Content sponsored by AutoBio Reduction, Bastian Solutions, and Conexus Indiana
Manufacturing & Logistics
Pace of change quickens in manufacturing, logistics
The leaders of Conexus Indiana, Bastian Solutions and AutoBio Reduction talk about how this unusual year and resulting changes in consumer habits have accelerated and altered trends in manufacturing automation and supply chain logistics.
How has the global pandemic affected previously laid plans for warehousing and logistics?
GREG CONNER: The pandemic has caused a lot of companies to reevaluate their supply chain strategies. Microfulfillment and ecommerce were already seeing tremendous growth, and what we are seeing is a further acceleration in both sectors.
DIANA BRUGH: Now that we see what life during a pandemic looks like, we have to adjust previously laid plans. Autonomous robotic systems, like our autonomous disinfectant robot UVNinja, will become an essential part of helping supply chains thrive and minimizing employees’ exposure to biological hazards and each other.
MARK HOWELL: Manufacturers and logistics providers have experienced a great deal of disruption in their operations. Companies that were running flat-out at capacity before the disruption, might not have seen the need to innovate nor had the time to think about it. But the industry is quickly transforming.
How has COVID-19 affected the way you approach your work and your employees?
MARK HOWELL: The pandemic has given me a much greater appreciation for how much can be accomplished remotely. The Conexus Indiana team—and more broadly the Central Indiana Corporate Partnership (CICP) team—of which I am a part was able to very quickly transition to a fully remote environment in the wake of this crisis. The second thing that has been reinforced to me as a leader is how important empathy is. Recognizing employees’ humanity first and giving each of them the flexibility and respect they need to complete their work within a new set of boundaries has allowed us to continue functioning at a high level.
GREG CONNER: Our employees are the heart and soul of Bastian Solutions and are what has driven the growth and success of our company for 68 years. We’re doing everything we can to ensure their health and safety. I never thought we would all be wearing masks and no longer shaking hands. But our team continues to come together for whatever is required to take care of our customers.
DIANA BRUGH: After having a family member pass due to complications from COVID-19, my drive to provide solutions that help keep both my immediate and work families safe has grown. Our team’s commitment to developing solutions that bring peace of mind by leveraging autonomous technology has been amplified.
Do you foresee the boom in the ecommerce market continuing or leveling off once the pandemic subsides? How can companies prepare for either scenario?
DIANA BRUGH: Once the pandemic comes to an end our new normal will likely include more ecommerce as part of an overall hybrid system. Companies will need to focus on having an effective online presence, vetting distribution channels which are innovative in their own facilities to ensure a steady supply of goods and services.
MARK HOWELL: Many ecommerce companies are hopeful they can keep the customers they’ve gained. The uncertainty is mainly surrounding the holiday period and whether there will be an increase in order volume above what the pandemic has generated so far. If ecommerce levels increase at typical annual levels it will put stress on all fulfillment operations. The pandemic has also highlighted the need for retailers to develop a direct sales channel to their customers.
GREG CONNER: The pandemic has introduced millions of new shoppers to the many benefits of online ordering and fulfillment. New online shoppers are not likely to completely return to their previous buying habits. Most companies are planning for increased growth in the ecommerce sector and modeling the necessary changes to their supply chain to keep up with demand.
As we approach a busy season for most retailers, will facilities that are not adapting for social distancing be at risk for major downtime?
GREG CONNER: This is a major concern for many companies. Just as we have seen in the meat-packing industry, large numbers of employees can be infected with the virus very quickly. I believe what we’ve learned about the virus will help companies implement best practices to reduce this potential. Those that don’t enact safe practices will be at great risk for downtime.
DIANA BRUGH: While social distancing is vital to slowing the spread of COVID, it is important for companies to innovate and implement solutions like the UVNinja. New technologies can help businesses make sure they are providing a safer space for consumers.
MARK HOWELL: The biggest risk to most distribution operations is a COVID outbreak that would force a significant part of their workforce to be unable to work. Many fulfillment and distribution operations have implemented strict safety measures or are operating more shifts with reduced headcounts and ensuring that steps are being taken for appropriate contact tracing.
