How should leaders in the manufacturing sector respond to the unprecedented disruption caused by the ongoing COVID-19 pandemic? Here how companies in the manufacturing industry can minimize their losses during these uncertain times.
The ongoing Coronavirus pandemic has brought disruptions in industries worldwide, including the manufacturing sector. Most headlines surround customer uncertainty and the visible disruption of production and supply chains. However, besides that, companies around the world also face challenges like crisis management and the need to protect their people.
in fact, recent data show that in the manufacturing sector, 53% of companies expect the pandemic to impact their operations. What’s more, the manufacturing industry (which employs over 13 million workers in the US) was doomed to be hit hard by the pandemic for two reasons:
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- Most manufacturing jobs are on-site and cannot be completed remotely
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- Slowed economic activity also impacts the demand for industrial products both in the US and globally.
What’s more, when asked what their top concerns with respect to Coronavirus are, most CFOs chose financial impact (71), potential global recession (64%), and the effects on workforce/reduction in productivity (41%.
So, can leaders in the manufacturing sector adapt their businesses to these uncertain times to minimize their losses? If you are a manufacturing business owner, here are a few strategies that can help respond to the impact of the pandemic on your company:
Adjust production based on demand
One of the main changes that emerged as the pandemic spread across the world is a significant drop in consumer demand.
If you think you are the only business affected by the pandemic in terms of demand, think twice. As governments across the world issued lockdown restrictions and people turned to ordering essentials online, all businesses have faced a drop in demand.
Take the automotive industry, for example. Since the beginning of the pandemic, the sector is facing major disruption in production, global supply chain, and consumer demand. Yet, this is only an example. Industries like travel, transportation, leisure facilities, and oil and gas drilling have also been hit hard by the impacts of the pandemic.
So, what can you do to minimize losses? You must keep assessing the impact of the pandemic and consumer demand on your supply chain and operations to synchronize all your operations and production based on the impact.
In other words, if, say, consumer demand decreased by 50%, you must adjust your production to meet the 50% demand left. So, don’t produce more than you will know for sure that you’ll sell. When you produce more than demand, you basically block your investment until the market faces a better time and consumers start buying again.
Protect your workers
Your team is what keeps your business running. Employees are any company’s most important resource. So, it makes perfect sense that you protect them during these uncertain times.
Now, as businesses across the world are starting to reopen their doors, one of the biggest challenge leaders are facing is keeping employees safe in an environment where the spread of the virus is a persistent threat.
How do you protect your workers? First of all, you need to deploy a comprehensive set of policies and guidelines, including enhanced hygiene measures, protective equipment, and physical distancing.
What’s more, besides protecting your workers from getting the virus, you must also protect their mental health. The Coronavirus pandemic has impacted your employees’ mental wellbeing. Just like all of us, your workers also deal with stress, fear, confusion, and many other negative emotions that can make their mental health take a toll. So, how do you make sure your employees have good mental health? You can offer counseling services to employees returning to work after being in prolonged quarantines.
Now, you need to get your team involved in keeping your company a safe and healthy work environment. It would help to communicate with your workers as much as possible and ask them to respect all safety guidelines and protocols to avoid getting or spreading the virus from and to their colleagues.
Embrace automation
Technology is a critical component of most businesses these days, regardless of size and industry. In the manufacturing sector, technology is crucial to boost efficiency and productivity.
During these uncertain times, technology can also be the key to supporting your workers and improving productivity while reducing costs.
Like we’ve said before, one of the trickiest parts about this sector is that most of the jobs can’t be completed remotely. However, you should test and implement new technologies, such as remote collaboration software, for those tasks that can be done remotely.
What’s more, this is the best time to explore a proactive deployment of automation technologies, including collaborative robotics, IoT, or conveyor systems. For example, the conveyor systems and autonomous solutions from Mainway Handling Systems can complete tasks like sortation, materials handling, and even disinfecting.
The more technology and automation solutions you offer to your workers, the better you protect them from the virus, while also ensuring that your business operations keep on running.
Renegotiate with your customers
With a significant drop in consumer demand over the past few months, the chances are that your business finances have been affected a lot lately.
Now, as a manufacturing company, most of your clients are, most likely, business customers, who also understand the negative impact of the pandemic. So, you may turn to these customers and try to renegotiate your contracts so that you minimize your losses and increase your profit.
Or, you can reshape your sales strategy and move to e-retail direct-to-customer sales if that helps you increase your overall profit. In other words, update your business plans to reflect the changes you can see, first of all, in your company, in the marketplace, supply chains, and trade relationships.
