How Adaptive Manufacturing Drives Success in Volatile Markets

Many manufacturers are locked in on a strategy for success that has served them well for years. But tried-and-true manufacturing strategies have been upended by unpredictable market demands and supply chains, rising costs, shipping delays and staffing shortfalls.

Growing volatility highlights the need for a new, adaptive manufacturing strategy that aligns with current market conditions. By embracing a more agile, contextually intelligent and flexible approach to shifting from one manufacturing strategy to another, manufacturers are better positioned to capitalize on opportunities and mitigate risks.

The success of any adaptive manufacturing strategy depends on getting engineering, product design, production planning and scheduling, and shop floor production teams—and the systems on which they rely—working together. CAD/CAM, PLM, ERP and MES solutions all have their own cadence and lexicon. Only by enabling these systems to share real-time data can manufacturing teams communicate and collaborate to pivot quickly as conditions change.

Let’s look at a few examples:

Using an alternative to material in short supply. As a whole, furniture and mattress manufacturers were caught off guard by severe foam shortages. However, companies with real-time access to customer orders via their ERP systems knew exactly what their exposure was in open orders. Some of these manufacturers pivoted production by having their CAD designer and PLM teams refine products with coil and fiber-based substitutes. Customers approved the designs, and manufacturers met delivery dates.

Rapidly starting new product lines. A plastics manufacturer serving the auto aftermarket  addressed growing demand for ventilator and respiratory components. CAD designers and engineers worked with its medical industry customers on CAD designs. They then sent them to toolmakers who created molds in five days by working two shifts. Within 10 days, the production line was up and running due to the synchronization and collaboration enabled by its CAD, ERP and MES solutions all sharing the same database.

Aligning materials and finished products pricing. Long-term, fixed-pricing contracts can ensure revenue flow and capacity utilization during stable economic times. However, manufacturers have seen costs rise two-fold for steel, three-fold for lumber and three-fold for polypropylene over the past year, making adjustable pricing critical. By using automated pricing in its ERP system, a distributor with a manufacturing arm updated customized customer pricing in two hours­—and the company maintained its margins. 

Prioritizing high-margin products. For years, auto manufacturers have added rich, computerized capabilities to all vehicle models. However, with the global microprocessor shortage, automakers are using manual dials and handles for entry-level models and reserving advanced electronics for higher-end, higher-profit vehicles. They also are using their ERP systems and EDI services to share real-time customer demand forecasts with chip suppliers to help them reduce uncertainty and invest in more production capacity.

An adaptive manufacturing strategy gets every team essential to a product’s success communicating and collaborating in real time. As a result, manufacturers can pivot faster to new products, gain greater visibility into and control over costs, and improve product quality. Far from being a short-term approach, the ability to put customers’ changing requirements first—while overcoming any supply chain, labor, cost, machinery and labor constraints that stand in the way—is the future of smart manufacturing.