By Ruby Alvarado- General Manager, Energy Capital Magazine. “Four challenges in industrial manufacturing facing 2022“
The pandemic has affected the entire industrial manufacturing sector, from food and beverages to steel and cement. Supply chain shortages and disruptions, commodity volatility, and raw materials surging demand after the vaccine rollout are only some of the factors at play.
The Automotive industry faced truly disastrous drop-offs in production after severe shortages of steel and other components, like semiconductors, during 2020 and 2021. Also, paper products producers and other industries that rely on chemicals have had difficulty maintaining shelves stocked.
As a result, the industrial manufacturing faces many challenges now.Some of these challenges will be so demanding in the near future that only the companies able to add flexibility, resilience, and sustainability to their operations are the ones that will survive.
During the Rockwell Automation Fair, the company’s CEO, Blake Moret, said that indeed flexibility will be an essential component for survival in this new economic panorama. The fact is that production lines are changing rapidly; market demands are shifting at a pace that manufacturers cannot always keep.
Increased need for Digital solutions
As a result, there is a surging need for the adoption of automation and digitalization technologies. The connected enterprise enables the rapid shift from one assembly line to another, with zero downtime in production.
Consequently, manufacturers keep up with demand changes without losing millions. Juniper Research has projected that during 2021 there will be a 17% year-on-year increase in spending on Digital Twins technology, and such an increase will be driven chiefly by manufacturers.
However, the increased adoption of digital technologies must come in parallel with solid cybersecurity standards. Between the asset and its digital representation, there’s a massive amount of data. If that data is not managed carefully, or if IT and OT teams do not work collaboratively, a breach will surge, one that cybercriminals could potentially exploit.
A cybersecurity incident, or even worse, a ransomware attack, can altogether disable operations and disrupt the production entirely. A recent report from TrendMicro found that 84% of US organizations have reported phishing or ransomware incidents in 12 months.
Skilled workers shortage
Furthermore, adopting strong cybersecurity measures may not be enough, as frequently, a cybersecurity incident comes from the company’s personnel. Let’s take the case of the Colonial Pipeline, for example.
The breach came after an employee set a password without third-party authentication; a batch of passwords from the company had been leaked, and when the employee entered the password, he opened the door for the attack. Consequently, highly skilled personnel is paramount for any manufacturing company. Still, Covid-19 imposed physical distancing and remote work as the new normal.
This means that skilled technicians and personal are not always available on-site to conduct changes in production lines, which in turn widens the gap for incidents. Establishing augmented or virtual reality technologies for remote or “smart” maintenance could be helpful for companies to keep skilled workers close.
Finally, the energy transition increased the demand for natural gas worldwide like never before. Big economies like China switching from coal to natural gas and midstream projects stalled. They created the perfect mix for an energy crisis, as supplies couldn’t keep up with the demand.
Domestically, the US has remained strong as it fulfills its demand with its production. However, in Europe, many manufacturing companies are at the threshold of bankruptcy. Consequently, staying ahead of commodity volatility and disruptions through long-term agreements for natural gas or LNG will be crucial.