How has manufacturing changed in response to the 2020 pandemic?
Using manufacturing technology to future proof the workplace
Challenges and demands are unique to every manufacturing business depending on what they make. During the 2020 Covid-19 pandemic, some saw a dramatic increase in demand, while others a dwindling customer consumption. But what aligns all these companies in their pandemic experience is the pressure to adapt in order to survive.
In this blog I’ll outline the changes I’ve seen across the industry, having gained insights from working with our manufacturing clients. I’ll also discuss what manufacturers should be preparing themselves for in order to grasp success as we move forward.
Mitigating risk and reducing costs
Whether experiencing an increase or decline in demand, all manufacturers had to deal with staff reductions during the pandemic due to redundancies, furlough, or absences due to an employee’s need to self-isolate. In total, this equated to a loss of around 25% of the workforce. Of course, a smaller headcount means a reduction in costs, but it also means fewer resources.
Meanwhile, manufacturers producing essentials such as food, toiletries and health products experienced rising customer demands of between 30-50% which is the kind of demand increase they only anticipate at Christmas time – if ever. These manufacturers had to reinvent their operations in order to produce more.
Part of re-imagining the process with limited staff was to introduce more automation into processes to help reduce the risk to employees and the businesses’ health. What this meant was if they were required to remove 50% of staff from their warehouse to avoid infection, production was still able to continue in the most efficient way possible.
Another change seen was the pace of projects and financial engineering. Projects that would usually take 18 months to achieve had to be delivered in weeks, if not days. This also increased the need for technology as these inclines in pace are hard to achieve through human effort alone.
Manufacturers have also changed how they pay for projects. They’re looking for small investments with big changes. And they’re asking questions such as:
- How can I mitigate paying for things up front?
- How can I reduce my outgoings and keep as much money in the bank to safeguard my business?
- Can I pay for the project after it’s successful?
What sits at the heart of these changes is efficiency. Manufacturers are wanting to cut costs, increase production, and retain higher quality, and automation is enabling them to do this. Being able to achieve this also has a knock-on effect on other operations – they’re able to reduce complaints, retain customers, and further future-proof themselves.
Incorporating agility into business models
Business models are changing significantly in order to bend to rising and falling demand levels. Satellite operations have grown in popularity to replace bigger production plants which require greater employee contact.
It’s an approach commonly known as the ‘man and dog’ approach. An employee will oversee a small plant and manufacturing technology will ensure they don’t need to touch anything within the production process.
Operations look like this:
- An employee oversees the plant
- The plant is run from hybrid cloud-based platforms and ideally powered by the Fujitsu G2 cloud-based manufacturing platform
- The tech links the plant to suppliers and customer stock take databases
- The plant will know when customer stocks are running low and anticipate an order
- The plant automatically reviews the supplier’s stock and places an order for the anticipated demand, using secure communications and ideally blockchain transact
Essentially, this approach adjusts to demand and reduces the cost of surplus.
During the 2020 pandemic, the technology used within this operation also proved helpful in protecting people. By placing sensors on high-vis jackets it was possible to track staff and shop floor worker movements. If an employee got too close to someone, an alarm sounded and it was logged to make it easy to conduct contact tracing.
It also added agility to the process because during outbreaks within the plant, the system could be redirected and operations resumed at another plant enabled by hosting manufacturing platforms in the cloud.
The winners and losers of brand reputation
Some manufacturers suffered big reputational damages over the course of the pandemic. Perhaps due to poor treatment of staff or abuse of the government furlough scheme for profit. This will be difficult to repair, and these businesses must consider how they can now reinvent themselves.
We’ve already started to see some businesses pledge to pay back the money they received through furloughing staff. And this may be something we see more of as manufacturers try to build on the good reputation they’ve developed – or salvage the one they’ve lost.
The manufacturers supplying supermarkets and hospitals have seen potential gains in customer support and brand reputation, having been given a near-public-service status enabling them start off post-pandemic in a strong position.
A future-proofing business through manufacturing transformation
Some areas of manufacturing have been hard hit, but businesses must stay confident in their products and how they go to market. If they lack confidence, investors and customers will too and they will lose their support, which will have even worst consequences.
It will be the businesses that embrace the future and work towards a digitally transformed environment that will be able to keep up with turbulent market demands because they will have agility within their operations.
So, for manufacturers looking to futureproof their business now, my advice is automate as much as you can, reduce your risk, increase your efficiency, and look after your people.