There is no doubt that the covid-19 pandemic has had a profound impact on the manufacturing sector. With non-essential factories ordered closed to control the spread of the virus, companies are being forced to cut costs and reduce their production capacity, causing another level of disruption in the global supply chain.
A sustainable manufacturing sector after covid
Key countries for the global flow are of course the US, which attributes a large part of its GDP and employment power to the manufacturing sector. The effects of covid-19 cannot be ignored, but there are tricks to remain competitive. It is just a matter of making rational decisions and adapting to the challenges posed by this global health crisis. So, what developments will ensure the survival of manufacturing after the pandemic?
The need for offshore activities
The pandemic led to increased offshoring as companies were forced to move their operations to countries less affected by covid-19. Certainly, investors and business leaders will need to consider the immediate challenges that coincide with the shift to offshoring. Higher logistics costs, agreements with local stakeholders and the development of new international policies are some elements that should be taken into account when making decisions on offshoring.
However, the impact of covid-19 will depend on the unique characteristics of each sector. For example, key players in the pharmaceutical manufacturing industry, among others, are expected to move to East Asia because several countries there have had great success in limiting new cases and deaths.
Investments in new technologies
Like any disruption, the pandemic underlines the value of embracing new technologies. It took a pandemic to highlight the need for manufacturers to acquire new tools and improve the skills of their current workforce to reduce risks and ensure long-term profitability. In addition to dry bulk material handling equipment and automated package loading systems, manufacturers should also look to adopt cloud-based systems, improve cybersecurity and use predictive analytics for equipment management. Such technologies can add value to companies looking to reduce the impact of pandemics on their bottom line.
Ultimately, the survival of the manufacturing industry will depend largely on how governments negotiate the risks and disruptions caused by the pandemic. Across the world, countries have already rolled out billions in stimulus packages to support local industries. Larger manufacturing companies are certainly being encouraged to help with covid-19 efforts by supplying other companies and refocusing their production towards personal protective equipment, disinfection solutions and other goods that can help protect the medical frontline and ensure the supply of essential products.
Things are still uncertain, but the fact that the manufacturing sector is standing strong despite this crisis tells us a lot about the future of this important industry.