COVID-19 has sent ripples through supply chains across the world, and no industry has been immune. At the same time, demand for supplies has spiked. And companies everywhere are struggling to keep up.
Proto Labs Inc.—an ecommerce-based provider of manufacturing services such as 3D printing—recently surveyed 108 designers, engineers and supply chain managers in 12 industries to gauge their response to the pandemic and how digital manufacturing can help them survive COVID-19 and beyond. The results show that the pandemic has prompted many manufacturers to adopt modern technology to automate traditional manufacturing and industrial practices.
“The most important takeaway here is that this is the new normal,” says Bernadine “Bernie” Henderson, director of procurement at Protolabs. “People are changing how they work, and more people than ever are working from home. With those dynamics, companies must embrace a more digital world.”
Productivity and supply chain disruptions
The survey report, “Product Development and the Supply Chain: How to Survive a Pandemic with Digital Marketing,” revealed that working remotely has created productivity challenges for manufacturers. 67% of respondents said that more than half of their staff was working from home in June. Among that same subgroup of respondents, 53% said remote work was causing a lack of tools needed to be productive, and 52% said their biggest challenge related to remote work was dealing with a reduction in collaboration among teams.
Henderson says another challenge during the pandemic has been the weakness COVID-19 exposed in the traditional supply chain. “Within the traditional supply chain model, companies are building inventory into their supply chain—sourcing supplies from around the world—to drive the raw material costs down,” she says. “In the world of speed, that doesn’t really work—and it ties up cash flow.”
The survey showed that nearly three-quarters of respondents experienced supplier delays during the pandemic, and at the same time, 56% saw a shift in demand. According to Henderson, speed, quality and reliability are the most essential benefits companies can gain from their suppliers. With suppliers not being able to deliver on that promise—at a time when it’s more important than ever—that traditional supply chain model failed for many companies.
COVID pressures lead to innovation
“COVID-19 exposed the need for manufacturing to shore up resources now, but the companies that thrive in the future will take the lessons learned during this crisis to build agile, resilient and modern supply chains that spurt innovation,” Protolabs says in the survey report. “Digital manufacturing provides that critical speed and flexibility.”
The Protolabs report cites several cases of companies that used digital manufacturing services this year to deal with disrupted supply chains.
- Breathe99, a manufacturer of B-1 breathing masks used for protection from such common things as pollen and dust, used 3D printing to develop and manufacture new versions of its masks suitable for protection from the coronavirus;
- The Cleveland Clinic worked with Protolabs and injection molding through digital manufacturing to develop new “High-Line” equipment designed to let medical professionals work more efficiently and safely with intravenous treatments.
- FOAM-iT, a producer of equipment used in spreading disinfectants for industrial cleaning, worked with digital manufacturing to modify products and keep up with surging demand as some of its suppliers went off-line during the pandemic.
Surviving—and thriving—with digital manufacturing
Many companies seem to be embracing these disruptions as a new normal, the survey indicates. 64% of respondents said they don’t think supply chain risk will change for at least another three months, and more than half don’t think inventory will be at more predictable levels for at least three more months.
Still, many see a bright future ahead. 86% of respondents said they are optimistic about the future of their business, and two-thirds said COVID-19 has uncovered areas for innovation. Additionally, 82% say they expect to see an uptick in new product development by the end of the year while 30% believe innovation is already on the rise.
While traditional supply chain strategy was about finding the cheapest parts wherever possible, some manufacturers recognize the flaws of that model. And many are now investing in digital manufacturing to build agile, resilient and modern supply chains that will protect them against both the new and ongoing crises around the world.
The supply chain of the future
According to the survey, COVID-19 has underscored the importance of building a supply chain that is future-proof. But there are some important lessons manufacturers should consider when leveraging this opportunity.
They should plan for changing conditions in the supply chain and the ability to quickly adapt. They should thoroughly research their supply chain and identify weaknesses. Using regional suppliers is also a good way for companies to avoid global disruptions. “Protolabs, for example, is a global provider with regional suppliers,” Henderson says. “That helps us maintain our supply for our customers when they need it.”
On-demand production is another attribute of a modern supply chain. When demand increases, supplies can be produced quickly, which helps companies navigate market volatility as well as keep inventory and warehouse costs low.
Supporting mass customization
A mass customization approach can also support supply chains and mitigate disruptions. While mass production used to be the norm, mass customization is changing how manufacturers must react to market demands. On-demand manufacturing has the digital capacity and rapid capability to meet those mass customization needs.
And finally, the ability to act quickly in times of change can help companies minimize disruptions. Leveraging the help of a digital manufacturer that can offer reliable, fast lead times will help companies respond to market demands as well as uncertainty in the supply chain.
But to truly adopt an agile, resilient and modern supply chain model, Henderson says companies need to start by rethinking their key metrics. “Sure, it’s always important to look at revenue and bottom-line profitability. But as they change how they operate, key metrics should change with it,” she says. “And consistently thinking through what those metrics are is what will ultimately drive behavior.”
Cate Flahardy is a Chicago-based freelance journalist covering business and technology.
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