The UK is reopening, and whilst it would be foolish to forecast what the future holds for the country or the economy one thing is certain: After a challenging spring and start to the summer all businesses are looking to boost their profitability in smart ways.
Many manufacturers may have just breathed a small sigh of relief as figures show that activity in the UK’s manufacturing sector grew narrowly in June as lockdown measures eased. Firms reported a slight increase in output following the large drop caused by the response to the pandemic. The economy isn’t simply returning to business as usual as it was pre-COVID-10, and manufacturers need to adapt and focus on margins, efficiency, and profitability for the here and now, and scenario plan for the year ahead.
Data and analytics will be key levers to profitability, particularly since analytics and AI have infiltrated the sector so thoroughly over the past decade. MarketsandMarkets has valued AI in the manufacturing sector at $1.1bn in 2020, and stated that it is likely to reach $16.7bon by 2026. Given the multiple and changing variables impacting on demand, production, supply, staffing and so on, solid scenario planning is a responsible way to map a way through uncertainty. Even though the economy isn’t returning to the pre-COVID-19 normal, businesses aren’t finding their way totally in the dark. For the last decade, data and analytics have supported the industry. With the advent of the IoT, cloud, and AI, manufacturers can now get ahead, understand the new normal, and adapt their organisations accordingly.
As simple as one, two, three
Manufacturers looking to move fast on an optimised path will want to take a structured approach to their data and analytical programme.
Whether it’s supply chain resiliency, demand forecasting, or inventory planning, a key focus will be on the use of analytics to plan for the differing scenarios companies might face around the changing economy. From sourcing alternate materials or services and suppliers, or reaching out to new markets and finding new customers, the prepared business will be faster and better fitted to new challenges where they know themselves, their capabilities, and their partners and customers better.
First, demand forecasting. Companies need to know what their customers want, where they want it, especially as that evolves. Create pinboards to summarise how COVID-19 had affected sales by channel, and to track and understand the orders and industries they would like to continue or to grow as countries reopen at different rates. Using analytics to inform re-opening strategies by analysing trends across different sales forecasting scenarios will be key.
As economies re-open in phases it is critical for business users to make data-backed decisions about sales planning and inventory ordering by channel. Generating and comparing different sales forecasts such as a non-COVID-19 forecast, an optimistic and a cautious forecast can help firms understand predicted sales trends and when they might expect a return to relative normalcy in demand across channels.
Second, know the inventory to meet that need. What do they have, where is it, and do they have enough to serve demand as it changes?
Third, they have to know what’s going on with suppliers. There is the overriding need to ensure they have the inventory needed to meet demand. For those with multiple sites, it’s important to discover the readiness at each and, if needed, use their forecast data to reveal alternative suppliers, amend staffing schedules, and allow them to diversify or shift gears and meet demand to keep production on track. Public health data may provide the basis for insights on the impact of COVID-19 on production ability and the impact on the workforce given the respective numbers of cases in those areas.
Put it all together
With AI-powered search analytics it’s easy for all levels of worker to explore, communicate, and plan for a variety of recovery scenarios months in advance of the business need – and to remain agile as factors change.
A recent article by emarketeer.com discusses that marketers have significantly increased their focus on data and analysis, with a view to providing them the ability to conduct analysis themselves as opposed to a reliance upon data scientists, as hiring more data scientists to address expanding requirements becomes cost prohibitive.
Ultimately, staff with the key knowledge and expertise need to be given the analytical solutions that they need to maximise profitability at pace. Given the variety of confounding variables the virus has thrown into the mix, hard data allied to this experience is the only sure weapon to ensure manufacturers can battle the stormy seas of the economy and make it through to safer waters.