In today’s volatile business climate, the path to success is not a straight line.
The coronavirus, or COVID-19, has disrupted the lives of millions. In the U.S. alone, new cases of the virus continue to rise, along with new reports of American deaths. The human toll is naturally the most troubling aspect of this crisis. But there are also threats to our livelihood.
Thought leaders across the country ask: what will the long-term impact be on the economy? How will industries–all of which are experiencing this crisis differently–respond to our new normal? With some workers now being classed as essential and many working from home if they’re able, it’s obvious that business is positioned to change. Our industry, especially, is being impacted around the world.
Manufacturing Feels the Strain of a Disrupted Supply Chain and a Diminished Workforce
Along with the human impact of this pandemic, there has been a dramatic effect on the manufacturing industry. What began as a supply-chain disruption in China has spread, gradually touching every country around the world.
The coronavirus first forced lockdowns across Asia, which paralyzed that region’s economy. Factories closed and activity in the manufacturing sector contracted rapidly in nations like Japan and South Korea. As Jean Olivieri, COO of Fictiv, states, “we’ve seen supply chain disruption amplified and new disruptions to demand and workplace practices pile on to create a perfect storm.”
Here in the States, we’ve had to make tough choices about which teams to send home, which teams to rotate, and which teams to furlough. We’re not only implementing health and safety protocols in our plants, we’re also making plans to ride out a recession that potentially could be more devastating than the 2008 downturn. As we look at the pre- and post-virus landscape, it’s clear that there will be short-term adjustments and long-term consequences.
Even before the emergence of this pandemic, manufacturing was experiencing the stress of a changing landscape. A labor shortage and skills gap problem in manufacturing was just one factor. The resulting burnout of long-term employees in the manufacturing field led to higher rates of injury and lower productivity. Sunnen, among other worldwide manufacturers, knew that a focus on education and a streamlined production model was needed to compete.
Manufacturing Has Shifted, and Will Shift Again
The fact that many industry leaders were already preparing for a pivot in strategy, pre-virus, may actually better prepare them for the changes coming down the pipe now. The new normal is manufacturing under pressure, and manufacturers know they have to do things differently. The Manufacturing industry has set for ourselves some ambitious goals:
- Better training and a sharper focus on education overall.
- Smart automation solutions.
- Workplace improvements to boost productivity and retain workers.
- A plan to reduce costs and gain efficiencies on the production floor.
- Strategies to gain additional market share through new customer acquisition.
- A roadmap for the changing future of energy and volatile global trade.
- An emphasis on safety standards and worker protections.
- A shift from outsourced production to inhouse production.
- Upgraded equipment and machinery.
Training and standardization will help facilitate these goals over time, but in the short term, priorities are shifting. What’s not shifting, however, are our core values. For over 100 years, we have made it a practice to listen and learn from what our customers, employees, and stakeholders need and expect. Today we are listening and adapting to what is needed.
The Coronavirus has Brought Some Priorities into Sharp Focus
Recently, a survey showed that 53% of manufacturers anticipate a change in operations due to COVID-19. 35.5% of those manufacturers are already facing supply chain disruptions. Globally, stock markets have suffered precipitous drops–the worst since 2008.
Leaders in manufacturing and supply chain are being forced to learn hard lessons from what’s happened and what continues to happen around the world.
We’re convinced that this virus does not mean that the model of our global economy should be abandoned. It’s a model that has pulled millions in developing nations out of poverty and lowered prices for consumers. We predict that manufacturing will continue to stretch to developing nations and that the global transport of goods will not stop. We also predict, however, that changes will be necessary to emerge from this crisis stronger and be prepared for the new reality that will follow it. In short, our supply chain must evolve to meet challenges like the disruption caused by COVID-19.
Manufacturing Matters Now More Than Ever
What hasn’t changed is this: The U.S. needs its manufacturing base. That’s clear as GM and Ford adapt their manufacturing plants to produce much-needed ventilators and Brooks Brothers shifts from Oxford shirts to hospital gowns. The manufacturing industry is just as impressive in terms of capability as it has always been. Now, however, it needs to be more; it needs to be adaptable.
Currently, there’s a great deal of risk involved in relying on overseas suppliers–not only a risk to the flow of products, but also a risk to the lives of workers as the spread of this virus continues. When manufacturers can’t do it alone, governments and industry leaders must identify which products and services are most important right now and step in to alleviate their vulnerability to supply-chain disruptions. These disruptions will be a focus in the short-term and the long-term as the manufacturing industry rises to meet present-day challenges.
We agree with this sentiment: In today’s uncertain climate, we need a two-pronged approach to supply chains: One that both takes advantage of overseas production and maintains domestic manufacturing. We can’t turn back the clock on globalization, but we also can’t solely rely on overseas production to give us the materials Americans need.
Industry Leaders Speak Out
“With many manufacturers having to limit their number of employees in a plant, organizations are finding creative ways to stay productive. Many are sending sets of teams (like engineering, design, quality, executives, and human resources) to work from home while others are rotating shifts—all in efforts of creating distance. These techniques are shedding light on possibilities for cost savings while maintaining productivity, which may otherwise have gone unseen. Going forward, many organizations may adopt these remote-working agreements as strategies to reduce costs, improve productivity, and increase worker satisfaction.” – Jason Kleinhenz, marketing and training manager, Exact Metrology
“We see manufacturing, among many industries, emerging from this pandemic more resilient and more innovative. This is the time where creativity, embracing technology, and outside-the-box thinking is called upon in ways that we couldn’t have imagined prior to this experience.” – Romil Bahl, president and CEO, KORE
“Manufacturers overall are now running scenarios and planning for future supply chains that have more redundancy and are less reliant on one region.” – Paul Donnelly, industry marketing director, Aspen Technology
At our firm, we believe the manufacturing industry will see enormous changes to the supply chain and a digital transformation. This is a change that has been a long time coming. The coronavirus crisis, in fact, has uncovered what many analysts have said all along: Manufacturers must replace outdated-but-comfortable supply chain tools like paper trails, emails, spreadsheets, and phone calls with a faster, more adaptable system. We may see companies embracing automized supply chains using newer technology. While many manufacturers have been slow to digitize, we may be in the early stages of evolution from the old way of doing things to a more efficient digital system. Supply chain software and digital manufacturing platforms will help us get there.
Naturally, this will take training and transformation. It will take learning from digitally enabled companies who were better prepared for this crisis and encouraging growth and transparency rather than knee-jerk reactions and short-term fixes.
Our Industry is Prepared for the Challenges Ahead
At our facility, one of our core values is persistence. As an industrial leader and the world’s only full-service provider of bore creation and finishing solutions, we are proud of our proven ability to adapt and grow. With recent acquisitions and an expanded line of products, we are in an even better position to assist our fellow manufacturers with top-of-the-line machinery, tooling, and abrasives.
We were founded not long after the Spanish Flu changed America forever. We have weathered the ups and downs of a changing economy, shifting workforce, and emerging technologies because we have always held true to our core values of excellence in our service and in our products. We believe that better products make a better world. As the world is impacted by COVID-19, we plan to embody this spirit by continuing on a century of quality.