The Bullwhip Effect, according to the Wall Street journal is a “phenomenon that occurs when companies significantly cut or add inventories. Economists call it a bullwhip because even small increases in demand can cause a big snap in the need for parts and materials further down the supply chain.“The bullwhip has broad implications now as companies rush to fill orders while also restocking warehouse shelves.It touches everyone from retailers to the industrial companies that supply the grease, bolts and coal needed to churn out more products. The manner in which companies, large and small, respond to market shifts determines which ones emerge first from the slump and start growing again.”Nate Smith, GrayMatter’s Director of Strategic Innovation, said he has learned from talking to GrayMatter clients working in the automotive, steel, consumer packaged goods and other industries that supply-chain shortages resulting from the pandemic have a ripple effect.A delay in even a single item can hold back entire production environments.It’s a problem that highlights why it’s critical for companies to reduce the potential for downtime events by deploying solutions like Advanced Industrial Analytics, which uses machine learning to help organizations predict plant floor downtime events and prevent them, and OT cybersecurity solutions that can go on offense as well as defense, like deception technology, aka deceptionGUARD, which identifies and diverts potential cybersecurity attacks at the network perimeter before they can affect operations.“Once demand comes back, normally, you’re still under some sort of constraint, whether it’s supply or even labor. With COVID, full shifts are not being allowed back into plants in a lot of cases,” Smith said. “So, any amount of downtime that you might have in those situations is absolutely compounded in its impact and in its negativity overall. So, how do you reduce downtime?”
GrayMatter’s approach to Digital Transformation counters this effect in several ways. To schedule a briefing, keep in touch or to get more information, contact GrayMatter.Reduce Downtime– Predictable Manufacturing Asset Health– Optimized Machine AllocationIncrease 1st Pass Quality– Enhance product quality and throughputUnlock Hidden Capacity Through Greater Efficiency– Cut energy consumption aka WAGES (water, air, gas, electricity, steam)– Extend industrial asset lifeHardened OT Cybersecurity Strategy– Network hardening– Microsegmentation– Deception technology
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