Will Manufacturing emerge a winner in a post Covid world?

This is a second in series of posts that I will be authoring relaying my thoughts on Covid impacts on key strategic areas including industry, governance and societal issues. My first post on the topic addressing the Covid impacts on the Future of Governance can be found here: https://www.dhirubhai.net/pulse/covid-19-future-governance-rajesh-devnani/?trackingId=iCLZ3Vj2o%2BLEmcz%2F47BhYg%3D%3D

Former White House Chief of staff Rahm Emanuel once said ‘You should never let a serious crisis go to waste’. The past few months Covid-19 crisis has been brutal for the entire Manufacturing sector worldwide (with the possible exception of essential goods) and over 75% of the world’s manufacturing output is severely impacted. As the Manufacturing sector gradually attempts to limp back to normalcy, will the Manufacturing sector translate this crisis into an opportunity and change the complexion of Manufacturing, or will we perpetuate the status quo of siloed one-off initiatives and the pilot purgatory and let this crisis go to waste? In short, will Manufacturing emerge a winner post Covid-19?

The Manufacturing sector had always played a pivotal role in the growth of the world economy. It has been the original driving force behind globalization and world trade. Starting from the early days of the Industrial revolution, it has been an economic force multiplier in promoting job growth in other sectors of the economy. Even during the current crisis, the crucial role of Manufacturing is clear manifest in it keeping the essential commodities and food supply chain humming along, albeit with challenges.

Manufacturing had already shaken up its stodgy image and was on a renaissance path enabled by Industry 4.0 tenets. Digitalization of the entire manufacturing value chain was on ascendancy. That was before Covid-19 struck and shuttered factories worldwide and brought everything to a grinding halt. As manufacturing activity gradually gets back on-stream post the lockdown phase, it is time to ponder on whether Covid-19 will be the catalyst to alter the course of Manufacturing sector forever.

There is a silver-lining amidst the Covid-19 clouds. From the adoption of innovative technologies for enabling plants to build confidence & restart operations in a safe way to setting manufacturing on a futuristic path, Digital will be the key to future success. The initial impetus is surely on technologies like Digital Surveys, Contact Tracing apps, PPE/Handwashing Compliance, Social distancing risks etc. which mitigate the immediate risk and get shop-floors back in action. The trend towards large-scale digitalization in Manufacturing is however expected to accelerate and according to a recent Forbes report, the progress envisioned on this front for the next 5 years may get crunched into the next 18 months. What SARS (2003) did for the rise of E-Commerce by catapulting it from a fledgling industry to its current prominence, Covid-19 can potentially do for the accelerated adoption of Digital in Manufacturing.

Manufacturing has traditionally been a contact sport. The sheer adrenalin rush for managers/supervisors to be on the floor, resolving bottlenecks as they emerge, making decisions on the fly and watching machines & humans  orchestrate to churn out products & components by the millions was par for the course. The aftermath of Covid-19 coupled with the looming threat of a second wave will change this reality forever.

Manufacturing would adapt through rapid adoption of Digital technologies. ‘Digital Gembas’, ‘Virtual shifts’, ‘Autonomous Planning’ etc. are set to become part of the everyday lexicon of manufacturing as we make rapid progress towards the ultimate vision of ‘lights-out manufacturing’ where machines work in close lockstep and unison with each other and without the human in the loop.

The adoption of automation capabilities & advanced robotics to increase production flexibility is about to gain widespread traction in the industry. Production lines & shop-floor layouts will witness significant automation and change to make them configurable and adaptive to switching across products on the fly. Additive manufacturing especially for hard to source critical components, which are amenable to 3-D Printing will also accelerate. AI enabled Computer vision applications will gain prominence in functions like Quality and Maintenance.

The era of super-specialization of labor originating from its early roots in the assembly line revolution at the turn of the last century will also be a phenomenon in the reverse. To mitigate the impacts of Covid-19, densely populated shop floors & assembly lines where workers jostle elbow to elbow will literally need to lean out physically and this will call for workers to multiplex. This will have implications for cross-skilling workers for managing multi-skilled work within independent segregated worker pods. Digital workforce learning, Digital SOP compliance tools and Augmented Reality based Remote Operations & Diagnostics support technologies will move towards mainstream adoption.

The current Covid-19 crisis has also exposed severe vulnerabilities in existing Supply Chains/networks. Supply Chain resilience and flexibility will become a key mantra. AI enabled scenario planning & analysis to surface key supply chain risks and plan proactive mitigations will become an imperative. Global supply chains will reconfigure to build resilience through regional/local hubs and eliminate failures attributable to single sourcing. The focus will gravitate towards multi-sourcing (including insourcing & localization) and complexity reduction through product portfolio rationalization in existing global supply chains. The traditional techniques of Supply Chain Planning heavily reliant on historical forecasts do not apply anymore. An adaptive Supply chain driven by Autonomous Planning leveraging a cross-functional Supply Chain Control Tower is likely to emerge fast to address the new realities.

In closing, the opportunity to truly transform the manufacturing sector and create a lasting impact is ripe. Manufacturers must seize the opportunity by first prioritizing Digital initiatives that enable management of hot button topics associated with PPE & hygiene compliance, social distancing, contact tracing, thermal screening etc. to build employees & community confidence. Covid-19 despite its deleterious impacts is a wake-up call that can transform Manufacturing through adoption of a strategic, comprehensive & accelerated risk-mitigated Digital Transformation roadmap. Manufacturing can be a winner in the post Covid-19 scenario if it can adopt digital in an agile manner to achieve the desired resilience at scale and resurrect its critical role in shaping the global economy and trade.