How can we best advance Indiana’s competitiveness in manufacturing and logistics?
MARK HOWELL: The advanced manufacturing and logistics industries have continually re-invented themselves to increase productivity, efficiency and quality. Now we are on the cusp of the next Industrial Revolution—commonly referred to as Industry 4.0—which uses technology, data and new processes to transform all aspects of making and moving products. But there is no one-size-fits-all approach to adopting new technologies—such as cloud computing, sensor technology and additive manufacturing. Indiana companies are at different points along the adoption curve. Hoosier manufacturers must leverage technology and automation and have a strategy in place to help them succeed. At the same time, Indiana must invest in its talent to compete in an Industry 4.0 environment.
GREG CONNER: Indiana’s location, low cost of living and attractive workforce make it a logical place for both manufacturing and logistics. Universities such as Purdue and Rose-Hulman continue to turnout some of the best and brightest engineers. Partnerships with these institutions in the fields of automation and business intelligence can help attract companies to our great state and retain those that are already here.
DIANA BRUGH: Indiana has always been at the forefront of innovation. In manufacturing, Hoosiers can contribute to this trend by making sure we are prepared for future challenges by finding ways to integrate new technologies into current manufacturing and logistic processes to make businesses more efficient.
What are critical considerations when making decisions regarding Smart Manufacturing and Logistics investments?
DIANA BRUGH: As businesses turn to Smart Manufacturing, it is important to consider cohesiveness between new incoming systems and systems already in place. Robots enhance a business’ effectiveness and productivity. Also, we’re experiencing an entire cultural shift in communication. Creative Smart manufacturing solutions ensure the optimization of systems to perform rapid communication using technologies such as sensors, ‘cloud’ storage and retrieval, apps and automated alerts.
MARK HOWELL: The decision to invest in Smart Manufacturing is highly dependent upon each business and where they are in their digital transformation. They can’t and shouldn’t do it all at once. Companies that are just starting their digital transformation should consider starting with the biggest impact opportunity—something that can show early success and help justify the next step. Companies also should develop a digital roadmap—one that is forward-thinking but not too detailed—leaving room for the inevitable detours that will be needed and worth taking.
GREG CONNER: Critical considerations include availability and cost of labor, availability of land, economic incentives and geographic location.
What are the primary motivators driving companies to innovate?
GREG CONNER: The two biggest factors we observe that drive companies to innovate are labor savings and productivity gains. Automation is required to meet the delivery expectations that consumers are demanding.
DIANA BRUGH: Innovation can be driven by competition, lack of available or skilled workforce, system inefficiencies, business optimization, and the impact of a global supply chain interruption.
MARK HOWELL: A recent study by Conexus Indiana, in partnership with the Indiana University Kelley School of Business Center for Excellence in Manufacturing, showed that companies are adopting—or are considering adopting—new technologies to enhance and optimize workforce productivity, eliminate and reduce errors and improve customer experience.
What are the barriers to technology adoption for Indiana manufacturers and logistics operations?
MARK HOWELL: Indiana has a mature, well established industrial base. For these companies, it’s often much harder to modernize and leverage new technologies when it involves retrofitting legacy equipment. It’s not impossible; there’s just complexity to it. For smaller companies, budget restrictions are most often cited as the major obstacle to technology adoption. Companies may not have budgeted for digital transformation because they may be unaware of how quickly some technologies are coming to market.
GREG CONNER: The unknowns of COVID are the biggest barriers to automation right now. Although many companies know that automation is the right step for their operations, economic uncertainty is holding a lot of people back.
DIANA BRUGH: As the workforce ages, and the speed at which technology evolves accelerates, it is critical for businesses to leverage partnerships. Costs to adopt automated and cutting-edge manufacturing technologies can be expensive, but a good technology partner like Brugh Industrial Engineering can help strengthen the internal team’s capabilities.
How is the Hoosier workforce being affected by trends in technology adoption and what can workers expect in the coming years?
