Following a turbulent 2020, the stage is set for a year of growth and recovery in 2021. How can manufacturers leverage technology to overcome challenges and embrace opportunity in 2021 and beyond?
2020 has been a turbulent year for the UK manufacturing sector. The COVID-19 pandemic has posed serious challenges that manufacturers have had to navigate in order to survive, as – like almost all organisations throughout the UK – they have adapted since the beginning of the first lockdown in March just to keep their heads above water.
The COVID-19 pandemic has resulted in severely disrupted supply chains, compromises to workforce safety, rapid changes in the channels to market, and changes in consumer behaviour. Even as hope emerges with the development of life-saving vaccines, manufacturers and their suppliers are adapting to an uncertain future. This will only continue as businesses throughout the UK and Europe navigate the complexities of Brexit – currently the other great unknown in the manufacturing sector.
To add to the already decidedly gloomy picture, cybercriminals have targeted the manufacturing sector with increased vigour in 2020, making it one of the most targeted industries in the UK. However, if 2020 has been a year of disruption, there’s hope that 2021 will become a year of growth and recovery.
Technology helped manufacturers shore up their rapidly changing landscape during the worst parts of the pandemic, and will hold the key to manufacturing success in 2021. In this blog we provide insights into how you can leverage technology to overcome the challenges your manufacturing business will face in 2021.
Key Manufacturing Trends in 2021
The COVID-19 pandemic has forced manufacturers to adapt to survive in 2020. But what are the key trends we anticipate in 2021? Let’s take a look at five 2021 trends we believe your manufacturing business should be thinking about.
Trend One: Managing the Supply Chain
If 2020 has been the year of COVID-19, 2021 is likely to be the year of Brexit. The rapid exchange of intermediate goods such as car parts with numerous EU countries, along with the ability to order these goods ‘just-in-time’ to avoid stockpiling costs, are things that – until now – UK manufacturers have taken for granted. However, after the Brexit transition period ends these critical links may be disrupted. 2021 will require a re-evaluation of manufacturers’ operating strategies.
In order to overcome the challenges that Brexit is likely to present, manufacturers will need to get a lot better at managing and leveraging their data. By leveraging data effectively, manufacturers can reduce waste and variability in their production processes while dramatically improving product quality and yield (the amount of output per unit of input).
Trend Two: Selling Direct to Consumers
The high street – already propped up for some time now by grocery sales – has been decimated in 2020. Consumers’ increasing adoption of online retail is causing brick and mortar stores throughout the UK to close down, and this is having a direct impact on the manufacturing sector.
Manufacturers used to having strong brick and mortar retail partner relationships are seeing less routes to market as many of these retailers scale down their operations. In 2021, many of these manufacturers will move to direct-to-consumer (D2C) models to adapt.
D2C holds exciting potential for UK manufacturers, which has been evidenced by its recent uptake: D2C is projected to maintain a further 19.2% growth in 2021. However, entering the world of consumer-facing ecommerce also brings challenges.
For manufacturing businesses considering moving into D2C, this means developing a more sophisticated ecommerce model that accepts card payments. This ecommerce model will need to be complemented by adapted warehouse and delivery services delivered by increased warehouse staff and backed up by a consumer-facing contact centre.
Trend Three: Cyber Security
Manufacturers operate in a hostile digital landscape, where resourceful and highly-motivated attackers seek to steal money and valuable intellectual property from their victims. The 2021 cyber security picture for manufacturers is likely to be one of evolution, not revolution, as cybercriminals adapt their methods to maximise the efficiency of the attacks they launch.
Technology can help manufacturers mitigate the cyber risks they will face in 2021, but it does not provide a comprehensive solution in and of itself. Effective cyber security requires a combination of people, processes and systems. In order to enhance their cyber security, manufacturers will need to go on a cyber journey that runs from business strategy through to management, monitoring and continual optimisation.
Trend Four: Business Agility
Agility will be everything for manufacturers in 2021. COVID-19, Brexit and the cyber security landscape are all volatile influencing factors that are developing at pace. Manufacturers will need to be agile if they are to overcome these factors, along with the disruptions and changes to operating conditions that they will inevitably face throughout the year. Achieving this agility will involve both infrastructure and people.
Scalable cloud infrastructures enable manufacturers to achieve infrastructure agility through their performance, relative cost-efficiencies, speed and dynamic capacity. And manufacturers can also use Teams and Microsoft 365 to evolve and enhance customer service delivery and operations during these challenging times.
Trend Five: Enhance Connectivity
The Internet of Things (IoT) will continue to transform how manufacturers operate in 2021. Although the IoT could mean everything in the world that is connected to the internet, in manufacturing it tends to be used specifically to describe computing devices that are embedded in machinery used throughout the manufacturing process, allowing devices to communicate with each other. This enables manufacturers to build intelligent automated systems to maximise efficiencies and minimise costly downtime for maintenance, for example with predictive modelling.
In order to leverage IoT, manufacturers will need to ensure that they have appropriate connectivity in place in order to allow their connected devices to communicate. Manufacturers should consider how their devices interconnect within and across operating locations, along with data transfer and storage implications – always asking if data is transmitted and stored in an appropriate, secure manner. Manufacturers are a popular target for industrial espionage, and unsecure connectivity and storage could result in data falling into the wrong hands.
Overcome Challenges and Embrace Opportunity in 2021
In this blog we’ve provided insights into how you can leverage technology to overcome the challenges your manufacturing business will face in 2021. At Six Degrees we believe that the intelligent application of secure cloud-led technology will enable your manufacturing business to thrive even amidst challenging operating conditions, putting you in the best place to respond with agility to the Brexit, the ongoing COVID-19 pandemic, and the increasingly hostile digital landscape.
Our new eBook expands on the trends we’ve covered in this blog, offering practical tips on how technology can help your manufacturing business get ahead in 2021. You can download it here.
If you’d like to learn how technology can support your manufacturing business, schedule a call with one of our experts.