COVID-19 has completely disrupted the entire manufacturing industry. The demand for products has changed drastically. Many manufacturers are getting an increase in orders from one business and a significant decrease from others, affecting relationships with suppliers and customers.

Many manufacturers have changed focus to help create and build essential items to help others during the pandemic. Others are changing their business processes in order to prepare for future needs. Each and every manufacturer is trying to keep its workers safe from coronavirus.

Challenges Manufacturers Are Facing

Health Concerns 

Manufacturers’ main concern is the health and wellness of the people who work for them. There has been an increase in the need to find a balance between keeping factories running and not putting employees in harm’s way. This means leaving longer periods between work shifts and switching to remote processes wherever possible.

Demand Changes

Manufacturers have seen a shift in how much demand they are receiving from other industries. Automotive and energy sectors have decreased their demand while cleaning chemicals, and medical and personal protective equipment has seen a significant uptick. Unfortunately, most other industries have businesses that have low demand.

This means that supply chain breakdowns have become a challenge for the manufacturers and the businesses themselves.

These demand changes have resulted in factories having inventory that they cannot distribute, even though many of them have reduced production and capacity. 

Factors Manufacturers Should Monitor

Manufacturers can predict future demand by looking at the purchasing managers index from the Institute for Supply Management to understand industry insights about inventory and production. They can also track housing stocks, building permits, and more. Unfortunately, manufacturers will still have a difficult time gauging future demand as the situation continues to develop.

Manufacturers should also track orders, inventory, and their own numbers. Demand is expected to rebound later in the year for some industry, which means that products that aren’t selling now will have a huge uptick in demand in the later months. It’s important for those manufacturers to continue to create inventory.

Steps Manufacturers Should Take ASAP

Many manufacturers have shifted gears to meet the demand for personal protective equipment. This has worked well for those in related fields who have been able to retool their existing facilities. However, it would have been a challenge for many manufacturers to completely change their production processes to meet these needs.

The most important step manufacturers can take right now is to consider their employees and how they will be positioned when COVID-19 eases and ends. With many factories in a competitive employment market already, now it will be more important than ever to retain their talent. 

Another key step is to make sure the customers will be able to pay for their orders after a major decrease in demand over the past few months. It's important to protect liquidity by taking a second look at payment terms and making changes that will ensure proper, timely payment.

Manufacturers with concerns about liquidity should check with their banks for information about government resources. They may also want to consider getting loans in order to make it through the next couple of months.

What Will Manufacturing Look Like After COVID-19?

Because the manufacturing industry was affected throughout the entire world simultaneously, many have struggled to meet demand driven by panic buying. As mentioned previously, others have experienced a drop in demand. With every manufacturer experiencing disruptions like never before, it’s important that workers who are able to can continue to work remotely. Unfortunately, many factories are not currently designed to be managed in such a way, lacking the digital tools and infrastructure necessary. Manufacturers now know that they must be prepared for anything, which means getting employees who can work remotely the right technology to do so in the future. 

It will be difficult for manufacturing companies to look into the long-term with many issues existing right now. However, it’s time to look beyond the current problems to the future. There are a few trends that were already starting to take effect before the pandemic, but now is the time for manufacturers to take them seriously. These include:

• Automated Domestic Manufacturing
• Decoupling of Supply Chains
• Data Infrastructure 
• Digitization
• Remote Work 

The global health crisis has given rise to fundamental shifts affecting the manufacturing industry. It’s important for manufacturers to understand which parts of the business environment will continue to evolve as the pandemic eases. Now is the time to prepare for the new normal after COVID-19. 

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