The new world reality post Covid 19 – How manufacturing companies are pivoting operations?
Process Manufacturing companies are adapting to the sudden changes in the economic landscape due to COVID-19. Dependency on China for raw material and supplies has hindered the local US market forcing manufacturing companies to pivot operations and meet consumer needs. Starting late January, China’s industrial production came to a standstill as companies suspended their operations completely amid the lockdown. Though China is getting back on its feet now, the whole world had to take its heat as the event disrupted the global supply chain massively. In 2020, China contributes nearly 20% to the global GDP. You can now imagine the losses businesses will suffer all over the world and how long it will take to recover and ramp up operations fully.
A survey by the German company Kloepfel Consulting states that every third company has Chinese customers in a higher number, and on top of it nearly 81% of them are dependent on Chinese suppliers to run their operations.
From the above facts it can be anticipated that a major supply chain restructuring is coming on your way. Now, more than ever, integrated technology is imperative to streamline and automate the lines of business, people and processes.
FIGURE 1 Industry-wise Projected Covid-19 Impact from Minor to Severe
Source : Statista
What is the new world reality in manufacturing?
The World Health Organization (WHO) has declared COVID-19 a public health emergency which led to a seismic shift in the life of manufacturing and distribution companies. The industry is now experiencing a new reality in running operations while they continue to produce finished goods to meet customer demand. Of course, remote tools and collaboration softwares are helping certain departments within these companies to manage work remotely. However, full quarantine is not a viable alternative for certain sections of the industry that require an actively engaged workforce in manufacturing and supply chain operations.
Honeywell now plans to start making over 20 million face masks a month to help healthcare workers battle the coronavirus.
Honeywell’s move of ‘coming to aid’ at this time is commendable and is paving the path to other enterprises from the same industry. Current day consumers’ needs have shifted to safety and hygiene which in turn has become one of their business objectives.
Companies that have always been historically change-averse are now forced into a new way of working.
Conventional manufacturing and distribution organizations have always been apprehensive in making any process or technology advancements. With the sudden change in market dynamics, these businesses are realizing the need for an enhanced technology they wished they had adapted earlier. This thought process has created a forced awareness which is now their ‘new reality’ and there is no going back after that.
So, how are companies pivoting operations?
Manufacturing facilities that are already suitable to create products requiring batch processing, are taking a leap into newer areas of production in an agile mode. These companies have the facilities to accommodate materials and processes. They are familiar with proper quality testing standards and potency detection methods for batches. Quite a few companies have already pivoted to help out in every way possible. But only companies that are well automated, are the ones that can move quickly in such emergencies.
Corona Virus Pandemic is hurting the bottom line of Manufacturing Industry globally. You need to find an effective alternative sourcing strategy to survive through this massive supply-chain disruption.
FIGURE 2 Supply chain within manufacturing with the ability to pivot operations
In this ‘new normal’, companies that can pivot quickly to accommodate consumer needs will become the front runners and market leaders of the future.
Business users adapt quickly ‘only’ if they are ahead in process automation and optimization. The benefit is leveraged by using the right kind of technology that can effectively handle various processes and procedures. New-age technology is instrumental in simplifying work and transforming business users into advanced users, especially to streamline HR processes that enable users to be ready for any changes. With newer skills, users can easily adapt to sudden changes and disruptions caused due to a pandemic like COVID-19.
What do operators need to adjust to the change?
of respondents believe that coronavirus could have a significant impact on their business operations.
-A PWC Survey of CFOs
A well-streamlined workflow can help the workforce fall into the rhythm. Especially workforce with native knowledge of their regular operations, need to rapidly adapt to the change in functioning. It is not always easy to handle the new set of production lines that are abruptly put in place. Operators would require a detailed understanding of the new product batch records in order to adapt to the change.
Workflow for warehouse operators should be streamlined to –
- Guide them while using mobile devices
- Help them progress through each step
- Hand hold them during unknown situations
- Allow them to record inline deviations
If companies are unprepared, they may go through a chaos during manufacturing execution. Production managers and supervisors who have also been used to familiar batch records with specific yield expectations, are now adapting to the ‘new thing’ that they need to produce. Alerts on each operation would immensely help them be aware of how the overall production job is progressing.
FIGURE 3 Supply chain within manufacturing with the ability to pivot operations
When it comes to the regular production operations, Production supervisors or Plant managers are used to seeing both the norms and deviations in the process. Without an internal view of the new product history, they will need to be extra aware of test results and yield quantities of each production job to quickly analyze and extrapolate how to adjust batch formulas, and rapidly incorporate the learnings of each production run. A rule-based algorithm that can look at the last ‘n’ batch runs and automatically suggest changes for ‘approval and instant adoption’ will be crucial to keep the process optimized in an agile manufacturing environment.
Companies that are taking up these initiatives are also required to understand how the end consumer is reacting to the new products released in the market. An easy way would be to label their products with proper QR codes that can be scanned to quickly send an end-user survey back to the manufacturer about their new product. These quick surveys help the manufacturers understand consumer feedback about the product. The feedback can be incorporated into their testing methods to make on-the-fly decisions and corrections of their manufacturing execution.
What are the few technological elements companies wished they had within operations during the Covid19 pandemic?
A question that every manufacturing company is asking to understand is how they can simplify and streamline their processes further to keep the momentum in the operations going. A few technical elements are depicted in the picture below.
Companies have asked me how all of this is different from what was recommended in the past year? It isn’t, but the need is more real now and is no more a nice-to-have. These technological advancements have become an ‘essential-to-must-have’ if businesses want to survive the current condition.
How do we get the required automation?
Unless we see what the business is at its core, it may not be possible to provide a specific view of what all changes would be needed. However, going by some assumptions there are a few business solutions that can be drawn out to help businesses to become more agile in their operations.
FIGURE 4 Batch Manufacturing Facility Agile And Optimized
All of the different ways to speed up, simplify and automate overall operations can propel companies to function a lot more efficiently and be agile to changes that are thrown at them while they are still dealing with a limited workforce.
- There is never an individual contribution that can move a huge ship forward during difficult times. It is always the collaboration and synchrony of an entire workforce that really pushes the throttle. The trick is in how well you are able to keep your people aligned with all the technologies you invest in.
- Technology centric Manufacturing organizations are already ahead of the market curve and when sudden changes occur, a well defined HR department of a company that has agile training plans in place helps with the changes that are thrown at them.
- Finally, it is important to understand that even though temporarily it may feel as though companies need to bear the cost of advancement and changes, in a bigger schema a good technology stack like Microsoft is essential for the overall success of any organization.
Recommendation to the reader: Evaluate Microsoft suite of tools to help your business and stay agile in this volatile market.
Xcelpros is a direct Microsoft Cloud Solutions Provider and can help you with your business continuity and make you nimble during these times. We are currently offering various discounts on multiple Microsoft products and Transformation packages. Contact us right away!
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