Manufacturing

Survive and Thrive

Articles

Article first published: Manufacturing Today Europe, March 2018

In an increasingly uncertain business environment – of which Brexit is the latest manifestation – manufacturers need to be able to adapt quickly to changing circumstances if they are to survive and thrive, writes Alex Clark, a subject matter expert and a contributor to the Framework for Business Agility at the Agile Business Consortium.

Depending on your viewpoint, Brexit brings either unwelcome additional challenges or a chance to embrace new opportunities – adopting Agile ways is relevant to both.

Monolithic manufacturing enterprises, churning out the same product, in the same way, year after year are a thing of the past, certainly in open marketplaces. Businesses in the UK and Europe have had to learn to be more innovative in their ways of working or see themselves be overtaken or undercut by more nimble rivals, either at home or overseas.

The sector is used to concepts such as lean manufacturing, continuous improvement through disciplines like Kaizen and the idea of engineers working iteratively to develop new products. Less well known, though, are the practices that underlie Agile business thinking.

Originally linked to software development in the 1990s, Agile evolved first into a project management framework and, more recently, into guidance that has implications for the whole of an organisation, from marketing and HR to budgeting and contracts.

One of the key principles at the heart of Agile is the importance of communication and engagement with all stakeholders – whether internal or external – and listening to what they say. As Brexit changes the landscape in which manufacturers operate, this is becoming more important than ever.

Consider two different scenarios. UK companies that want to continue to trade within the Single Market may decide to shift some or all of their manufacturing to mainland Europe to circumvent border controls. For some, this will be the first time their operations have been split across different countries and cultures; ensuring effective communications between the different sites will be crucial for future success. IT can help provide the means for sending information but it requires much greater effort to ensure that information is understood and acted upon. Businesses that look to new international markets post-Brexit will face similar challenges as they build new teams in South America, Africa and the Far East. Distance makes it even more important that communications are built on firm foundations, and in my experience across numerous industries this requires at least some face-to-face contact.

Uncertainty brings costs, and if these cannot be absorbed they will need to be passed on to the customer. Two factors can help mitigate this. Listening to what clients are saying and rapidly adapting product – with enhanced features – can justify a higher price. Manufacturers must embrace new technology to assist them with this, using 3D printing, for example, for fast prototyping to reduce the product lifecycle and get improved goods out of the factory more quickly.

Arguably, costs can also be reduced via outsourcing but a complex supply chain can be fraught with risk, and far from flexible. An early lesson I learnt during a major change management programme for a multi-national manufacturer was that it was not enough for the in-house teams to embrace Agile thinking; external suppliers also had to do so or they risked being the project’s weakest link.

This same project demonstrated the importance of having buy-in for the changes we were trying to achieve – improving product lifecycle management – from across the organisation, both geographically and hierarchically. Close communication within and between the different teams was also vital, as was ensuring management had oversight of what was going on.

Staff can often be the key to working in a flexible way and adapting to changing circumstances. Their hands-on experience of the daily realities a business faces means they have valuable insights and should – within parameters – be allowed to act upon them. Businesses that are willing to move on from traditional ‘command and control’ techniques, encourage a no-blame culture and empower their employees to take decisions can increase profitability and flexibility at virtually no additional cost.

Making the best of Brexit will also require businesses to think carefully about their priorities and to keep them under review. Correctly prioritising, blending and balancing a portfolio ensures an organisation’s appetite for change does not exceed its capacity to deliver. This approach – and the associated Agile Portfolio Management framework – emphasises the value of staying open to innovation by drawing in new ideas from across the company and evaluating these objectively on an ongoing basis.

In a similar vein, manufacturers must never rest on their laurels. Even when a new product is successful, it won’t be as good as it could possibly be: standing still is a recipe for disaster. Instead manufacturers must continuously look for ways to improve the products they make and how they make them. This is as true for a multi-national as it is for a niche engineering business. 

Stay Agile, keep moving, listen carefully and be ready to change – that way you can make a success of Brexit.

Biography

Alex Clark is a pragmatic Agile evangelist who has more than 20 years’ experience delivering Agile transformations, building and managing PMOs and running change portfolios. His guiding principle is always to learn from books and theories but apply the knowledge through common sense and an understanding of people and organisations. His passion for the subject is rooted in a conviction that Agile is not only a more efficient and effective way of delivering change but that it is also more fun.

Article first published: Manufacturing Today Europe, March 2018