Manufacturing in the New Normal

The manufacturing industry has been described as being at the dawn of a Fourth Industrial Revolution (4IR), the early stages of an era of technological innovation in production and efficiency. Of course, this was before the days of COVID-19 and the seemingly endless havoc it’s wreaked on our economy. Second quarter GDP data released by the U.S. Department of Commerce reported a nearly 33% decline on an annualized basis, the worst drop in 100 years. The coronavirus pandemic threatens manufacturing viability in the most basic ways: factory closures due to exposure or outbreak, supply chain disruption, low demand or low production, and financial liquidity issues. Now, we’re struggling to find our way amidst a seemingly never-ending sea of uncertainty and left wondering what could possibly help bring us to the other side of the new normal.

The keys to overcoming the present hurdles that face manufacturing will stem from understanding and adapting to those challenges – and the industry’s foremost priority should be the protection of its workforce. To accommodate safe labor environments, some manufacturers are engaging flexible staffing levels or optimized crewing schedules, which take production ramp-ups or slowdowns into consideration, as well as physical distance requirements and necessary cleaning procedures. Slowdowns in production also provide critical opportunities for the design and implementation of digital capabilities and technological resilience strategies. Increasing reliance on digital solutions will augment manufacturers’ flexibility and reliability beyond just the current state of disrupted operations, but also in unencumbered operations. Appropriately mapping out the disruptions that have been created as a result of workforce, supply chain or financial issues will be a crucial step in maintaining and regaining 4IR level agility. Implementing swift and measured solutions will prove invaluable to propelling manufacturing beyond the pandemic.

So how is manufacturing currently holding up in the wake of the largest economic catastrophe in decades? Well, the good news is there’s hope. According to a survey by the Institute for Supply Management released in August, the index of national factory activity reached 54.2 in July, up from 52.6 in June (anything above 50 is indicative of growth). In addition to increased factory outputs, in early September, the Bureau of Labor Statistics released updated manufacturing job opening numbers for July. According to the report, the industry saw a whopping 408,000 jobs open up in the month, an increase by a margin of 60,000 over June and the best numbers posted since before the beginning of the pandemic.

While these figures appear promising, there’s still a long road to recovery in all industries and sectors. The full impact of this crisis will most likely not be known for years to come and a return to a sense of normal familiarity will likely also take years, but if manufacturing continues to understand the challenges it faces and adapts to meet those challenges, we’ll continue to excel.

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

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