Throughout these past few months, many companies have shown amazing resiliency and agility, pivoting to make different products that can stem from current processes and have a positive impact on current needs: car manufacturers creating ventilators, distilleries creating hand sanitizer, textile and clothing companies making masks and PPE. The list goes on.
This agility has gone a long way toward supporting a good cause, but it’s also good business. Companies that are flexible and nimble enough to meet shifting demand are thriving. Here are some ways you can develop business agility to help you successfully survive long into the future.
- Streamline the product development process
Before a new product reaches production, it needs to run through the paces of initial vision to R&D, engineering, purchasing, and sales and marketing. Companies that don’t connect these different areas when creating new products will instead uncover inefficiencies, mistakes, and people just “winging it.” Building agility into your business means doing just the opposite: Establish processes that open communication between everyone down the line, and make sure they’re repeatable each time you roll out a new product.
- Manage data movement through software integration
Getting data from CAD systems (Computer-Aided Design) into an ERP system is a big pain point. Not only could engineers put wasted hours manually inputting data to better use, but manual data entry runs the risk of human error. Imagine if an incorrect bill of materials resulted in purchasing the wrong materials, or manufacturing the product incorrectly. To be more agile and efficient, your company needs to choose integrated software systems that eliminate manual work, reducing risk, and freeing up your most limited resource: time.
- Plan and digitally store alternate routing
Sometimes pivoting can mean making mostly the same product, but with some variations, such as a different way of manufacturing it in the plant, and/or using different materials due to unexpected supply chain shortages, for example. These different ways are also known as routings. If many versions of how to make a product are floating around, it is difficult to manage and can result in errors and wasted time and materials. Business agility comes from having the ability to digitally store multiple routings and use them to drive purchasing and production.
- Data-driven demand forecasting
Forecasting goes beyond setting sales quotas. Without an estimate of the sales demand, downstream departments such as purchasing and production are flying blind and operating by guesswork. But generating forecasts is often tedious work and based on gut feel rather than data. Agility comes from the ability to automatically analyze sales, create solid forecasts as a single source of truth, and flow these downstream to purchasing and production.
- Know your actual costs
Costing isn’t just an exercise in tallying up material costs. To be agile, you need the ability to track and quickly calculate all your costs, from raw materials and the cost of sourcing them to labor and equipment, so you don’t encounter unpleasant surprises later on.
- Involve the Purchasing department early on
The gap between what’s planned and what’s implemented is a common one, and bridging it can make all the difference in staying nimble. Without accurate purchasing, production can’t move forward. That’s why it’s so important that purchasing has visibility of what to order, and when, and to source new suppliers if necessary. Once more, it all comes back to having the right processes and integrated systems in place— upstream visibility ensures downstream efficiency.
- Plan production and capacity in a data-driven way
Agile companies don’t make promises before knowing they can deliver. That means figuring out the load new production adds to your plant. Will you need more overtime? A second shift? New machines? A shift in existing resources? Will you outsource work? You can answer these questions—and avoid constant firefighting—if you have clear visibility of the predicted load on your plant. To achieve this agility you need a system to collect and analyze both upstream data such as sales demand, and operational data such as machine capacities and bottlenecks.
- Track and digitally account for returns
Businesses often think about how they ship products to customers. What about how customers send products back? Along with COVID-19 came a surge of returns as customers found themselves canceling orders or returning purchases they already made. Manufacturers struggled without automated systems in place to manage the entire returns process, including authorizing returns, issuing credit notes, and tracking returned inventory. Often, handling returns is an afterthought, with no visibility of the true hidden costs. The most successful companies were those that replaced manual systems with digital ones.
Becoming agile isn’t quite as easy as just installing software (though that can help). Business agility doesn’t happen overnight; there’s a lot of work involved. Start with your processes. R&D, engineering, sales, marketing, purchasing, production. Everyone needs a clear path where communication, knowledge, and data can flow within and between teams. If the right hand doesn’t know what the left is doing, finding a solution is a priority.
The impact COVID-19 has had on manufacturing speaks to a final lesson that reaches beyond the current pandemic: Embracing change itself is how we survive. Use this opportunity to shore up your processes, and ask yourself those hard questions about how you can respond to shifting demand.
Software alone won’t create agility, but it can build a solid foundation for it. Software partner PositiveVision has been working with companies in the Greater Chicago area for nearly two decades to provide the right software to build the necessary foundations for agility, profitability, and sustained success. Find out how we can help your business begin building agility.