DIANA BRUGH: As repetitive and unsafe jobs continue to be automated, there is a concern about loss of jobs. The reality is that most businesses don’t eliminate employees when processes are automated. Team members are typically elevated to more technical or skilled positions, creating more opportunity for higher paying, skilled positions.
MARK HOWELL: Work routines will become less repetitive, and more interesting, diversified and productive. Machines are not wholesale replacing workers, but workers’ jobs are certainly changing and they will continue to evolve. There likely will remain a very high reliance on human-machine interactions. Those who are eager to pick up new skills will likely have a bright future.
GREG CONNER: Hoosier workers should be excited about trends in technology. Advancements in technology are only going to draw more companies to our state. Those advancements will require a more highly skilled workforce, which will drive up compensation.
What funding sources are available to help manufacturers modernize operations?
MARK HOWELL: The newly launched Manufacturing Readiness Grants, which are in partnership with the IEDC and Conexus Indiana, and part of the state’s Economic Activity Stabilization & Enhancement program, are specifically targeted for this purpose. The program provides matching grants of up to $200,000 to companies committing to modernizing their operations or integrating smart technologies and processes to improve capacity, or to companies investing in health care manufacturing technology supporting critical COVID-19 response efforts.
How soon do you think last-mile robot couriers will become commonplace?
GREG CONNER: We are seeing some of this with robotic couriers, such as the food and drink delivery bots at Purdue. However, I believe we are still a few years away from this becoming commonplace. There is a lot of focus on robotic automation within the distribution center. What is learned from internal automation will be a catalyst for last-mile autonomous delivery.
DIANA BRUGH: Last-mile robot couriers should be expected to become commonplace sooner than later. The technology behind autonomous equipment, such as the UVNinja, has continued to develop from the industrial/manufacturing sector. Within the next few years, as refinements in sensor technologies and artificial intelligence are implemented, the use of last-mile robot couriers and similar technologies will become another common tool used to enhance our daily lives.
MARK HOWELL: The technology exists today and is being tested, but the biggest impediment to implementation is regulation. Local ordinances, state laws and in some cases federal regulations will need to be updated to accommodate this new technology.
Reshoring of manufacturing facilities has been a trending topic for a few years but has had a recent resurgence due to the pandemic. What trends are you seeing, and do you feel reshoring is critical?
MARK HOWELL: The pandemic certainly made more firms consider the value of reshoring—or “near shoring”—and what they could be doing differently with their supply chains. A recent survey showed that more than 64% of manufacturers were likely to bring production and sourcing back to North America. One of the most common reshoring trends is a China +1 model, where a manufacturer identifies a secondary supplier outside of China.
GREG CONNER: This is a big topic driven by the pandemic. Our reliance upon foreign manufacturing was exposed as we saw a significant shortage of raw materials and finished goods. While many companies are seriously talking about bringing at least a portion of their manufacturing operations back to the US, most companies we work with are immediately increasing safety stock inventories. This will continue to increase demand for warehousing space.
DIANA BRUGH: In the development of the UVNinja, our team took a number of factors into consideration when selecting suppliers and products. It was important to us to utilize state-of-the-art, trusted products, however it was also important that we support local companies. We recognized the need to source new and innovative technologies from around the globe, but we worked very hard to support other companies like ourselves in the US.
What are the pandemic’s long-term impacts to your industry?
DIANA BRUGH: The COVID pandemic has shown many businesses how exposed their operations are to a loss in labor due to either reduced workforce, remote operations, or altered workflows. For many, the pandemic has increased the desire to innovate and ensure their continued operation using new technologies like the UVNinja to autonomously disinfect work spaces.
MARK HOWELL: The pandemic will have multiple positive and long-term impacts on manufacturing and logistics. One will be to accelerate technology adoption, as well as motivate reshoring, which will create capital investment, generate new jobs and increase wage rates. Another will be the greater sense of appreciation the public has for products made and moved in the US.
GREG CONNER: If I had a crystal ball, I believe what it would show is that our industry will grow at an even more accelerated pace for the foreseeable future as companies try to keep up with growing demand. Automation will be required for companies to compete in the post-COVID world.