Sustaining Crisis Innovation by Maintaining Flexibility

By mid-February, the United States was recovering from several crises, large and small. The last two years have been all but defined by the COVID-19 pandemic and as a series of cascading and incidental crises—supply chain chaos and labor shortages caused by the pandemic, and severe weather events totally independent of it. But with perhaps the largest of these crises potentially coming to a close in the coming months (knock on wood), what will manufacturers take from the critical period just past?

Paul Miller, a principal analyst with Forrester Research Limited, predicts that many won’t take much from their experiences. In a interview with IndustryWeek, Miller discussed Forrester’s predictions for what 2022 might look like for the manufacturing sector and what post-COVID might (eventually) mean for manufacturers.

Some of its predictions are already coming true. At press time, the CHIPs Act has just passed the House of Representatives and has moved into conference—a part of the report’s prediction that 2022 will hold opportunity for manufacturers well-placed to receive funding from their host companies.

Coming off almost two solid years of crises, though, one prediction in particular caught my eye—in 2022, Forrester predicted, “only 10% of manufacturers will successfully operationalize COVID-era creativity.”

But what is COVID-era creativity? Some businesses adopted temporary measures in light of the pandemic—breweries temporarily swapped production to produce more hand sanitizer during shortages—it seemed a little strange to expect most of those measures to stick around. And what, I wondered, does it mean if only 10% of them manage to leverage it during a year we hope will be the last one marked significantly by the impacts of COVID-19?

“COVID forced some creative behavior,” Miller says, because it forced manufacturers to adapt to certain changes they may have otherwise been slow to pick up. His first example was remote maintenance on machinery.

Remote Work Grows Up

Videoconferencing is not new technology. Microsoft integrated Skype, one of the most recognizable early video call programs, into Windows nearly a decade ago. But, before the pandemic, it wasn’t taken seriously as a business tool—especially not for remote maintenance.

Pre-COVID, Miller explains, “if you bought a great big piece of industrial equipment, part of what you were buying was an engineer from the makers of that equipment turning up in your plant every six months or so, neatly pressed overalls, shiny boots, hardhat, with a company logo, and all that, to service the asset… If a vendor had said, this time, we’re not going to send an engineer out, we’re just going to have a FaceTime call, you would have assumed they were trying to save themselves money, and you would have assumed they were going to give you a poorer service.”

But videoconferencing-skeptical plant managers got an awakening in 2020: “Suddenly, along comes COVID, and you actively don’t want that person in your facility. And remote assistance was a useful way to address that.” Skeptics, Miller says, have found themselves becoming more open to other ideas as well, taking technology a step further and exploring the potential of remote maintenance staff.

On the other side of being open to new ideas, Miller says, are customers who’ve realized remote service can be better than in-person. As Miller puts it: “Would you rather have the engineer in Germany who designed the thing on a video call today? Or a local truck engineer who went on a training course six months ago to turn up in a week?”

Sliding Back to the Status Quo

Yet, despite the pandemic innovation of the last two years, Forrester research anticipates that the majority of industrial businesses might soon make the mistake of turning their back on pandemic-era innovations in favor of doing things the old, easy way—business as usual, in other words.

For last year’s report, Forrester predicted what “seemed obvious,” Miller said: That industry would keep riding the wave of novel solutions beyond the immediate crisis.

“[We predicted that] manufacturers would embrace this, and we would remain creative coming out the back end of the pandemic,” Miller says. “But what we’ve actually seen is that the middle, the sort of mainstream mass of manufacturers, as they go back to something approaching normality, they also go back to the old way of doing things.”

That’s a mistake, Forrester’s report says. The true leaders of the manufacturing field in 2022 will be those who maintain their crisis-era mindset of innovation going forward. The Forrester report identifies Bosch and Mercedes-Benz specifically, for their collaborative teams and embrace of AI-fueled digital twins.

Riding the Innovation Wave

Another company looking to continue riding the wave of crisis-era manufacturing innovation is Vecna Robotics. Founded in 2018, Vecna sells warehouse management system software and autonomous pallet-movers to manufacturers and warehouse owners. Vecna’s business model, as a manufacturer selling advanced automation systems to other manufacturers, put it in a fortunate position to observe crisis innovation from two angles.

Vecna CEO Craig Malloy notes that the COVID-19 pandemic has resulted in a surge of interest among manufacturers for innovative warehousing tech. “There has been a huge increase in demand for automation in warehouses and manufacturing facilities,” Malloy said. While increasing automation was “a trend” before COVID, Malloy says, increased demand for internet commerce really kicked things into high gear for warehouse managers.

For Vecna, it was an opportunity as well as a challenge. While clients were more interested than ever to invest in Vecna’s products, they were also more reluctant than before to let automation techs enter their warehouses to set up systems.

Vecna’s pallet-hauling robots are like Roombas, in that they don’t require extra in-plant infrastructure or signage to navigate, but traditionally Vecna still deployed an employee to help set up the robot’s map of the factory and integrate it with the warehouse management system. “Our folks normally accompany the robots in the initial deployment, primarily for training [and] to facilitate more rapid deployments,” Malloy explained. Most such installations take a couple of days to a couple of weeks before the system is ready to be monitored remotely.

But on one installation during COVID, Vecna made an exception. “There was one customer where we did the entire installation without setting foot in the facility,” Malloy recalls.

That installation, Malloy says, has enhanced Vecna’s thinking about how to best deploy their systems. While their systems had always been set up so that a malfunctioning robot could phone home for corrections by a remote Vecna tech, the totally remote installation is leading the company to consider new horizons.

“It’s not solely designed for self-deployment, although I would say that I think that’s where we want to get to in the future,” says Malloy. “Next generations of vehicles and product offerings, we want to make these much more customer deployable,” especially in terms of where the company might go with future offerings. “If, in the future, we do smaller, low-cost robots where the economics don’t allow us to send out technicians with them—by necessity, they’re going to need to be much more self-employed, more self-configurable.”

Staying Innovative Post-COVID

Forrester Research predicts that only 10% of companies will remain pandemic-level innovative as the crisis eases. Principal Analyst Paul Miller says two ingredients are key to keeping that can-do attitude without massive threats to the future: Hire bright employees and let them make their own decisions.

“What sets [the 10%] apart are their people and their organization, which enables them to be creative,” Miller says. Rather than requiring otherwise bright, intelligent employees on lower tiers of company organization to hew to a mandate from a head office, companies in crisis tend to loosen their grip, allowing those low-level employees to come up with novel solutions.

Miller offered an example of one company that used local decision-making the keep operating at the height and epicenter of the pandemic. A European pharmaceutical company based in China needed PPE, but couldn’t get any. “Local managers on the ground,” Miller says, “had the autonomy and the flexibility and the intelligence to think of doing things a different way.”

A very old way, as Miller tells it: Barter. “They went to local makers of PPE and said, ‘We make disinfectant. You probably need that. We need PPE, and you make that.” After cutting a deal, the plant managed to stay open, even “100 miles from Wuhan,” as Miller tells it.

Miller acknowledges that example is a little extreme for most firms: “Head office back in Europe probably said, ‘You’re great, the plant kept working… please never, ever do that.” He went on to add, “there are rules and procedures for procurement for a reason.”

Yet the example solidly demonstrates his point: Giving local managers on the ground, who are as closely familiar with the situation at hand as anyone can be, the tools and the autonomy to make decisions may be the best way for companies to operate during a crisis or not.