The outbreak of the Covid-19 pandemic had sent the manufacturing sector into a topsy-turvy state. Due to government-imposed restrictions and lockdowns, most of the operations were halted or curtailed. Some of the manufacturing units were even brought to a standstill. The supply chain was immensely disrupted leading to a shortage of raw materials, intermediate products, and finished goods. Employee health is also a matter of grave concern as physical interaction is risky.
The key to overcoming such hardships lies in adapting to such circumstances. Anticipatory steps from both government and manufacturers will help in stabilizing the sector and fostering economic growth. China had portrayed exemplary behavior in adjusting to the current situation. As a result, Chinese GDP was showing positive trends while major economies had collapsed. CNBC has claimed that China’s GDP in Q3 had rebounded to 4.9% growth.
To plan and accelerate response, the following are key recommendations for the manufacturers for their recovery.
1. Creation of an Agile Nerve-centre Team
Why do corporates seem sluggish to act in post-covid times when they had taken the quick decisions and rapid responses during the pandemic? It is the need of the hour. Such a mechanism should be applied to normal situations too. An agile nerve-centre team must be formed with some experts, decision-makers, and decision implementers. Based on the expert analysis, their recommendations can be considered by the decision-makers. After approval, the decisions would be implemented by the frontline workers.
Once the crisis subsides, such a team must remain active and alert to practice agile decision-making. Such responsiveness would not only help in tackling uncertain events but also help in making the most of market demands.
2. Updated technology
Companies that are more innovative in terms of leveraging the benefit of advancing technology were able to manage adverse conditions arisen due to the pandemic. The corps, whose solutions are based on the cloud had shown better resilience. Though cloud solution has its own security and performance issues, flexibility and less turnaround time for business continuity had weighed the scale in its favor.
Another revolutionary advancement was 3-D printing. It will accelerate the shift towards digital manufacturing. It had proved to be successful in the conversion of design to finished goods. One such example seen was ventilators. 3-D printing experts and regulatory bodies such as FDA had matched shoulder to shoulder to make tested ventilators for the emergency.
For manufacturers, the inclusion of such solutions should be on their top chart to achieve tighter demand-supply agility and financial health. Companies open to new technology had shown 7% more revenue growth over their peers.
3. Extended Supply Chain
In the global supply chain model, price is no longer the only prime criteria to source parts globally. Doing so would lead to a shortage of supply in a region farther from the supplier’s region. The regional supply chain needs to be incorporated. And they need to assent to global trade compliant requirements. It might not be the most cost-optimized but it will ensure reliable supply.
In the case of supply stoppage across the borders, manufacturers must accelerate the development of local, low-risk suppliers. They would help in the smooth flow of materials. It is time for letting go of intellectual property rights, especially in the healthcare industry. Medtronic is one such company that had shared the design of the PB 560 ventilator publicly for the greater good of society.
4. Change in Consumer Behavior
Consumer behavior had shifted due to the pandemic. After the lockdown would be lifted, new sales and marketing strategies are needed to adapt to new buying behavior. High-price goods such as automobiles were traditionally sold face-to-face. A new rich interactive online catalogs or sessions would compel the buyer to purchase the product. This would create a similar experience for the buyer as done before traditionally.
Almost every economy had trembled. The lower section of the economy pyramid had been hit hard. When normalcy has been established, affordability would be a major aspect in every consumer’s mind. Manufacturers’ should look out for value-added services and subscription value-based models to shift focus to customer-centric solutions. It would streamline revenue to old stable charts.
Empathetic behavior in times of crisis would make a long-lasting impact on the customers. Now, everybody remembers General Motors for manufacturing ventilators and Louis Vuitton for manufacturing the sanitizers and face masks.
5. Protect and Up-skill the employees
Employees are the ones that will handle every operation for you. Therefore, it could be a great time to up-skill them. Not only would it help in times of crisis but also after the pandemic is over. Online learning platforms can immensely help in meeting this needs.
Big corporations must be concerned about their employee’s health. Online methods or automated solutions must be implemented to avoid the risk of infection and improve operation. For example, Walmart’s robot-run warehouse in New Hampshire reduced the human handling of goods and improved operations too. Such ideas could be used in other areas as well.
The Covid-19 has highlighted the importance of supply chain management and remote working. It is high time for manufacturers to convert every challenge to a growing opportunity.