Source:industryweek.com

How Will US Manufacturing Industry Adjust After COVID?

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There is a stark divide among the opinions surrounding what will change after the Covid-19 pandemic that has swept the globe. Some have hope that normalcy is waiting just around the corner while others fear that our previously perceived normal may never return.

For now, most of the world has a shared agenda: slow or stop the spread of the coronavirus among the population in order to save lives. The effort is so important that governments have issued emergency protocols and even enforced surveillance technology to ensure that social distancing rules are followed.

Many remain in full or even partial lockdown within their homes or cities. States have even closed borders refusing to allow entry in hopes that this will slow the spread of coronavirus. Suddenly, our worlds have changed around us and forced millions to re-think their daily lives from how they work to how they shop for things essentials.

We know from history that the short-term actions taken in response to any global or even local crisis tend to have a lasting effect on our society. Our “new normal” is actually quite literally our new normal because our view of normal has been forever altered. Manufacturers who embrace and take action based on this new normal will be the ones who come out on top in the end.

Covid-19 The Short-Term Actions on Manufacturers

Source:efficioconsulting.com

As mentioned above, the short-term actions embraced during the pandemic (in homes, public, and even in places of employment) are going to have long-term effects. Before we can truly understand those effects though, we need to first take a look at the short-term actions taken to control the spread of the virus.

In fact, Covid-19 has affected manufacturers in quite a few unexpected ways. The demand for certain products has soared as people purchased them in panic. Simultaneously, the ability to make more of these products (supply) plummets because fewer workers are available and allowed into the facility at the same time.

While some manufacturers are experiencing a boost in demand for products, others are experiencing devastating drops in demand for their goods and services. Regardless of the product, every manufacturer is now facing unprecedented challenges across the board in regards to continuing daily operations in manufacturing.

Now, manufacturers have to wrestle with new and not-so-exciting changes that have come about because of the short-term efforts to slow the spread of Coronavirus around the world. Social distancing, for example, is a pressure that manufacturers have to struggle with.

Consider for a moment that in manufacturing, six feet of distance might create a new problem regarding employee safety. Further, between 40 and 50% of manufacturing employees will not be allowed to perform their on-site functions. Of course, some of these employees may be able to work from home, especially if they have an office job, but the majority of the work undertaken in a factory is simply not suited to remote locations.

Source:mckinsey.com

The Long-Term Issues

While many of the trends that will emerge after the Covid-19 pandemic begins to subside had actually started long ago, these trends will certainly be sped up a bit by the emergence of the pandemic. Many will say that US manufacturing will never be the same again. Some companies, such as become.co, are offering solutions for some of the problems that emerge as a result of Covid-19.

Some of the trends that will begin to emerge are:

  • Re-emergence of Domestic Manufacturing

The U.S. relies heavily on supplies imported from other countries. However, during this time of isolation, we are seeing a significant difficulty in sourcing some of those goods which cause a problem for our supply lines. While it is certainly less expensive to purchase these goods elsewhere, being unable to find them is a serious issue.

Because of this, we will likely see a significant uptick in U.S. manufactured goods that we have not seen in quite some time. Considering that many of these goods are necessary for the survival and sustainability of the U.S. citizens, the government is certain to provide a significant amount of support to fill this need within the border of the country.

  • Supply Chains will be Decoupled

The chain of supply has been critically affected in the U.S. manufacturing sector. In fact, companies that relied on suppliers who are located in South Asia are experiencing a critical shock in their ability to receive continuous and reliable supplies.

This issue has brought awareness to the need for a reliable and diverse group of suppliers who exist across the globe rather than in one small area. On the other hand, suppliers will benefit from a more diverse base of clients as well in the event of another catastrophic event.

  • Investment in Digital Technologies

We can clearly see that companies were going to continue investing in enhanced technology for a variety of reasons. However, the pandemic has made companies highly aware of their technological deficits during a time of isolation and uncertainty.

If nothing else, one of the long-term effects is that companies will continue to invest in products that increase productivity and profit. These products, more often than not, involve complex software that companies can use to make complicated mathematical predictions.

  • Working From Home

Source:youmatter.world

Manufacturing requires quite a few employees to be present during a working shift. In fact, most plants require multiple employees to run machines and even need maintenance workers constantly on the clock in order to make sure machines are functioning properly. There is simply no way for manufacturing companies to move entirely to remote work.

However, much like in any other business, there are a number of jobs that can be completed in a remote location. Office jobs, management, human resources, etc. Many of these jobs will be moved to remote positions, another technology shift that was likely to eventually happen either way.

Final Thoughts

When there is a global crisis, society experiences shifts in the way they think about home, work, politics, and even family. These shifts are usually meant to be temporary, but often they wind up having lasting effects on our world.


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