Four challenges that manufacturing companies need to address now

July 19, 2023

Whether it’s a pandemic, geopolitical unrest or massively increased costs, the consequences of the last few years of crisis have been more severe for the manufacturing industry than for some other sectors. Companies must therefore find ways to integrate resilience, flexibility and security into their processes and business operations. Saša Petrović, Director of Account Technology Strategist, DACH Industry at Citrix, a business unit of the Cloud Software Group, uses four key challenges to show what is needed to achieve this and what role IT solutions play in this.

1. interrupted supply chains

Probably the biggest challenge for manufacturing companies is the continued disrupted supply chains. The trade war between China and the US, the blockade of the Suez Canal or the COVID-19 pandemic have highlighted how vulnerable supply chains are to problems. Yet in a Capgemini study, only 15 per cent of companies surveyed worldwide say they are well prepared for the shift in global supply chains.

But they must not take any more time with this, but minimise their dependence on affected trade routes as quickly as possible. Partnering with smaller organisations or start-ups can be one way to increase agility, even if it may mean higher costs. In return, manufacturing companies can save elsewhere by automating phases of supply chains such as production, warehousing or transport of materials and goods. They can also use the cloud to scale and adapt to changing requirements. In addition, manufacturing companies will need intelligence analytics tools to continuously monitor their supply chains and identify risks early. This can reduce downtime and ensure business continuity.

2 Cybersecurity threats

One in ten German companies recorded an IT security incident in the last twelve months, and 28 per cent consider an attack within the next year to be realistic, according to the results of the TÜV cybersecurity study. In the manufacturing industry, however, not even three out of five companies attach an important role to their cybersecurity.

But the danger is real and the threats are becoming more complex. Manufacturing companies therefore need to respond in two ways. Firstly, they need to invest in concepts such as zero trust, cloud services and managed security services to best protect their networks, devices, machines and plants.

This also minimises risks posed by partners and suppliers along the supply chains. These are often connected to certain internal systems, which is why cybercriminals can use them as a gateway to gain access. On the other hand, they also need to raise awareness of security risks among their workforce. Criminals like to exploit the weakest link in the chain, and in a company that is usually its own employees.

3 Digital transformation

The manufacturing industry is one of the most complex industries due to its many different sub-sectors, dependencies and employee groups. The digital transformation is correspondingly challenging and demanding. Manufacturing companies are increasingly competing with technology providers that are at home in the digital world.

To remain competitive, manufacturers must therefore accelerate their digitalisation and first modernise their infrastructure. This means that legacy applications must be replaced by new, modern applications. Only then will they be able to truly exploit the potential of new technologies such as digital twins, the Internet of Things or 3D printing and become digital-first companies. Digital technologies will then no longer be enablers of digital transformation, but central components at all levels of operations.

4. Become and act greener

Due to public pressure and European legislation, manufacturing companies now also have to define sustainability goals and find ways to achieve them. However, sustainability is also an important growth factor as awareness of the issue grows in society. In this context, consumers, not least due to the Supply Chain Act, no longer only pay attention to the end product, but also to the entire value chain. Therefore, manufacturing companies should not only align their supply chains with this aspect, but also use tools to measure and optimise their sustainability initiatives. With automation, digital twins, the digitalisation of processes or even hybrid working models, the manufacturing industry can significantly reduce its carbon footprint.

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