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Here’s How Manufacturers Can Dig Themselves Out Of “Crisis Mode”

Manufacturers could get a pass if they were operating in a panic during 2020, when the pandemic turned the world upside down. COVID-19 surges throughout 2021 and Russia’s invasion of Ukraine earlier this year have certainly done nothing to settle nerves.

The natural response to these supply chain-altering events is often to batten down the hatches, patch up the holes, and do whatever it takes to get through it. But the cold, hard reality is that the core issues our industry is grappling with aren’t going away any time soon. Which means it’s time for manufacturers to come to a place of acceptance—and get out of crisis mode.

From my perch working with manufacturers across Northeast Ohio, I’ve seen far too many scrambling to ride out the storm and make things work without substantially reworking their systems or processes. The result? Employees are operating at a constant sprint, putting out dozens of emergencies each day. This leads to burnout, and when all the fires can’t be extinguished, it also means client expectations are not being met.

So, I got together with MAGNET Vice President of Operations Michael O’Donnell, and we came up with these key steps manufacturers can take to move past crisis.

Step one: Accept that uncertainty is part of the game

Crisis mode is definitionally emotional. We feel stressed. We feel anxious. Or at the very least, we feel pressure. And even if you as the leader don’t feel this, if you haven’t worked really hard to help your staff calm down, they probably still feel the panic.

The first step is to respect that rightly or wrongly, emotions have been high and trigger sensitive for two and a half years now. And that’s no longer sustainable. We have to bring down the emotions, reduce the pressure and find a new status quo. The key to doing this is to accept that the issues we face today are long-term issues that require lasting solutions. No more band aids.

As leaders, once we reset our mindsets, we then have to help our employees get there. And the fastest way to do that is with our actions. We must stop the treadmill and the firefighting. Keeping this constant pace and pressure will only crash our companies through burnout, attrition, and quality degradation. This shift requires open and honest conversations about what the future could hold with the people you trust, strategic scenario planning to shift the horizon back to a new normal, and then transparently sharing what’s next with the organization – even when you don’t have all the answers. We must accept that some of the disruptions we are experiencing – like supply chain and procurement difficulties – are here to stay for a long while.

That said, acceptance doesn’t mean that we don’t keep trying to make things better, more effective, or more foolproof to future disruption – it just means that emotionally we stop thinking of everything in short-term panic mode, start accepting more operational uncertainty and doing the long-term thinking and planning that is so critical to success.

Step two: Solve for the cultural fallout, i.e., the “people panic.”

When it comes to talent, the Great Resignation has taken the decades old manufacturing talent crisis to new highs. I definitely see manufacturers operating in “crisis mode” – scrambling to do whatever it takes to bring new hires in the door. And make no mistake: In an environment in which there are as many as two job openings for every person actively on the search, figuring out the right mix of compensation and benefits is crucial. But companies are too often not looking beyond that. What about keeping these employees out of the revolving door?

When you’re operating in crisis, it’s hard to see how pivotal a role culture plays in your overall talent equation. But employee sentiment is evolving, and it’s on us to adapt. That’s the long-term piece that we need to focus on next.

Manufacturers, for years, have been singularly focused on the work performance of their employees. Come to work, do your job, collect your check and have security into the future. Start showing up late, miss a couple of shifts, or pick the wrong time to be overtaken by stress, and it’s likely that you’ll be systematically shown the door.

But a funny thing has happened in our post-COVID world – the employer-employee dynamic has dramatically shifted. Employees are reassessing the roles that work and workplaces have in their lives, leading to new workplace needs and demands or to leaving the workplace altogether. This gives leverage to the workforce and creates an environment in which you simply must meet more of the wants and demands of your employees. That means helping out in ways that haven’t been historically in the purview of an employer—things like subsidizing an employee’s way to work when their car breaks down, creative scheduling to work around childcare schedules, or finding ways to help employees manage stress. If you don’t, another employer will.

Bottom line: it’s easy to treat folks as expendable. It’s much harder to work with them when they’re struggling and get them back on their feet. Offering a signing bonus is easy. Building an amazing workplace where people want to stay for decades – that’s the hard work. But at this stage of the game, we need it all. And I’m fairly certain you will find that embracing your employees for who they are—human beings, susceptible to the ups and downs of life who crave a place to feel connected, accepted, and inspired—will help you regain some of that organizational loyalty that is increasingly hard to come by.

Step three: Solve for the business side, i.e., not just patching holes but building a better boat.

The lean methodology manufacturers have instituted and perfected over the last two or three decades has its obvious advantages. Rather than loaded shelves of stock that far exceed demand during any given week, manufacturers can leverage data to get a reliable understanding of how much stock they’ll need any given week—and plan accordingly.

Of course, that method falls apart during times of crisis, when certain supply lines are shut off and demand for other products suddenly shoots through the roof. No manufacturer wants to go back to the costly ways of old, but it’s clear our system needs more built-in surge capacity.

“Let’s say we wanted to have excess capacity in an auto factory—how could you do that?” says O’Donnell. “One way is you build another factory and stick it next to the existing one, which is pretty expensive.” O’Donnell estimates that given the high price of the factory and the fact it would largely exist only to handle surges in demand, the manufacturer would be hard pressed to ever break even on the investment.

But there’s promise, O’Donnell says, in the other route: using technology to streamline your existing operations such that you can build in more flex capacity through robotics. “The answer is that we have to use technology—Industry 4.0 technologies like collaborative robots and machine monitoring—to help increase our surge capacities and increase our efficiencies so that we have excess capacity at no extra cost.” That will involve training up our people to higher-tech jobs, as well.

Sound pricey? Here’s the good news: you don’t have to do it all at once. By batching technology upgrades—doing, say, 20% of your manufacturing floor per year over five years—you’ll see your company make incremental efficiency gains without the heavy price tag. Some manufacturers have very successfully embraced advanced production technologies (think cobots, automation, big data, 3D printing) to help solve the disruptions of the past two years. But many others have frozen technology investments and they’re falling further behind by the day. Industry 4.0 investments aren’t an option – they’re now table stakes. If you’ve been paralyzed by the pandemic, now is the time to get moving again before it’s too late to catch up to your competition.

Take a Long-Term View

If you’re fortunate enough to work with a dedicated team in a sector that’s been more stable, it’s possible you’ve been able to make it through the challenges of the last two years relatively unscathed. But manufacturers who continue to believe their staff can burn the candle at both ends to work around systemic problems within their businesses are in for a rapidly approaching reckoning. Instead, getting ahead of burn out and talent shortages, while embracing new technology, can help manufacturers rethink and rebuild their businesses so they’re optimized for the new normal and able to ride out the crises ahead without slipping back into crisis mode.