How do you build resilience in industry across plant, process, and people? How can manufacturers unlock the productivity improvements and growth potential offered by strengthening their business’ resilience? Are there simple, cost-effective ways to boost industrial resilience? Why does resilience matter?
A recent virtual roundtable hosted by The Manufacturer and RS Components, a global omni-channel product and service solutions provider for industrial customers and suppliers, saw the manufacturing community come together to discuss further.
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- We’re about to build a new factory and are currently in the first planning stage. The conversation around resilience will help us have a successful business 100 years into the future. – Bicycle manufacturer
- What we’ve come through in the last two years has reinforced the need to have not only resilient supply chains, but resilient end-to-end processes. – Frozen food manufacturer
- I’m keen on the lessons learned from the last few years and then projecting forward given the significant transformation in the industry, what that may mean for us as a plant and how we can build on that. – Automotive manufacturer
- My interest in resiliency is within our supply chains, particularly as we’re seeing significant shifts in where materials are coming from – overlaid with the impact of the changes due to Brexit, the pandemic, and now Russia. We’re also very interested in the resilience in people; how do we maintain what we’ve built up over the pandemic and make it even stronger? And making resiliency part of the DNA of everyone at the company. –Chemicals manufacturer
- We look at this subject on a short-term basis, which is dealing with the shocks that we’ve had and servicing our customers. But we also see it very much as being part of a longer sustainability agenda. And if you can deal with the short-term challenges it sets you up for long-term sustainability. And that’s the focus of why we’re in business. – Tension wire manufacturer
- We operate on a very short lead time, from order to delivery. So resilience is pretty important to us. Not just in terms of our daily business, but in the medium- and long-term, due to the changes we’re seeing in the industry. – Automotive manufacturer
A world event like the pandemic and Brexit mean that manufacturing has been shaken to the core. RS Components is focused on future sustained prosperity, for workforces, businesses and the economy. But this can’t just be aimed around financial resilience; that is key, but where to invest in the right areas as a business is critical, as the business environment is becoming more dynamic and unpredictable.
Therefore, RS Components has produced a Resilience Index which consists of independent research, reviewing 20 years’ worth of data through the Office of National Statistics, across investment, productivity and employment. It was conducted in partnership with the Organisation for Economic Cooperation and Development and the Health Safety Executive.
Findings revealed that if the UK can transform its resilience, there is the opportunity of £26bn of improvement in productivity gain. It has become so important. Furthermore, RS has produced additional reports across plant, people and process to stimulate thinking and debate so that businesses can build for today, tomorrow, and their long-term future.
How do we build resilience into the design of a new factory and headquarters?
This is something all manufacturers have to consider because offices of the past will become very different in the future, in terms of how we create a culture and environment where people feel they belong, and that they believe in. To do that we need the flexibility and agility of talent from across the UK and the world.
From a HQ perspective, it’s about making sure it remains a resilient cultural environment; what is its purpose? How do you make employees feel part of it? What are employees going to be excited about now and in the future? Manufacturers must think about what the environment is going to look like to attract the talent, customers and partners that they want to work with. This will ensure that the business’s values and purpose come through from the moment anyone steps into the environment, whether virtually or physically.
We operate in uncertain times, but if a company’s team believe in a vision and in the future direction of the business, and they believe they are part of creating something that is sustainable and exciting, the passion and the adrenaline will see them through.
From a factory point of view, manufacturers must look towards autonomous technology and harness the power of data, but also, where that technology will add the most value versus people and skills, and how those elements will work in harmony so people don’t feel threatened. If that happens businesses will start to see resistance and people not buying into the company vision.
In addition, it is important that any new site isn’t isolated from what is around it. Supporting the wider community will resonate, especially with younger people. Research has shown that the next generation of manufacturers are very purpose driven. Therefore, a sustainability vision will help shape your resilience approach; a company will be able to hold it up as a north star and a guide towards what the company ultimately wants to create and the legacy that it wants to build.
Manufacturing insight: “The people aspect really resonates with me. Going back a few years I don’t think we would have come across as a very personable company. However, a new CEO came in who revolutionised the organisation and is always talking about the values of the company, and the principles of where we want to go to. I find it really authentic and inspiring.
“When he talks about the challenges that we’re going through from a company perspective, they’re always related to how that shapes the future. So that people resilience has come from his ability to show that vision of the future. That sort of leadership within an organisation can instil belief from people at all levels across the business.”
“People are at the core of everything you do and getting the best out of your people today revolves around flexibility. What we’re going to do as a business going forward, is not what we ever thought of two years ago. The lean transformation of the business is well established and embedded. But we have to link people into that process.
“What we’re hearing from our people is that they don’t want to work how they used to. So, as managers and leaders, we’ve got to recognise that. And I think we’re doing really well. The projects that we’re currently involved with are progressing faster because we are doing it the way our people want. The rigidity of the traditional 9.00-5.00 is history.
“If you’ve got production lines you can still allow some sort of flexibility in terms of packaging hours together. Cross train and multi-skill as many people as possible; this gives supervisors and managers the flexibility to move people around, which in turns allows flexibility without losing productivity.”
“Post-COVID, we started something called Open Doors where we have a Team’s call with anyone who wants to join; from home, offices or manufacturing sites. We’ve evolved that concept to what’s now called Open Stage where anyone has an opportunity from anywhere in the business to stand up and offer five to ten minutes on who they are, what they are doing and why they add value to the business.
“We’ve seen much more engagement because of this. So that resilience is great to build in. We’ve also seen our productivity go up because people now become more self-organising and are running their own parts of the show. In turn that has questioned the need for certain layers of middle management across all of our businesses.”
How do we learn the lessons of the past two years to really build resilience for other unexpected events?
We are operating within VUCA; a volatile, uncertain, complex and ambiguous world and business environment. And we are unlikely to move from that state for a while. Therefore, there is a need to move from a mindset of efficiency and effectiveness to agility and resilience; whether that’s to do with people, process or plant. How much we invest in innovation is changing the approach. This is a key lesson that has been learned, as we’ve got to continually invest in looking at innovation for the future.
It’s important to know where to build the right capacity in the right places. Across all industries, people are starting to think differently about outsourcing. It was thought to be adversarial, however, if you align with a partner with shared values, outsourcing can be efficient. It can be enhancing to a relationship because you can use skills from two organisations that are best placed to solve problems.
The industry often talks about learning and development around people and undoubtedly we are now moving more towards what makes people tick; and how technology can make life easier so they can focus on value adding jobs and job satisfaction. Therefore, reward recognition mechanisms and how they adapt as generations change are important. There are many lessons to be learned, but what is important is how those are taken forward and that businesses don’t fall into the trap of how it used to be. Agility and flexibility are two key elements to that.
Manufacturing insight: “We’re an employee-owned business, and everybody who works in the business is required to own £1,000 worth of shares. And so they share in the success and the challenges of the business. The shares of someone who invested 15 years ago are now worth over £40,000. So, there’s a direct correlation between business performance and the value of their investment.
“For us, it’s much more than a share ownership mechanism, because we’ve aligned it with a set of values. For us, to be a sustainable long-term business, we’ve got to get that value set right. And, we don’t complicate it; there are four or five elements that matter to us. We focus on being innovative, but also to have some fun; it’s about community and a willingness to learn. And those four things have stood us in incredibly good stead through the pandemic.
“What we’ve been through has been challenging and difficult. But that’s the world that we live in, and we’re going to have to deal with it. And the way that we’ve looked at the pandemic has given us some great opportunities to focus on things that perhaps we weren’t doing as well as we should have been. Fundamentally, at the heart of any business, whatever you do in terms of technology, process or systems, don’t forget there’s a customer at the end of it.”
“We talk a lot about our system spirit; that’s our DNA. A lot of that is about practising failure. We recognise we’ve got strong business processes and a team that’s decisive, and who’ve got the responsibility and the flexibility to make decisions for themselves. But we really need to know where the gaps are. And so we spend quite a bit of time practising failure scenarios and really trying to draw out the key learnings from that.
“In our manufacturing area, we work around the principle that the line must run. If needs be we will turn everybody’s attention to physically getting parts out the door, which is what we had to do for a couple of weeks when we had a 50% absence rate during COVID. But because everyone’s geared up to do that (the training and mindset is already there), it just drops into place.”
How can manufacturers achieve or sustain the required efficiency or cost effectiveness in the face of current market disturbances?
There’s been a definite shift over the last two years from just in time, to just in case, and that’s having an impact on people’s cash flows and bottom lines. Questions are having to be asked.
What was theory to customers before is now the reality. Whether that is skill shortages or high levels of inventory, they are having to rethink approaches. There’s no silver bullet, and there is some conflict between lean and the volatility of the world we’re actually operating in. An equilibrium has not been found yet and irrespective of industry, everyone is asking that question and battling with it.
Manufacturing Insight: “We haven’t really had time to get efficient over the last few years. So our volumes have grown and we haven’t been able to keep up with demand, particularly through COVID. For example, one supplier has gone from a two month lead time to 24 months lead time. So that’s been a real challenge.
“In addition, where we were single source, we’re now moving towards a real dual sourcing strategy on lots of our key components. So, we’ve also had to cope with all the challenges that come with that around quality standards etc.”
