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Digital transformation improves agility and resilience against supply chain uncertainty

Digital transformation improves agility and resilience against supply chain uncertainty


An increasingly stressed supply chain is causing CPG manufacturers to look for ways to become more agile and resilient. Enabling the right digital capabilities can help manufacturing plants – and their workers – to respond to changing market conditions more rapidly says Sree Hameed, Consumer Products Industry Strategist, AVEVA

The focus for manufacturing operations in the consumer packaged goods (CPG) sector is changing. Where before plant efficiency was the top priority, this has now expanded to include agility – both of the plant and the wider supply chain.

In the past, the goal of digital investments was to improve cost efficiencies, with overall equipment effectiveness (OEE) considered the main key performance indicator (KPI). Even when supply chains became global, further increasing the risk of disruptions, manufacturers protected plants from variability with inventory so they could continue to focus on efficiency. However, the pandemic fundamentally challenged this way of working.

The speed at which it was able to disrupt global supply chains has been an unprecedented stress test and one we are still in the midst of. Almost every day there’s a new story about shortages caused by supply chain disruptions.

Covid’s effect on the manufacturing world simply amplified existing vulnerabilities, and as much as we might want to go back to how things were, this appears unlikely to happen.

Last year, a World Economic Forum (WEF) report identified four permanent shifts of focus that have come from businesses dealing with demand uncertainty and disruptions. At the top of that list are agility and customer-centricity, closely followed by supply chain resilience. These are now core topics in the post-pandemic recovery discussion, and manufacturing plants play a critical role in responding to today’s rapidly changing market conditions.

Enabling agility through digital “sense-and-response”

Built with real-time operational data, digital twins can help understand what the plant is “capable-to-promise”, by providing real-time situational awareness via edge-to-enterprise visibility. Furthermore, the digital twin provides the foundation for AI and predictive analytics to provide powerful insights that empower workers to optimise processes and throughput.

To respond effectively to supply chain disruptions that are occurring on almost a daily basis, capabilities like advanced planning and scheduling can align the plant with supply chain planning to quickly adapt to fast-changing situations. Improving the plant-to-supply chain linkage gives the business more options to respond by looking holistically across the “source-make-deliver” processes.

Enabling agility through empowered workers

A connected business, with access to information anywhere and at any time, increases agility and enables manufacturers to respond to the challenge of today’s dynamic markets.

Coupled with knowledgeable and empowered workers – who’re the ultimate drivers of continuous improvement and resilience – businesses can really push the boundaries of their agility. Indeed, a key factor for future manufacturing operations improvements is the collaboration of people and systems. Digital transformation makes information more accessible to employees, connecting them to plant processes, data and systems as well as other workers across functional domains and functions, developing a living repository of staff knowledge and experience.

Cargill’s CIO, for example, recently talked about how enabling connected workers led to the company’s organisational walls coming down and subject matter experts rising up. Effectively the right people came together, he says, adding that he was pleasantly surprised that such a large company could be so agile.

Take steps to make your business more agile today

Businesses cannot control incidents that occur across the wider supply chain, but having agility and resilience allows them to adapt quickly. By taking steps to improve yours today, you’ll be well-positioned to make the right decisions when issues occur, as well as gather data around long-term trends and patterns that will set you up to be even more agile and resilient in the future.

Technology providers are here to offer guidance and have the tools to help CPG manufacturers along their digital transformation journeys. Why not reach out to a trusted provider to discuss how digital transformation could improve your business’ agility and resilience, and help you to become better prepared to navigate today’s changeable manufacturing supply chain landscape.