2021, disruption, manufacturing, supply chain, year in review, 2021 recap

The Oxford Languages and Merriam-Webster dictionary folks have advanced “Vax/vaccine” as 2021’s word of the year, but we think it really should be “disruption.” We’re tired of hearing about it in our business planning, and we’re tired of living with it on the shop floor.

Supply chains are more fragile than ever, shipping and trucking backlogs have hit multiple industries endangering holiday celebrations and causing general shortages, and the lack of certain products (read: semiconductor chips) are crippling industries. A talent and labor shortage continues, and remote work schemes will probably remain the norm well into 2022.

2021: A Year of Continued Disruption…for All Industries

QAD CMO Carter Lloyds described shipping delays, energy issues/sustainability challenges and the Carbon Bubble as three major industry disruptors affecting manufacturers.

With supply chain disruptions around the holidays, we saw how existing vulnerabilities in the global supply chain were exacerbated by the COVID-19 pandemic and its cascading effects:

  • Lack of visibility into actual consumer demand
  • Fragile planning and production processes
  • Lack of real-time communication between the manufacturing enterprise suppliers, third-party logistics providers and consumers

Medical and Pharmaceutical Technology

Several industries stood out with solutions to disruptions. In the medical technology area, we saw forward-looking manufacturers seeking to improve collaboration with supply chain partners, building in risk mitigation planning and management, increasing safety stock to avoid raw material shortages, and automating business processes with enterprise and operational software applications.

Packaging and Consumer Packaged Goods

In the packaging industry and in the consumer packaged goods (CPG) industry, it may sound trite, but the only constant truly is change. The industry is accustomed to the rapidly multiplying number of new SKUs, calls for sustainability, customer demands that change on a dime, and issues in storage and transportation. Like other industries, packagers and CPG manufacturers that seek to improve collaboration between planning and operations can respond with more agility to upcoming disruptions.

Automotive

In his Dirty Words Podcast, QAD Vice President, Automotive and Mobility Sector Tom Roberts talked about disruption in the automotive industry with a focus on two issues:

  • The move from manufacturing internal combustion engine (ICE) vehicles to autonomous, connected, electric, and shared (ACES) vehicles
  • How the industry will face the post-COVID world

Tom also wrote about automaker job shifts with the move to electric vehicle production, An Honest Conversation, About Jobs and Chips” in Embedded Computing Design magazine. More disruption.

Food and Beverage

QAD Director for Consumer Products and Food & Beverage Vertical Markets Stephen Dombroski talked with Lara Sowinski, Executive Editor, and co-founder of VinRoutes.com, about disruptions in the winemaking industry. She identified many, including:

  • Closures of in-person dining, bars, travel, business and entertainment events
  • Spikes in online ordering and direct-to-consumer sales affecting the supply chain
  • Changes in wine consumption affecting all areas of production and the supply chain including transportation, warehousing, distribution and packaging
  • International and domestic shipping disruptions
  • Overall worker shortages, including agricultural workers, drivers, warehouse workers, etc.
  • Rise in ocean freight rates
  • Raw materials shortages, for example, of aluminum and wooden pallets
  • Wildfires in growing regions, climate change, sustainability issues

You name the disruption, the winemaking industry faced it, in spades.

Manufacturing Challenges and Best Practices

On the heels of our first Tomorrow broadcast event in late 2020, QAD hosted two more Tomorrow events in 2021 to break down the challenges and hone in on best practices across key capability areas in manufacturing.

In May, we focused on overcoming supply chain disruptions and improving supply chains and supplier relationships. With industry experts, we explored:

  • Challenges in strategic sourcing, managing supplier relationships and navigating disruptions in complex, global supply chains.
  • Best practices for overcoming supply chain challenges in the areas of supply chain planning, transportation management, quality, sourcing and supplier management.

We shared our Integrated Supplier Management Diagnostic tool designed to help manufacturers measure the current state of their supplier relationships and identify ways to optimize supply chains.

In December, we explored the innovative digital solutions manufacturers are adopting to improve operational performance, specifically:

  • Digitizing quality and industry compliance
  • Digitizing the shop floor
  • Automating material transfer
  • Building a digital foundation

We shared our Digital Manufacturing Diagnostic tool designed to help manufacturers measure the current state of their digital transformation efforts and identify strengths and weaknesses as well as changes that can be made now and over time.

Will Disruption Continue into 2022?

The short answer is, Yes. The magnitude and severity of future disruptions will obviously vary by a number of factors including industry, geographic location, etc. And many of last year’s disruptions were caused by unforeseen change, or forces outside of our control.

It’s important not to assume that major changes must be made immediately to try and tackle future disruption. Instead, start by looking at the big picture before attempting to identify and solve problems. Build a framework for the integration of better data, better decision making and better insights. This could mean changing your business model significantly, or entirely. Remember, micro-improvements from the bottom up will drive micro-efficiencies. It’s just a matter of time before you get to where you want to be.

Which were your biggest disruptions in 2021?

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