What the COVID- 19 Crisis Is Teaching Us about the Manufacturing Industry
Teaching moments are seldom easy.
COVID-19 is no exception. Nothing like a global pandemic to encourage us to reexamine just about everything.
In the manufacturing industry, we’re taking a closer look at business-critical factors like supply chain, IT infrastructure, liquidity, diversification, and more.
It’s a huge universe to consider. Here are some observations on a few of those topics.
Globalization is Fragile
As observed by Foreign Affairs Magazine, “the new corona virus is shaping up to be an enormous stress test for globalization.” Globalization contributed to the rapid spread of the virus, while also fostering “deep interdependence between firms and nations that makes them more vulnerable to unexpected shocks. Now, firms and nations alike are discovering just how vulnerable they are.” Conclusion: Globalization is not a failure, but it is fragile.
Lean Manufacturing Needs to be Nimble
Lean manufacturing has revolutionized many aspects of production, and the efficiency it has conferred is powerful and valuable. Industry has devoted itself to reducing “slack” – unused resources such as stored inventory. Reducing slack saves money and increases profits. “Just in time” strategies, which discourage a stockpile of parts or products in favor of buying or producing them when the demand arises, are here to stay. However, recent events illustrate vulnerabilities. It’s clear to industry that that we need to craft our “just in time” strategies so they’re resilient to sudden, unpredicted changes such as border closures and shipping disruption – whether they’re caused by a pandemic, a hurricane, an earthquake or another unexpected event.
Digital Capabilities Are Crucial
Digital, mobility and collaboration tools have been expanding in reach and function for decades, and they’re nonetheless making quantum leaps now as essential capabilities. Navigating a new work landscape that functions remotely is no longer optional. Businesses that were already operating in the digital sphere entered this pandemic with an advantage. For the most part, businesses (and schools and government and families and churches) have performed an astonishing job in suddenly leaping online, because they had no choice. This remarkable adaptation should be applauded, and reassure businesses that rapid change is attainable.