What are some of the challenges that The COVID-19 pandemic has presented for manufacturing industry? Please elaborate.
Stanley Black & Decker has been focused on delivering against three key priorities throughout the pandemic: ensuring the safety and health of our employees, continuing to serve our customers and maintaining our financial strength, and doing our part to help communities and governments mitigate the effects of the virus. These priorities align with the challenges that many manufacturing companies have faced over the past 12 months.
The most important of these challenges was protecting employees and keeping them safe as well as their customers, families, and communities. At Stanley Black & Decker, we took immediate action even before the pandemic was in full force. In January 2020, we anticipated that demand for PPE would increase significantly in the weeks and months to come. The safety of our employees is our top priority, and we deemed it essential to ensure that we had an adequate supply of PPE to protect our manufacturing workforce. In mid-January, we made the decision to pre-emptively buy 100,000 face masks from a local supplier in China to bolster our existing supply. This additional supply helped us when PPE became virtually impossible to acquire. It also enabled us to provide masks to employees for their families to help mitigate community spread which turned out to be a greater risk.
We worked diligently to re-visit our supply chain strategy and build more agility and flexibility, which enabled us to better manage the dynamics caused by the pandemic
Second, in late January, we encouraged all our employees to return early from their Chinese New Year travels. We were expecting the government to announce nationwide lockdowns before the end of the holiday, and once the lockdown was official, employees who weren’t already back in the region before the lockdown would not be able to come to work for many weeks or even months. Around 1,000 employees returned early, which allowed us to quickly restart our operations in early February, once the government gave us permission to do so.
In the following months, we took similar action in locations around the world, which provided highly effective in protecting our employees. In fact, our safety measures meet and often significantly exceed those required. They include temperature screenings, social distancing measures, continuous cleaning and sanitation, virtual work for employees who are able to do so, and more. These measures helped us navigate a second challenge: maintaining business continuity. Nearly 600 of our vendors and suppliers were also impacted by the pandemic, revealing single-source dependencies across our supply chain.
The pandemic caused a perfect storm of disruption to supply first, then to demand, and finally to working practices starting in China and spreading across the globe. How will this propel changes in the manufacturing industry?
The pandemic has led to the acceleration of two trends: supply chain flexibility and adopting best-in-class Industry 4.0 solutions. Technologies such as IOT, artificial intelligence and machine learning allow us to apply predictive analytics to more effectively track supply and demand coupled with flexible manufacturing such as mobile robots and cooperative robotics to improve productivity and agility in plants and distribution centers.
Stanley Black & Decker has always been focused on a “make where we sell” strategy, meaning manufacture and sell products in the same market, sourcing materials and components as close to the manufacturing location as possible. During the pandemic, we re-visited our supply chain strategy to reduce reliance on single vendors and to build a more resilient supply chain. This strategy is helping to lower production lead times, reduce costs, and mitigate geopolitical and currency risk, while facilitating major improvements in our carbon footprint. For example, our objective is to be carbon positive and zero waste to landfill by 2030. Already more than 60 of our manufacturing and distribution sites are zero waste to landfill with a target of 50 percent of our manufacturing and distribution centers by 2021.
Many manufacturers also learned first-hand how Industry 4.0 technologies can help keep their operations online in difficult situations. For example, Stanley Black & Decker has already rolled out 50 cobots (or collaborative robots) across its manufacturing plants, which are helping to save employees time on repetitive tasks and increase overall productivity. For example, these technologies helped our plant in Fort Mill, South Carolina, stay open during the height of the coronavirus outbreak, enabling us to take advantage of a surge in demand for handheld power tools during the summer.
A manufacturing and supply chain ecosystem appropriate for a post pandemic world has several attributes which have perhaps not been given the attention they deserve in the past. Can you please let us know what can be these attributes?
The most important manufacturing and supply chain ecosystem attributes are agility, speed, and anti-fragility. Agility requires a resilient supply chain that doesn’t rely too heavily on a single vendor and that allows for efficient distribution and transport of materials and products. Speed refers to a manufacturers’ ability to ramp up production and adjust in the face of macroeconomic headwinds. Anti-fragility is a concept that we use to express our ambition to move beyond resilience to become stronger with every stressor that affects the system. It’s more of a mindset that ensures we learn from moments of stress on the supply chain—be it related to resources, cost, time, etc. An ability to absorb learnings and apply them in practice is an integral attribute for successful manufacturers moving forward.
It may be a perfect storm of disruption that has led us to the realization that digital transformation is essential, but there is also a perfect storm of technical building blocks that have come together to make the ideals of the smart factory real and attainable. Your views on this.
The era of smart manufacturing is here. There are a range of technologies that are now able to be used at scale, including the industrial internet of things, cooperative and mobile robots, predictive analytics, augmented reality, additive manufacturing, and more. Together, these technologies can be used to unlock the potential of a smart manufacturing ecosystem. For example, consider digital twins. This technology allows us to create a virtual plant, machine, or product and design it all digitally before it’s created physically. We’re able to simulate an experience using a digital thread of how it will all work together. This has the potential to save millions of dollars in material investments alone.
But, while these technologies offer great promise, it’s important to recognize that they are not meant to replace humans. On the contrary, they should be used to unlock human potential and create opportunities for a modern workforce. Consider artificial intelligence, for example. A better way to frame AI is to call it Augmented Intelligence (AI), as it can be used to make a person more effective at their role, more efficient, or more productive. Our goal is to use this technology to take humans away from the dull, dirty, dangerous jobs and put them into the jobs that require creativity and foresight – skills that robots lack.
What would be your piece of advice for your fellow peers/colleagues?
My advice would be to embrace Industry 4.0 and the latest in advanced manufacturing strategies. It’s never too late to start your journey and this space will only grow in importance. Experts predict that Industry 4.0 will eventually be a $4 trillion market.
Smart manufacturing can deliver significant safety and sustainability benefits. Employees can work safer and more efficiently with cobots and advanced analytics. Companies can save on operating, transportation, and other logistics costs. Operations and manufacturing can be more agile and responsive to changing consumer demands. This is a marathon and not a sprint. Curiosity, life-long learning, and continuous improvement will be key ingredients to winning. The future is here now.