COVID-19 has created a drastic effect on global health and the economy. Every nation is struggling to deal with the challenge of keeping its residents protected against coronavirus. Businesses are witnessing huge financial losses owing to a reduced/lack of workforce and other resources. If we talk about the manufacturing industry, it also has been hit hard by the corona crisis, and the fact that it has a huge role to play amidst coronavirus lockdown, this impact is felt the most by everyone.
The global supply chain got disrupted because of coronavirus, and since it originated in China, which is considered as the biggest manufacturing market globally, the ability of the manufacturing industry to meet the needs of the customers came down significantly.
So, let us throw some light on the impact of coronavirus on the manufacturing industry, and figure out some effective ways that can help manufacturers restart their business proficiently.
The Prophets and Prediction
The Prophet: The problem with prophecies is that they are based on data that is just a few weeks old, which is not sufficient for business leaders to make hard, cold business decisions when it comes to coming back in the market.
The Prediction: With social distancing becoming a norm, most of the people look forward to buying online. This clearly means that the scope of eCommerce is on the rise, and manufacturers will be looking to make a shift gradually.
Restarting Your Manufacturing Business
Every business is looking to return to the market, but due to the measures that are being adopted to reduce or prevent coronavirus are affecting the supply chains directly, which, in turn, is leading to disruptions in the manufacturing operations worldwide.
If we talk about the manufacturing industries like automobiles where production is done on a massive scale, the schedules for production are rigid and efficiency-optimized. In a similar way, the working of supply chains is dependent on schedules that are fixed like months ago based on the demand projections. Still, automobile owners are looking forward to remodeling such systems to be able to meet the irregular demand atmosphere.
Every crisis consists of several challenges, but one should look for opportunities within them. So, keeping the new norms of personal protection and social distancing, businesses need to redesign their business models.
To help businesses get started again, we are providing some guidelines that will help them to:
-Evaluate the organization’s COVID-19 safety compliance and requirements.
-Restructure the workplace for personal safety and protection.
-Implement procedures for personal protection.
-Put into practice the action plan for restarting to ensure a secure future of the company.
As per a Deutsche Bank analysis, the growth of GDP on the global level will be lower in 2020 due to the coronavirus effects. This effect will leave its impact on most of the U.S. and Europe, with growth forecasts on the global front also likely to drop by 0.2 percent.
Taking Care of the Workforce
The manufacturing industry is dependent on its workforce, and most of them proceeded towards their hometown owing to the fear of contracting coronavirus. In order to get its workforce back, a manufacturing company must keep track of the health status of every worker, along with gaining knowledge on the happenings in their areas through digital mediums. This will help them in knowing from which parts of the country they can call back their workforce to restart the manufacturing processes.
However, at this point in time, most of the manufacturers have to wait, and even if they are able to start the operations with a minimal workforce, they will be unable to manage their other important processes like accounting. In such cases, opting for Outsourcing manufacturing accounting services becomes imperative.
Securing Supply and Inventory
Instant delivery and globalization have turned out to be huge risk areas. Suppliers, including sub-suppliers, are all going through a similar situation. During such crisis situations, a huge concern comes to the top since procurement teams are unable to have close contact with their manufacturing suppliers. This, in turn, restricts them from monitoring the capacity of the production on a weekly/daily basis or evaluating the latest logistics prices and routes.
Now, with COVID-19, supply and inventory are in a position where there is a high risk of contractual defaults and severe legal action concerning the inability to fulfill orders on time or otherwise.
Why do Manufacturers Need to Rethink their Restart Strategies?
Most of the manufacturers are ready with their restart strategies and looking forward to implementing them ASAP. These new strategies are primarily focused on:
-The use of digitalization to receive data and have a superior visualization of the supply chain with control-centric solutions.
-Automation and robots to enhance the flexibility of the plant, including the capacity to run significant processes remotely or alone.
There is no denying that manufacturers are moving in the right direction, but they need to figure out for how long and at what pace they can carry out their production with a minimal workforce, technology support, and funds. The reason being local and international supply chains are disrupted, and one cannot say till how long this situation remains the same.
If a manufacturer is heavily dependent on the demand of a specific region or country, he may have to slow down his operations due to a lack of demand because of COVID-19. Low demand means a low supply and returns, leaving little funds for the manufacturer to operate. So, manufacturers need to assess their new strategies from every angle so that they are ready to face the forthcoming unexpected challenges.
This is a challenging situation for manufacturers for sure, and they cannot halt their operations for long. The above-mentioned suggestions will surely help manufacturers to not just get started but ensure smooth business operations in the future. Yes, they need to devise strategies, keeping in mind not just the present scenario but the possibility of forthcoming events, to stand strong against any unfavorable circumstances that might arise in the future.
Gia Glad works as a Business Development Manager at Cogneesol, a well-renowned company offering data management, technology, accounting, and legal services. While handling the projects, she has witnessed a lot of changes over the years. She has been thoroughly researching and sharing her viewpoints about these industry trends and changes on many platforms across the Internet.