Can you ‘lift and shift’ your business in response to challenges like Covid-19?

On March 16, less than a week after it declared the Covid-19 outbreak a pandemic, the World Health Organisation (WHO) announced it was joining forces with the International Chamber of Commerce to mobilise the global business community.

“All businesses have a key role to play in minimising the likelihood of transmission and impact on society,” the two organisations said in a joint statement. “Early, bold and effective action will reduce short-term risks to employees and long-term costs to businesses and the economy.”

This collaboration will be welcome news to many business leaders, who are dedicated to protecting worker safety and ensuring business continuity, at a time of great uncertainty and against a constantly changing backdrop of new developments and emerging insights. To help them in their decision-making, the WHO and ICC will be issuing regular advisory updates to the ICC’s worldwide network of 45 million businesses and surveying its members in order to map the global business response to the pandemic.

In the manufacturing sector in particular, these measures tally closely with what executives say they need, according to a recent survey from the National Association of Manufacturers - trustworthy health information and reliable guidance on what other firms are doing. But more than three-quarters (78 per cent) of the survey’s 588 respondents still expect the uncertainty created by Covid-19 to have a negative financial impact on their business. More than half (53 per cent), meanwhile, anticipate a change in their operations in the coming months as a result.

To understand what those changes might – or should – look like, it’s worth reviewing the economic impact that manufacturing businesses have felt so far during this crisis.

Initially, the economic shocks were primarily supply-chain related. During January and February, factory closures and paralysed container ports in China caused exports to plummet, leaving manufacturers in other parts of the world facing long waits for vital parts and materials. While there are signs that productivity in China has started to rally, trade experts have warned that delays and shortages are likely to continue for some time.

According to an early March survey from the Institute for Supply Management, nearly 75 per cent of companies polled reported supply chain disruptions in some capacity due to the coronavirus outbreak. Almost six out of ten (57 per cent) noted longer lead times for tier-1 China-sourced components, with average lead times more than doubling compared to the end of 2019. Notably, 44 per cent said they do not have a plan in place to address supply chain disruption from China - perhaps making this a good place to start with operational changes, supported by new technologies.

In March, many manufacturers were forced to contend with their own shutdowns as the virus spread to other regions of the world. In Europe, several leading automotive OEMs have been forced to temporarily close their factories including Fiat Chrysler, Renault and Peugeot.

In part, that’s because vital components from China aren’t arriving on time, but it’s also because workers are being ordered to stay at home - in the hard-hit industrial hub of northern Italy, for example. This strongly suggests a need to make manufacturing a more ‘lift and shift’ affair, where possible, so that work can be diverted to teams working on sites in other regions. 

Finally, many manufacturers anticipate a profound demand shock further down the line, as consumers reign in their spending sharply, in response to the social distancing that involves extended periods at home and curtailed working hours. Economists are watching the situation in Europe and the United States with concern, for signs of a global recession. Either way, manufacturers may need to keep a close eye on demand patterns and tweak production schedules in the months ahead.

Despite these impacts, and a rather negative outlook, there is still much manufacturers can do to cope better in the current situation - as well as prepare for others that may arise in future.

After all, ‘expecting the unexpected’ is already a proven strategy for success in manufacturing, where carefully laid plans can quickly and easily be thrown off-course by an extreme weather event, a trade war, a labour dispute, a supplier bankruptcy or, indeed, a global pandemic.

Fortunately, modern technologies provide several ways for manufacturing companies to mount rapid, robust responses to the challenging situations that arise in a crisis.

With cloud technology, vital data is held in a centralised location, accessible to all authorised users, regardless of their individual location. In a time of crisis, that means that manufacturing-firm employees can work together to tackle issues that arise, such as supply-chain shocks when a supplier is unable to deliver. In this case, a software-as-a-service (SaaS) design and management platform can provide a secure solution for staff to collaborate on designs, and reallocate engineering resources to get projects completed and keep a record of what decisions were made, and why – all from a web browser. With a SaaS subscription model, new users can be added and be up and running in minutes, and the number of seats can be scaled up or down, according to requirements.

If manufacturing processes needed to be shifted from one site to another in response to a crisis, augmented and mixed reality (AR/MR) solutions are a valuable weapon in getting workers up to speed on unfamiliar tasks or processes. The latest applications allow experts to make a video of themselves performing a work task via an AR/MR headset, in which they explain what they are doing, step by step. Once the procedure has been captured in this way, it can be edited, enhanced and then shared with employees who need to learn that task. At Sysmex America, a manufacturer of clinical laboratory equipment, lab technicians are guided through daily set-up procedures for blood-sample analysis machines. This capability allowed the company to provide a remote service offering to approximately 66 per cent of its total customer base, resulting in maximised instrument uptime and service efficiency.

When business travel is discouraged or out of the question, and field staff might not be able to support products locally, technology increasingly provides a way to deliver trouble-shooting services remotely. Remote-assistance applications can allow two people in different locations - a remote expert and a factory-floor engineer, for example - to share a live, real-time view of the same environment, such as a malfunctioning machine. Each participant can mark up that view with simple annotations to highlight an issue or suggest the next check or adjustment that should be made. Japanese automotive giant Toyota, for example, uses Vuforia Chalk to ensure that regional staff and subcontractors install and maintain production lines correctly and safely.

In conclusion, while things may feel pretty volatile right now, it’s never too early for manufacturers to start thinking about what measures might be taken to alleviate immediate problems and be more prepared to prevent them in future.

As the authors of a recent article in the Harvard Business Review point out: “Covid-19 is not a one-off challenge. We should expect additional phases to the current epidemic and additional epidemics in the future.” They continue: “Preparing now for the next crisis (or the next phase of the current crisis) is likely to be much more effective than an ad hoc, reactive response when the crisis actually hits.”

Nick Leeder CEng MIET is vice-president, digital transformation solutions – field at PTC. During the current coronavirus crisis, PTC is offering its support to the manufacturing community worldwide by making its Vuforia Chalk remote-assistance platform freely available to any organisation that requires help in dealing with the challenge of closed-down offices and factories.