6 MIN. READ
The COVID-19 pandemic forced every industry on the planet to rethink how it operates. Manufacturing was no exception. Fortunately, there were several unique ways in which manufacturers used this crisis to adapt to an unpredictable future after COVID-19 changed US manufacturing.
Stronger, More Local Supply Chains
Prior to COVID-19, globalized economics dictated that sourcing overseas was good for business. Economies of scale and extremely low labor costs made financial sense. But there were warnings from multiple experts that a major disruption could occur in the future. These warnings were ignored in the face of the economic advantages.
In the wake of the complete upheaval of the global supply chain though, U.S.-based manufacturers were forced to make radical changes. Some manufacturers are now supporting their international supply chains with local backups. Others have decided to eschew the global chain and have reshored completely.
In fact, a full 59% of manufacturers interviewed in a recent study indicated that they had either left or were in the process of leaving China. Many of these same companies are focusing less on just-in-time cost-saving strategies. Instead, they are opting to have more margin in case of emergencies or disturbances similar to how COVID-19 changed US manufacturing.
How Manufacturers Learned to Adapt
Early in the pandemic, demand for critical personal protective equipment (PPE) spiked. This caught existing PPE manufacturers off guard. Industrial suppliers who had never produced PPE stepped in to fill the gap. They retooled their existing lines and got creative. Fortunately, they were able to ramp up and produce PPE in record time. Not only did this keep people alive, but it also kept their companies alive. The rapid adaptability kept them viable at a time when cutbacks were decimating entire sectors. Take a look at a few examples:
• Covercraft Industries.This company normally produces automotive floor mats and seat covers. Rather than stay idle during the pandemic, they brought back thousands of employees. Utilizing the same materials used in their automotive products, they switched to producing surgical gowns and face masks.
• Fanatics Inc. Easton, PA-based Fanatics Inc. makes uniforms for MLB baseball teams. They started using their distinctive pinstripe materials to make surgical gowns. Some of the gowns donated were made from material intended for the New York Yankees' new uniforms.
• Origin. When COVID-19 changed US manufacturing, additive manufacturers were able to rapidly pivot to new product lines by simply changing data files. San Francisco-based Origin normally builds 3D printers. They used these printers to make thousands of COVID-19 test swabs. At one point, they were making them at a rate of 1,500 per printer per 8 hours.
• Delve. A benefit of modern manufacturing is the ability to share designs digitally in an instant. Delve is a design firm that contributed to the production of the “Badger Shield.” They made the plans available online to other manufacturers for completely open-source production.
The "Essential" Question
Government officials arbitrarily decided what was an "essential" business and what was not. While good-intentioned, it proved that they understood little about the nature of manufacturing. The definition of “essential-ness” was based on NAICS code and could easily be misinterpreted. The codes are based on how a company defines its major mode of operation. They do not always cover every single activity or product made. Due to these decisions, some components for essential products were unknowingly deemed non-essential. The result was major gaps and disruptions in supply chains.
In one case, a business that supplies a minor component for emergency power equipment was told to shutter operations. In the eyes of officials, they were not an essential business. This made it impossible for the power equipment to get produced. However, this equipment was critical for the operation of temporary hospitals in New York. As a result, the component supplier was allowed to reopen once it was realized that they were part of an essential product.
The ripple effects of randomly selecting the "essential-ness" of a company based on NAICS code have demonstrated that no product is produced in a vacuum. Thanks to these issues, the complicated relationships in manufacturing are now better understood by the public and policymakers.
Lead Time Troubles
The lack of one tiny component can also hinder an entire industry. When COVID-19 changed US manufacturing and shutdowns rolled out across the country, new car sales were expected to plummet for a long time. Because of this, computer chip manufacturers shifted sales to the consumer appliance industry. But car sales did not stay down long. People opted to drive rather than fly, which helped boost sales. This left chip manufacturers behind the demand curve.
Because of lead times exceeding 24 weeks, they were unable to produce the extra chips fast enough. Thus, stockpiling of certain parts is no longer seen as wasteful when compared to 6-month delays. The global auto market is expected to lose $60 billion due to these shortages.
Health-Conscious Employment Practices
Before COVID-19 changed US manufacturing, companies did not require a sick individual to stay home. In some cases, people were expected to work unless they were bedridden. Unfortunately, if that employee's ailment was contagious, they risked infecting the entire staff. This risk was seen as acceptable right up until March 2020.
After COVID-19 shutdowns, businesses have a far more health-based vision of attendance. Virtual commuting and working from home are now acceptable for nearly every industry. People in manufacturing can take advantage of advances in IoT to manage functions that were unthinkable just a few years ago.
For example, remote monitoring of equipment prevents excessive trips to plants and allows for the strategic deployment of repair and maintenance personnel on an as-needed basis.
Additionally, the digital twin prediction method allows manufacturers to test virtual prototypes of products and new line configurations. These tests can be run over various timeframes without having to physically build a single part. This saves significant amounts of money and time.
Remote training allows the onboarding and education of new staff without having to meet in person as well. All of these technologies will continue to let employees who aren't feeling the best (and even those who are) be productive from home.
Lessons Learned
Although the initial upheaval and shock of the pandemic threw the manufacturing industry for a loop, companies learned valuable lessons and retooled their capabilities to meet the new demand and shift with the changing environment. From reshoring and establishing other supply chains to understanding the "essential-ness" of the industry, and from rethinking lead times to prioritizing health and safety, manufacturing has come out of COVID-19 wiser and more prepared for future disruptions.
Article Sources:
https://www.atlas-mag.net/en/article/the-risk-of-supply-chain-disruption
https://www.foley.com/en/insights/publications/2020/09/global-supply-chain-disruption-future-strategies
https://okcfox.com/news/coronavirus/furloughed-employees-back-to-work-now-making-ppe
https://whnt.com/news/coronavirus/fanatics-manufacturing-masks-and-gowns-with-a-distinctive-look/
https://www.prnewswire.com/news-releases/origin-3d-printed-covid-19-test-swabs-clinical-trial-and-validation-completed-with-beth-israel-deaconess-medical-center-301039218.html
https://www.delve.com/work/badger-shield
https://www.census.gov/naics/
https://www.industryweek.com/leadership/change-management/article/21160359/the-pandemic-made-manufacturing-stronger
https://www.cnbc.com/2021/02/11/how-covid-led-to-a-60-billion-global-chip-shortage-for-automakers.html
https://techhq.com/2020/05/how-iot-is-set-to-power-the-new-remote-work-normal/
https://www.xavor.com/blog/industrial-iot-in-remote-work-future
