Manufacturers are at a pivotal juncture. Still navigating the long-term impacts of the pandemic, they face geopolitical disruption and a growing emphasis on sustainability and human-centricity. Are manufacturers ready to respond to these changes?
This was the overarching question discussed at the Power of Unified Manufacturing event last week, CGI's first global executive event for the manufacturing community. The event was attended by close to 200 people from across four continents and brought together leaders from various manufacturing sectors, academia and our technology partners to explore some of the industry's most critical issues. In this article, I share some of the event's key highlights.
The event began with an all-women panel session comprising Stefanie Naujoks, IDC, CGI's Annette Trenz, Nicole Zethelius and myself. We discussed some of the key macro trends shaping the future—from evolving geopolitical uncertainties to climate change to supply chain trends and the role of technology in driving profound change for the industry.
With shifting trade flows, we have entered a global race in which the control of technology standards is becoming paramount. Those who innovate and take an active role in developing technology standards will dominate tomorrow's markets. This is especially true when it comes to meeting new sustainability regulations and standards and the standards around how companies use and share data.
Exploring real-life use cases for data sharing
We touched upon Gaia-X, a European initiative created to support data sharing in a trusted and secure environment while ensuring data sovereignty for its participants. By pooling data together, new opportunities arise for participants. We also discussed the Catena-X use case from the automotive industry during one of the networking sessions. Catena-X illustrates how data standards form a common language to enable data exchange for collaboration while ensuring data sovereignty through a federated secure data structure.
Exploring how pooled data streams can help generate new revenue was also discussed more deeply in a panel session with Michelin and Microsoft. The ability to pool and share data can help create a circular economy. By rethinking traditional business models, manufacturers are in a better position to reuse materials and work together to reduce waste and increase revenues.
Transitioning to sustainable manufacturing
Notably, sustainability was a topic that resonated in every conversation. Today, most manufacturers have made climate pledges and are looking for ways to innovate and transform how they produce goods to meet their environmental sustainability targets and deliver on their brand promises. As Stefanie noted, "Manufacturers used to design products based on cost and performance as a key selling factor. Going forward, it will be about sustainability and recyclability."
Nicole said that the opportunity here is to "shift from [viewing sustainability as a] regulatory burden to turning it into a competitive advantage." She walked through upcoming legislation that will impact manufacturing and highlighted data's role as an enabler in helping manufacturers make this transition. Collecting environment, social and governance (ESG) data along their entire value chain will enable manufacturers to measure, manage and report on their stated goals. It will also help them drive scalable change, mitigate risks and achieve climate pledges.
Additive manufacturing is likely to play a critical role in transitioning to sustainable manufacturing. Reports indicate that additive manufacturing can help reduce industrial global energy demand up to 20% by 2030. However, overall equipment effectiveness (OEE) must be as accurate as possible for additive manufacturing to work as needed, and this, in turn, requires accurate data models and algorithms.
At the same time, clean energy will be imperative to making a successful transition. Stefan Savonen, Head of Climate at LKAB and Michael Nilsson joined CGI's Robert Ylitalo and Peter Warren to discuss in depth how manufacturers can adopt clean energies and the role of hydrogen. Tackling the energy transition is a topic that will undoubtedly grow significantly in importance for manufacturers in the next few years.
Reconfiguring supply chains for resilience
Sustainability is linked intrinsically to the supply chain, and the ongoing geopolitical crisis has brought supply chain management back under the spotlight. "The pandemic has demonstrated the fragility of our supply chains, and Russia's invasion of Ukraine has demonstrated global dependencies again. We all know that it doesn't only take a pandemic or a war to interrupt supply chains; sometimes, it just takes a cargo ship stuck in the Suez channel," noted Annette.
While there is talk of reconfiguring supply chains, the overall sentiment is that this will be more of a "tweaking" exercise rather than a complete shift to deglobalize supply chains. "Global supply chains have become so interdependent that a widespread return to total economic self-sufficiency is unlikely," said Annette.
IDC's Stefanie noted that some manufacturers are stockpiling reserves, but local sourcing is unlikely to gain traction due to "skyrocketing energy prices." The consensus, however, is that resilient supply chains will be key. Professor Ted Stank of the Global Supply Chain Institute and John W Kennedy, CEO of NJMEP, explored the challenges in creating resilient supply chains with CGI's Pascal Zammit, Dilip Nair and Lionel Descombes. The common denominator to emerge again was data.
Leveraging the power of data securely
Maintaining organizational resilience in an enterprise has become complex, with multiple benchmarks, including technical, social, economic, and environmental aspects. We repeatedly heard how data can help manufacturers meet these requirements. Data offers insight, awareness and the ability to track, test and optimize manufacturing processes. Nathan Eskue, Professor of AI in Manufacturing at Delft University and Alexander Daehne of SAS joined CGI's Marcel Mourits to discuss the opportunities and benefits that machine learning, data analytics and artificial intelligence offer manufacturers.
A crucial aspect of becoming a data-driven organization is incorporating IoT and cloud-based approaches, making manufacturers more vulnerable to cyberattacks. Ion Russu, COO of Butachimie, shared the company's transition to operating a digital factory securely—one that has reduced their CO2 emission by 15% without a drop in production and enabled them to pivot to remote working within three weeks.
Over the next few weeks, we'll share in-depth insights gathered from the industry-shaping dialogue at the event. In the meantime, I invite you to watch the recordings: