Digital Transformation in Manufacturing and Supply Chain Post-COVID

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24 April 2020 – Makati Business Club held the third session of its digital series with  Boston Consulting Group, focusing on how digital can and will transform manufacturing and supply chains post COVID-19.

The session featured BCG managing directors Anthony Oundijian in Manila, Pepe Rodriguez in New Jersey, and Ian Colotla in Hong Kong. The discussion covered the impact of COVID-19 in operations, learnings from China, digital imperatives for operations, and key considerations in building capabilities.

COVID-19 has put manufacturing operations and supply chains worldwide into a coma. 

For Ian Colotla, preparation is key to have an integrated restart. He said that having a dedicated start-up team, protecting workers, ensuring the availability of materials, synchronizing supply chains, and “keeping it simple” are key factors to ensure a faster and stable output. He discussed how China was able to resume major industrial operations with zero internal infections through preparation and the use of digital technology. He also said that digitally prepared companies were able to cope with pandemic and adjust to rapid start up.

Pepe Rodriguez discussed the role of digitization in operations. He said that transforming digitally is one of the smart moves to preempt adversity in business. “There’s plenty of opportunity to bring digital in operations to enable things such as better operation visibility, the ability to extract insights, to leverage those insights to manage operations better, and the ability to automate,” he said. 

As an example, he discussed how a European steel company that experienced a sharp decline in demand due to the outbreak, was able to use their digital capability to respond to challenges. Leveraging a “digital twin” — or the digital representation of their assets and the flow of materials between assets — enabled the company to make more rapid supply and operations decisions based on given scenarios.

Another example given is the challenge for a med-tech company to increase production of ventilators to supply demand across the globe. Through digitization, the company could forecast supply bottlenecks, manage priority suppliers through smart alert, and monitor supply status. 

Because of the pandemic, change has become the new normal. We are now facing the new reality of contactless transactions, automation processes, and digitizing operations. Injecting digitization in the process of manufacturing and supply chain companies can fully seize their potential.