organization. If possible, however, they should take time to consider which capabilities, skills, and production assets will be needed when the recession is over. They should think of what will be required to innovate processes and products and empower the workforce.
Workforce: Managers should continue transforming selected positions into digital-capable positions. Your colleagues are valuable and experienced workers — don’t let them get lost in the digital age. Implement a strategy to upskill and reskill, utilizing technology like AR/VR to make training even more effective and insightful.
Unlock the power of DIY tools and solutions. Many digital solutions have been simplified to the extent that almost anyone in the plant can become an “engineer lite,” capable of building an app or deploying a basic IoT-based condition-monitoring solution.
Health and safety must remain the top priority. Organizations have robust health and safety procedures and systems, but more can be done. Leverage AI-based digital technology to secure social distancing, comply with health and safety rules, and measure employee body temperatures.
Technology: Managers should make sure they fully understand the key features, technical parameters, and value of enterprise IT and OT. Understanding the world of IT and industrial IoT can help identify meaningful use cases, calculate ROI more precisely, and achieve tangible benefits.
The technology trends of 2021 are not much different from those of 2020. Strategic priorities, like building a business and operational resilience, need to be underlined by digital technology. As in 2020, implementing a collaboration platform, supply chain control tower, digital thread, or digital twin to improve transparency, efficiency, and resilience should be at the center of priorities in 2021.
Understanding AI-powered technology and leveraging its benefits is crucial. Managers should learn the differences between machine learning and deep learning, and between cognitive AI and AI, and map potential use cases for deployment by their organizations. Keep in mind, however, that advanced AI-powered models are mostly not plug-and-play solutions. It takes substantial time to teach them to the point that they provide meaningful value.
Real-time data can be used to enhance operational KPIs like overall equipment effectiveness and asset availability. IoT computing enables the processing of data at the network edge, allowing decisions to be taken in real time at the data source (e.g., a shop floor). Cloud computing-based complex models provide scalability and can process and analyze massive amounts of data. They are powerful tools that can handle predictive maintenance or predictive quality tasks.
Processes: Processes should be redesigned to enable organizations to realize the full benefits of digital technology and automation. Humans are still at the center of most processes, using interfaces like PCs, tablets, and mobile phones to analyze and contextualize data and execute tasks and corrective measures. Managers should ensure that digital technology outputs are properly utilized. Avoiding disconnects between information and action/reaction should be prioritized.
Environmental Sustainability: In 2021, initiatives to shrink carbon footprints, improve waste management, and use environmentally aware suppliers must be among an organization’s top strategic priorities. Digital technology can significantly support automated sustainability reporting and management. Managers should seek to leverage communication and visualization tools, IoT, and AI-based analytical models to track and manage parameters.
For many large enterprises and SMEs, recovery from the COVID-19 upheaval won’t be straightforward. Fluctuating demand driven by market uncertainty is likely to persist for some time.
Despite these and other difficulties, operations leaders remain under pressure to deliver outstanding results. It is important to remember that simply driving efficiency and reducing costs are not everything. Environmental sustainability, human resources development, and digital transformation are also key. Bottom line: To create a truly resilient organization, it is critical to fully align technology with people and processes.
Jan Burian is senior director, head of IDC Manufacturing Insights EMEA and leader of Europe: Future of Operations Practice .
