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How Can You Manage Volatility As A Manufacturer?

Updated: Jan 11

Manage Volatility

Manufacturing has faced increased volatility in the last few years, not least in the automotive industry. The triple whammy of challenges within a short period – the pandemic, Brexit, and war in Ukraine – set a lot of organisations back and created severe supply issues.

COVID-19 affected different manufacturing sectors in different ways but triggered material shortages and extended lead times, especially for semiconductors. As lockdown measures tightened, fewer people drove their cars, and those furloughed or made redundant re-prioritised their expenses. All this to say, demand and supply were out of balance while costs went up.

But the automotive industry such as Jaguar Land Rover– and the manufacturing sector – is still here. How? It’s all down to how they managed volatility. What lessons can you take from their approach?

The ‘go to Gemba’ issue.

The COVID-19 lockdowns did more damage than just disrupting the market. Manufacturing organisations had to adjust to remote working, and going to the Gemba for leaders (as in, to the actual place where the work is done, like the factory floor) became highly restricted.

Going to the Gemba helps companies understand the issues at the coalface while promoting an inclusive and engaging culture. Without it, picking up the pieces when people leave companies is more challenging. Businesses lose momentum in their Continuous Improvement and Organisational Excellence journeys.

Challenges – new and old

While the pandemic, Brexit, and the Ukraine war have undeniably caused significant disruption, they aren’t the only dynamics in the industry. You’ll know them all too well. The shift to electric vehicles. The rise of technology, particularly AI. The imperative to be more environmentally sustainable and meet different generational needs. The opportunities that equality, diversity, and inclusion present. It’s a never-ending list for manufacturers.

Standing up to the problem

From Organisational Excellence to Agility, how are manufacturers navigating through volatility?

Solution 1: Reinvigorate Organisational Excellence

Despite the dynamics of the past few years, the principles of Organisational Excellence still hold true for manufacturers in the automotive industry such as Nissan and other sectors. Let’s look at an example – what do companies do in the face of such volatility?

A great organisation has a constancy of purpose, i.e. is clear on their end goal, objective, and present strategies. An unexpected pandemic or Brexit doesn’t distract from their mission and long-term vision – their ‘true north’.

Moreover, they value respect for every individual. When things become uncertain or take a turn for the worse, companies may assume emergency positions. But leaders need to ensure everyone’s voice is heard by listening to their hopes, fears, and aspirations while managing expectations. People still need to feel cared for, empowered, and trusted to give their best to the job.

Solution 2: Join the Agile game

COVID-19 taught many manufacturers to become more agile, adapting and flexing to new information. This lesson is pushing organisations to give more autonomy lower down the organisation to adapt and improve their processes, rather than relying on traditional management styles where senior leaders make all the decisions.

What does this look like? Trying things out. Allowing and encouraging failures. Problem-solving. Rapid PDCA (Plan, Do, Check, Adjust) cycles. The concept of ‘VUCA’ is key – and has been around long before the pandemic:

  • Volatility

  • Uncertainty

  • Complexity

  • Ambiguity

In essence, planning needs to be in shorter time frames; think three months rather than three years.

Get off the dancefloor, and get training

Leaders need to get off the dancefloor, get onto the balcony and look out over the whole scene – so to speak. It’s natural to get lost in the whirlwind of operations. But you should protect your time and create a routine that allows for reflection and planning. After all, you can never look ahead if you’re always looking inside the business – manage yourself and your own priorities as well as others.

And part of this is ongoing management training. Education is crucial for providing leaders with the necessary skills, tools, and knowledge to unlock the potential of teams and improve performance. You’ll be able to organise and tackle market challenges, from the acceleration of digital and hybrid working to employee engagement, rather than letting them beat you.

Our Team Leader Development for Manufacturers course and Continuous Improvement Practitioner Programme provide a space that enables businesses to achieve their goals – from improving communication and problem-solving to increasing quality, safety, and employee performance.

If you’d like to sign up, or have any questions, speak to our friendly team.



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