Survey

The Opportunities Ahead

The COVID-19 pandemic has wreaked havoc on much of the industry so far this year, but manufacturers see a host of operational, supply chain, and cultural improvement opportunities emerging from the crisis.   By David R. Brousell

John D. Rockefeller, the founder of the Standard Oil Company and one of the industrial titans of the 19th century, once said that he “… always tried to turn every disaster into an opportunity.”

In what has turned out to be a cataclysmic first half of 2020 due to the COVID-19 worldwide pandemic, Rockefeller’s attitude appears to be much on the minds of manufacturers as they grapple with recovery and renewal in the months and years ahead.

As manufacturers look to emerge from the crisis that has severely impacted the U.S. economy for months, stabilize financially, and bring their people back to factories and plants in a safe manner, they are also intently focused on a myriad of opportunities that the pandemic has perhaps unintentionally emphasized.

Chief among these, according to the results of a new survey by the Manufacturing Leadership Council, are accelerated investments in digital technologies to create greater production flexibility, a repositioning of supply chains for greater resiliency, and changes in corporate culture to drive more effective collaboration.

Moreover, manufacturers expect an industry-wide benefit arising from the pandemic – an improved perception of manufacturing within the general public.

1 Over two thirds Cite Digitization as Essential or Partial Factor in Their Ability to Respond Rapidly

Q: How important a factor was your pre-COVID level of digitization to your ability to respond rapidly to the crisis?

2 Over 50% Now Expect M4.0 Adoption to Accelerate After the Crisis

Q: Looking forward, what do you expect the impact to be on your adoption of automation and digital technologies as the industry emerges from the crisis?

3  Real-Time Data & Analytics, Remote Operations & More Flexible Manufacturing Now Top Drivers for M4.0 Adoption

Q: If accelerate, what will you be trying to achieve in your production facilities?

4 Supply Chains Will Change: Renewed Focus on Resiliency, Local Production, and Supply

Q: What do you expect the future impact to be for your supply chain as the industry emerges from the crisis?

A Strong Response 

As the pandemic coursed through the country in the past few months, manufacturing production declined significantly in most of the industry as demand for certain materials and products, particularly in the automotive and aerospace sectors, largely evaporated. Nearly 80% of survey respondents said that their plants and factories had either decreased production capacity or closed during this time.

Nevertheless, many manufacturers were hard at work introducing safety and health procedures in their facilities. Those that could shifted production to products such as personal production equipment to help deal with the threat of infection from the virus. And many others donated PPE products to regional and local medical facilities.

In an important finding, 75% of survey respondents said that digitization accomplished before the pandemic was a key factor in their ability to respond rapidly to the crisis, with 45% saying it was “essential”. Moreover, 53% said that, going forward, they expect their adoption of digital and automation technologies to accelerate as a result of the pandemic (charts 1 and 2).

No doubt the increased need for production flexibility as well as the ability to work remotely are much on the minds of manufacturers as they think about the days and months ahead. When asked what they are hoping to get out of an accelerated adoption of digital technologies, respondents cited more real-time data about operations, better analysis of that data, a greater ability for remote monitoring and operations, and an increased focus on more flexible manufacturing processes (chart 3).

66% expect that the public perception of manufacturing will improve as a result of the pandemic.

5  Corporate Cultures Will Change: Better Prepared, More Collaborative, and Stronger Common Purpose

Q: What do you expect the future impact to be for your corporate culture as the industry emerges from the crisis?

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6  Working Practices Will Change: Acute Focus on Health & Safety, More Virtual Working, Increased Automation, Fewer Workers

Q: What do you expect the future impact to be for your workforce as the industry emerges from the crisis?

7  Public Perception of Manufacturing
to Improve Significantly, Say 66%

Q: What do you expect the future impact to be on the public perception of manufacturing as the industry emerges from the crisis?

Rethinking Supply Chains 

Due to trade uncertainties, particularly with China over the past couple of years, manufacturers were already rethinking the models and configurations of their supply chains. The pandemic, however, has brought the thought process into sharp relief.

When asked what they expect the pandemic’s impact to be on their supply chains, 63% of survey respondents said they would increase their focus on making their chains more resilient, meaning able to adapt to disruptions more quickly and effectively. Forty-three percent also said they would increase their focus on local or domestic production and reshoring. Only 10% thought there would be no impact on their supply chains from the pandemic (chart 4).

On the perhaps subtle but nonetheless important question of how COVID-19 may affect their corporate cultures, respondent answers reflected an attitude that often arises in times of national crisis – a sense that everyone is in the same boat and has to paddle together to get to a safe shore.

Respondents said they expected an enhanced climate of collaboration, greater shared values and a common sense of purpose among working teams, and more regular and top-down communication with employees, behaviors that many have already experienced in their companies during the past few months of the crisis and which have been in evidence on many of the special Town Halls the MLC has been conducting on the pandemic (chart 5).

A Redefinition of Safety 

At the same, survey takers also expect significant changes on how work will be organized and conducted and how safety will be defined in the months and years ahead.

In addition to more regular and extensive cleaning regimes in their factories and plants as well as employee testing and health checks cited by strong majorities of respondents, there is also significant agreement that the pandemic will force a redefinition of work safety beyond accident prevention. Fifty-eight percent of survey respondents expect such a redefinition to occur.

Technology, too, will play an important role in how manufacturers conduct work going forward, with 42% of respondents expecting an increased use of automation on the shop floor. As a result, 28% expect they will be working alongside fewer colleagues even as companies increase training and upskilling of remaining workers (chart 6).

Like Sir Isaac Newton’s theory of how an external force can affect a body at rest, the pandemic appears poised to force into motion a series of changes that will affect the breadth and depth of how we go about making things. The shape of these changes is just now coming into view and will be subject to adjustment and refinement over time, but it would be a mistake to consider them temporary. Manufacturers should seize the moment to create a better future for the industry.

As they do, they may also help fulfill a long-sought hope – a new perception for manufacturing within the public at large that finally relegates to the dust bin of history the idea that manufacturing is a dark, dirty, and dangerous industry not worthy of a career.

In fact, 66% of respondents already believe that such a change in perception is in the works as a result of the pandemic (chart 7).

If there is a silver lining for the industry coming out this horrific year, this may indeed be it.    M

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