MT Magazine November/December 2023

Dealing With Disruption “We define disruption as the displacement of businesses, markets, and value networks as the result of economic, societal, environmental, political, regulatory, or technological changes. Technological innovations can, in addition, serve as catalysts to accelerate other disruptive forces.” – AlixPartners Dan Hearsch, a partner and managing director who has a specialization in manufacturing operations with AlixPartners, a global management consulting firm, says disruption puts organizations out of their normal operating environments, and an issue that it causes, or is characterized by, is a high level of unpredictability. While changes are simply characteristic of the way things occur, Hearsch says there is a marked acceleration of change, and it’s happening in unexpected ways that are challenging industries across the globe. He uses an example from the pandemic that may seem trivial but is really to the point: the run on toilet paper. Did Procter & Gamble or Kimberly Clark see that coming? That simple circumstance made it clear how the supply chain has a level of fragility. Of course, on a more “professional” level, there was the chip shortage, which, Hearsch says, continues to resonate today and has necessitated a rethink of sourcing, inventories, and internal capabilities. Primary factors contributing to disruption include: • Regulations • Economic conditions • Technological developments • Environmental, social, and governance issues • Employees In a global survey of 3,000 executives within the categories of Aerospace & Defense, Automotive, Consumer Products, Energy & Power Generation, Financial Services, Healthcare & Life Sciences, Media & Entertainment, Retail, Technology, Telecom & Cable, AlixPartners found that 98% of companies are now changing or expect to change their business models in the next three years to address disruption. That said, 85% say they are finding it increasingly difficult to know how to start dealing with disruption – and 70% of the CEOs are worried about their jobs as a result of disruption.

Yes, the GE Appliances Café 4-Door French-Door Refrigerator features built-in Wi-Fi and works with the company’s SmartHQ app, but fundamentally the advances in refrigerators have been predicated on change, not disruption: An internet-enabled refrigerator is still a refrigerator. But an Internet-enabled vehicle, while still a mode of transportation, conceivably becomes something that drives rather than something that’s driven. That’s disruption. (Image: GE Appliances)

by the major players in the industry, which has had profound consequences on production. Consider, for example, forgings. Eichenberg says that this is a roughly $90-billion global industry. But ICEs account for about half that, and the remaining markets really have no high-volume applications – at least not automotive style volume. A given forging company, Eichenberg suggests, may have become one of the best in the world, fully embracing lean, and is operating presses 24/7, providing parts, say, to General Motors. And it has developed a highly efficient business model to do so. Things are good. Or seem good. “What happens when the reason for that business model no longer exists?” Eichenberg asks. What happens when ICE volumes decline – and they are declining. Or consider wiring harness manufacturers. Eichenberg notes the original Tesla Model S has some 3 kilometers of wiring in its harness – and the Model Y has about 100 meters. While that may provoke nothing more than a shrug and an excuse (e.g., “We don’t supply Tesla.”), he points out that Ford and General Motors are pursuing the same approach. If this approach to minimization becomes more prevalent in other components, then there is an issue for those beyond wiring. “What happens …?” And then there are the so-called gigacastings Telsa is employing to create front and rear underbody structures (and will likely be using to create an entire underbody for a forthcoming smaller vehicle). These parts are produced with large high-pressure aluminum die casting machines – as in 6,000 tons and greater. These large castings eliminate the need for literally hundreds of stamped parts as well as everything that goes with assembling those stampings into larger structural components. (If you’re in the stamping, tooling, welding, or associated business, consider the