How COVID–19 Will Affect the Manufacturing Industry
How COVID–19 Will Affect the Manufacturing Industry
It feels like COVID–19 brought the whole world to a halt in the space of a few short months. Aside from essential workers who are just about keeping the world spinning on its axis, activity in most every major industry had halted.
The manufacturing industry has been no exception, but with manufacturing giants in China and parts of Europe now starting to wake from their brief slumbers, the industry as a whole is going to have to adapt quickly to operate successfully in this new and changed landscape.
Adding new safety gear on top of hard hats and safety goggles is an obvious place to start, and many jobs in the manufacturing space already require masks.
But how will crowded warehouses be able to function at full capacity if employees are forced to stay 6ft apart?
And how will manufacturing companies that live and die on efficiency and speed of delivery cope with the inevitable new rules, regulations, and technologies that will be required for their employees to work together safely?
It isn’t just manufacturing, either. Right here in Las Vegas we have the new Raiders stadium 99% completed. Projects like these require hundreds of people to work in close proximity day after day – how will construction companies keep their people safe while still delivering within budget and on time?
I’m not claiming to have the answers to any of these questions, but there’s one thing I’m pretty certain of – the manufacturing industry will adapt. It always does.
Through the industrial revolution, the world wars, even the emergence of the silk road – the manufacturing industry has shown remarkable tenacity in continually reinventing itself as the world around it has changed.
And now the world has changed again.
How will the manufacturing industry adapt this time?
Social distance-friendly workspaces
Will social distancing be required in warehouses? Whether by spreading manufacturing equipment further apart or by introducing minimum space requirements for staff in warehouses, we’re going to need to find ways of putting a little more distance between workers in factories, warehouses, and other facilities. What impact this is going to have on workflows and facility capacity is going to be an interesting challenge for companies to deal with.
As a commercial real estate broker, this could have huge implications for my industry – social distance-friendly buildings are going to have to be big.
Air purification systems
A few minutes research online was enough to tell me there is a lot of conflicting information out there about whether or not COVID–19 is airborne, and whether air purification systems like HEPA and PECO might be able to help stop its spread.
That said, there is some evidence to suggest this might be the case. If so, HVAC systems and other building ventilation technologies could have a part to play in reducing the spread of the virus in crowded facilities.
We’ve been hearing about the rise of robots and other automation technologies in the manufacturing industry for a good while now, and COVID–19 is likely to accelerate adoption even further.
After all: you can’t catch corona from a robot (that is, unless you really, really like robots).
The headache of social distancing measures, additional safety equipment, and other transmission-prevention protocols all melt away into nothing when all your employees are made of metal.
It’s a proposition some manufacturers will find too hard to resist.
People working in the service industry in Last Vegas are already required to obtain ‘health cards’ before working anywhere that handles food.
At the moment, these cards are more about demonstrating certain standards in food hygiene awareness than proving the health of their owners, but it’s easy to imagine the scope being extended.
It’s a fairly controversial idea, and one that could lead to a whole bunch of new problems.
I think an increase in health and safety protocols is pretty much inevitable as more and more people go back to work. But what’s going to be particularly interesting is how these new regulations are mandated.
Will it be left to companies to come up with their own policies for employee safety? Or will the government step in with blanket guidelines, perhaps even turning them into law?
So many decisions in the manufacturing industry are driven by a constant desire for cheap, cheaper, cheapest.
Over the years, this has led to aggressive offshoring in most every industry to help reduce labor, materials, and utilities costs.
But if COVID–19 has shown us anything, it’s that these global supply chains and just-in-time delivery systems are a little more fragile than most of us would have thought.
We’ve had a glimpse of what might happen if global supply chains suddenly get snipped, and it wasn’t pretty. I think we’ll see a strong onshoring trend as we emerge from this crisis, particularly for essentials like pharmaceuticals and food produce where ‘we should be getting something in next week’ isn’t going to cut it.
Costs will naturally go up, but I think people are willing to pay a premium to feel they’re getting better quality and more reliability. Not to mention the jobs that will be created for Americans in a time when we desperately need them.
Necessity, mother of all invention
I think we’re going to see a bit of turmoil in the coming months as we find a new equilibrium. But I predict manufacturing in the US will adapt and come back stronger than ever.
I’d love to see some of the big players show some leadership in this space in the meantime. The likes of VW, Boeing, Ford, and others have very, very deep pockets and world class R&D departments. Most of those companies are going to come through this crisis just fine (even if the odd government bailout might be needed to smooth the way in some cases).
The future for the smaller players is much less certain.
When we think manufacturing, we usually picture multinationals. But I work with plenty of manufacturers with 5–300 employees. Collectively, these companies employ huge numbers of people and contribute a lot to the economy, both locally and nationally. But individually, they don’t have the resources to give themselves a buffer in times like these.
If the big players share what they learn with smaller operators, it will save a lot of business from going under and get small and medium sized manufacturers producing sooner.
As much as I read about this situation, nobody knows what manufacturing will look like in 6 months’ time. But the industry has adapted before in times of need.
And it will adapt again.