SUPPLY CHAIN
MINIMISING SUPPLY CHAIN DISRUPTION HOW AUTOMATION CAN HELP MANAGE WORKER SHORTAGES AND VARIATION IN DEMAND
he COVID-19 pandemic has been hugely disruptive to global business operations over the last 18 months. The lockdowns of 2020 forced many organisations to abandon traditional processes and embrace new technologies in order to remain operational. Fast-forward to today and labour shortages, rising transport costs, and ongoing travel restrictions have caused serious disruptions to global supply chains.
T
The good news for manufacturers is that many of the same technologies which lent a hand during the early stages of COVID-19 can also help to mitigate the risk of supply chain disruption. In addition, these technologies are now more cost-effective and accessible than ever before allowing more industries to unlock greater operational efficiency, embrace fluctuations in production demand, and mitigate supply chain risks, as Andy Barrett, Domino Printing Sciences (Domino), explores.
DISRUPTED SUPPLY CHAINS & DEMAND
Today’s news headlines are dominated by supply chain disruption. There are widespread worker shortages across the supply chain – in everything from agricultural roles, to production environments,
and transport and logistics. Worker shortages are in part due to continued self-
isolation and sickness, as well as reduced capability to travel across borders leading to demand for local worker reskilling. In addition, many industries have experienced higher staff turnover rates over the last 18 months, as the disruption caused by the pandemic has led to workers rethinking career choices – leaving gaps in employment, as well as knowledge and experience.
Prior to the pandemic, US statistics revealed that 38% of manufacturers had trouble finding candidates with the right skills; a number that today sits at 54%, according to the Workforce Institute at UKG. In addition, global labour productivity growth is at a 20-year low of less than -2% – negative growth for the first time since the global recession of 2008. We also are facing a global shortage of shipping
containers, inflated shipping and energy costs, and significant fluctuations in demand across industries – all of which combine to drive demand for local products and increase pressure on local supply chains. In March last year, during the height of the pandemic, King Arthur – American’s oldest flour company – sold approximately 6.1 million bags of all-purpose flour – a 268% increase from the previous
year. Fast forward to today, and while flour demand seems to have stabilised, supply and demand variabilities are causing issues in many other sectors. In the UK, high demand for CO2 is putting pressure on food and beverage supply lines, there is ongoing disruption in industrial sectors with extruded plastic goods facing delays, and shortages of aggregates, cement, and plaster. Equally, on a global level, we are seeing increased demand for microchips (for automotive, home appliances, consoles, and mobile phones), furniture, and high-end luxury goods. In many industries, fluctuations in demand, including seasonal demand (e.g. toy production in the ramp up to Christmas, and ice cream production for summer months), have traditionally been addressed using short-term, largely unskilled workers to dynamically increase and decrease production. But today, these workers are not necessarily available. So, what is the solution?
EMBRACE AUTOMATION The last 18 months have demonstrated the real value of Industry 4.0 with businesses embracing automation to help mitigate disruption caused by COVID-19, and other unprecedented challenges including the blockage in the Suez Canal, and an
12 MARCH 2022 | FACTORY&HANDLINGSOLUTIONS
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