The post-pandemic exit strategy will dominate business strategy discussions in 2021-22
Industry 4.0 brought the efficiency of advanced tools and technology to manufacturing. Finally, manufacturers were going to be able to use tech to gain an advantage from investments they have been making. Early adopters of Industry 4.0 were reaping benefits. As for the most, as plans were being drawn, companies faced a new challenge – COVID-19. The pandemic threw a spanner in the works. With an average of less than 30%* adoption rate globally, Industry 4.0 is still to make a big impact on the manufacturing industry as a whole.
Source: IOT Analytics’ Industry 4.0 technology adoption, adopters and vendors, by region
With some pushing the idea that 2021 ushers in Industry 5.0, how will the industries react to recovery post-pandemic? Many manufacturing companies are folding – if they haven’t still. For those that remain, big plans make way to situationally aware tactical play. The need to stay profitable and invest in technology to become more resilient is a fine balancing act for these companies.
With the need for a big reset, the man-machine interplay is going to need a revisit. The start-stop-start-pause-start sequence is leaving companies to deal with constant fluctuation in demand and the looming uncertainly of the supply chain. What industry experts suggest is that companies need is an agile framework that helps bring innovation and sustained growth together. Gartner released its Post-pandemic Planning Framework. In three phases, it illustrates how companies can think of their pandemic exit strategy. With a grinding halt to the now old-normal life in lockdown, to teetering reopening, and now entering the new normal, businesses will find themselves tacking different challenges based on their location in the framework.
Source: Reset Your Business Strategy in COVID-19 Recovery by Gartner
The framework also lays down five paths that a company can take to safely manoeuvre the situation. For many products, demand suddenly dropped to zero. For others, demand skyrocketed. In both situations, companies had not forecasted such a spike. For example, essential products saw high demand with many families overstocking. As for non-essential items, the initial demand fell but saw a pent-up demand. The exit path for companies that experienced high demand is to either rescale, reinvent or return smoothly to baseline. For companies that saw a decrease in demand and those who were not able to manage the demand uptick, reducing or retiring are safe bets. While others who were able to support demand partially even if not fully, returning to the baseline and reinventing themselves is alpha.
The revived human-machine-process trinity will need supporting infrastructure. Industry 4.0 offers a host of possibilities to build a robust system to tackle current and future business needs. Modern manufacturing will have to rapidly adopt supporting technologies like the cloud, IoT, modern ERP, AI-driven cloud-based CRM, Big Data, and mobile interfaces. For companies looking to make up for lost opportunities and momentum, the use of IoT to gain an advantage in asset quality, performance optimization, and customer experience. Legacy systems and applications will either have to make way for the new or need modernization by a reliable team of experts. The executive buy-in is central for a successful pandemic exit.
Work will never be the same again. The new normal mandates easing up of restrictions and implementation of new policies that support doing business globally with ease. A slow return to work, especially in the manufacturing vertical, will result in a slow ‘re-take off’. This is an opportunity to re-plan work before full-scale operations begin.