Sjöstedt leads Microsoft’s business for Manufacturing & Supply Chain Industry Solutions in Europe, the Middle East, and Africa, focusing on large enterprise customers. Prior to joining Microsoft, he was chief commercial officer for Hitachi Europe, leading sales of digital solutions to industrial customers.
- What are the most critical challenges facing manufacturers right now?
Patrik Sjöstedt: Costs are going up on energy and raw materials, which puts pressure on manufacturers to increase their productivity. We are also seeing major supply chain disruptions due to the shortage of electronic components and critical raw materials caused by covid and geopolitical instability. We are seeing increased pressure to make sustainability efforts more impactful and to deliver tangible results across the value chain.
On top of all that, there’s a skills shortage, as experienced workers are retiring and it’s challenging to recruit and develop new talent quickly enough.
- What can be done to overcome these hurdles?
PS: There are many tactics to address these challenges. Classic cost reduction and lean manufacturing initiatives can help improve efficiencies and quality while reducing waste.
Manufacturers can accelerate net-zero initiatives both inside their own four walls but also up and down the value chain with suppliers and customers. They can reassess their global supply networks to increase resilience and reduce dependencies on single sourcing and global supply. They can modernize supply chain systems to increase visibility and response times, and accelerate digital initiatives to improve internal efficiencies and collaboration in increasingly virtual organizations. And new services can be developed in house, or companies can go for more acquisitions to speed up time to market.
- What new opportunities have emerged during this time?
PS: Maturing technologies and the explosion of data from more and more connected devices are introducing new opportunities for optimization. This includes inside factories and plants, where they are using technologies such as machine learning, AI, and digital twins to reach new levels of automation.
For the supply chain, there’s an increased visibility of orders, inventory, and deliveries, with automation and intelligence eliminating the manual transactions and routine decision-making.
In the product life cycle, digitalization connects everything from design to manufacturing to aftersales and end of life. And it’s giving front-line workers superpowers by bringing decision support and knowledge to their fingertips.
- How can digitalization add value to manufacturing?
PS: At the foundational level, digitalization will bring a new and more flexible IT infrastructure. Such an infrastructure, based on hybrid edge to cloud technologies, will enable increased scalability, as well as provide opportunities to create a digital backbone with unified data from both internal and external systems. Having that data backbone in place is a crucial first step for the rest of your digitalization efforts.
Having unified data in place will then lighten up all of your digital improvement scenarios, supply chain visibility, predictive maintenance, energy efficiency, autonomous production, or whatever it may be. This hybrid cloud infrastructure will also give you the ability to quickly ramp up and ramp down high-performance computing capabilities, which will help your design and simulate efforts in product development, for example.
- How do you see the industry changing over the next decade?
PS: As a first scenario, I see developments related to virtual production networks with maximum flexibility, enabled by digital technologies and data sharing. Additive manufacturing networks is one such example.
A second scenario is that we, in some industries, are seeing more vertically integrated value chains emerging in which companies strive to have end-to-end control. EV battery production is one such example.