I write this from my home office in early May, and what I wouldn’t give for a crystal ball.
COVID-19 is the all-consuming driver of every discussion, business or otherwise. We say things like “we’ve never seen anything like this” and it’s no exaggeration. We hope for a light at the end of the tunnel, but it’s a long tunnel.
As we’re bombarded with news of both the human and economic toll of COVID-19, it seems we cling to the flecks of light that filter through the cracks. I was heartened to see that many manufacturers offered silver linings amidst the daily grind of virus updates. Between some businesses donating PPE to medical facilities and others engaging in a complete pivot in order to produce supplies like masks, ventilators and hand sanitizer, our industry, in many ways, contributed to the feeling that we are all in this together.
It’s a good reminder that, while much of the business world impatiently idles, there are some unique opportunities facing manufacturers.
And we’d be remiss if we didn’t acknowledge the opportunity inherent in today’s catastrophic business situation. A recent Thomasnet survey of manufacturers said that 60 percent had experienced supply chain disruptions, and 28 percent were already seeking to replace international supply partners with domestic ones.
Pwc recently detailed some of the alternative sourcing strategies they see companies taking already, with some going so far as to redesign products in order to take advantage of parts and materials that are available. Others attempt to shape demand, says the report, by “offering a discount on available inventory in cases where supply may be short for late winter-early spring fulfillment, optimizing near-term revenue.”
Pwc adds that, outside of this firefighting, there are long-term changes that will likely take place as they try to rebound from a challenging “on-the-ground understanding of how far this has progressed.
This means taking a hard look as the dust settles. Says Pwc, “Companies should understand their supply chains more deeply and in more dimensions. The COVID-19 outbreak is likely to result in longer-lasting reconfigurations of supply chains to build resilience, and this is already under way as some US companies diversify Asia operating models in response to shifting trade policies.”
It’s this phenomenon that means some businesses will have several action items: (1) make supply chain optimization a priority in order to mitigate risk in an ongoing fashion and (2) look for opportunities to support companies who suddenly have a need for a domestic source of goods.
We learned from the Great Recession that our businesses needed some modifications, and many carried with them lessons learned relating to Lean cost-cutting measures and risk mitigation for the long term. Take this opportunity to assess the opportunity. We don’t need a crystal ball to know that we can always strive to be more agile in order to limit disruption for future challenges.