“There was an element of joy to be had out of the last two years, which sounds completely perverse. But we are totally reliant on our customers, and we were all in it together over the last two years. And consequently, there was probably far greater cooperation, collaboration and understanding than there’s ever been before. However, there is a danger that as we come out of the pandemic, we revert to pre-pandemic behaviours and expectations.”
“At the moment, demand is outstripping supply because of all the backlog in our supply chain. So, we took the decision to up our stock significantly, and we will buy as much as we can to fill our warehouses because we know we’re going to sell that stock. But we’re a size of a company that while it will impact our cash flow, it’s not going to be an issue for us, and we can manage that.
“I keep wondering when everything will reset and what the new resetting level will be. I have no idea at the moment and I don’t know when it’s going to happen. In the background, we are working on our lean processes and how we improve them, but it may be at a new stock level. And what you used to call lean for a certain level may have to be rethought.
“In addition, we’re all aware of sustainability/net zero. I don’t know whether people have parked that at the moment, because the focus is still around getting things done. However, I think that is going to be the next thing on the agenda and will suddenly hit everyone. So we’ll see a shift in focus back to the whole net zero sustainability agenda.”
“Lean drove down inventory, which was a dirty word. Now, if you have inventory you’ll get a promotion, a pay rise and reward recognition. We took lean to the extreme. We have a great production system, but as far as lean goes, we overcooked it. There’s a lot of great stuff in lean and transformation, don’t get me wrong. But it’s cost us a lot of money, and we got caught out.
“My personal opinion is that we will reset and have inventory levels that are higher than we currently have been carrying and which were driven down through lean. So, we will raise the bar on the amount of inventory we stock with dealers and suppliers worldwide. And we will collaborate much more with work done within the supply chain.”
How important is work culture to resilience?
Everyone’s got a role to create the right culture. People might identify a particular culture, but culture grows around behaviours and how you want to operate. RS were very cautious through the pandemic in terms of return to office and were very risk averse.
So, the first stage in the building (or in some cases rebuilding) that culture is helping people to reconnect, because without that, collaboration is a non-starter. Through the pandemic, everybody wanted to work together; there was a common cause and approach in terms of getting through it together. How that is harnessed and how that culture is created is going to take an investment of time and money; rebuilding teams and understanding what people have been through on a human level over the last two years.
People want to work differently. The nine to five has gone and you’ve got to match that with your customers and understand how they are operating. To create that new culture, RS has had to change its whole recruitment approach. By not doing so it would be impossible to bring in the right talent for the business to grow, but also to build and get people to want to stay with the company, build a career and be the leaders of the future.
That’s the next big challenge, because people, as consumers, employees, and colleagues, are now more demanding – and through the pandemic there’s been a realisation around what is important to people.
Manufacturing Insight: “Cultures are evolving and we’re seeing that in our business. We had a phase over the past 10-15 years where people would jump from job to job around different companies. I’m now starting to see a shift back to when I joined the industry where people are building their career with one company. We’re starting to see loyalty, both ways, coming back into businesses. And we’re seeing people recognising a longer-term future with an organisation, and that’s been another mindset shift of the pandemic.”
“This is not meant to be a negative but with regards to performance management, people have had the benefit of a lot of flexibility and in some cases, people’s expectations of what they need to do in the workplace and how they will do it, is more (in some cases) to suit them than necessarily the needs of the business going forward. So I think that is a challenge for us to try and redo performance management in a compassionate way which is data driven, but which also meets business requirements.
“There are real challenges in some areas of business to get that balance back. When talking about business resilience, we can’t shy away from performance management – there’s some negatives, in that not everybody is highly motivated, empowered and flexible. And where we’ve got areas that don’t meet our needs, we need to deal with that as well.”
“Regarding culture, what you do counts for more than what you say. We definitely experienced a very significant impact in the way we handled the initial return to work after the pandemic, and that raises questions culturally on whether we communicate and are open, transparent, and honest enough; which are things we’re still reflecting on.
“The other topic which has definitely come to the fore in the last couple of years has been the piece around mental health. Resilience is very much about supporting individuals and their own circumstances, as well as their own thoughts and concerns.”
Technology is important; innovation is important. But no matter how much we automate, and innovate, you’ll always need people. Leadership will be key to business agility, but also to purpose and values. Customers and employees will become ever more demanding, and businesses have to find the magic of collaboration that worked so well through the pandemic, try and replicate it and remind people of how good the outcomes were for everyone involved.
Read the RS Components Resilience Index; helping engineers understand resilience risks and how to mitigate them in the plant.