The Long-Term Impact of COVID-19 on Production Manufacturing

The long-term impacts of COVID-19 on production manufacturing for small businesses.Production manufacturing will never again look like it did before COVID-19. If there is one thing that history has taught us, it’s that short-term interruptions lead to long-term fundamental shifts. Never before has global manufacturing been halted simultaneously. It was as though overnight manufacturing came to a screeching halt and supply chains began to buckle. These are unprecedented times filled with both uncertainty and, if you look closely, opportunity.

“You never want a serious crisis to go to waste. It provides the opportunity to do things that were not possible to do before.” -Rahm Emanuel

Long-Term Effects on Production Manufacturing

For years now manufacturing has been undergoing some major shifts, however the COVID-19 pandemic has propelled these changes forward with new urgency.

Automation, AR & VR

There has been a real push to adapt more cutting-edge technology into manufacturing plants to make them more efficient. “A recent survey of manufacturers shows that 56% of those polled said they have implemented some form of AR/VR technology into their organization over the last 12 months. Another 35% said they are considering doing so. More than a quarter, 27%, said they have fully deployed an AR/VR solution and are looking to scale further.” (Design News)

Manufacturers understand the need to stay up to date on technological advancements and that there is a significant boost to production when implemented. Nearly a third of all companies polled (29%) said they are realizing more than a 25% increase in productivity efficiency. Additionally, more than half (61%) said they are realizing as much as a 20% savings in costs as a result of leveraging AR/VR technologies. (Design News)

Domestic Manufacturing

“Western countries that have become so reliant on off-shore supplies for basic needs are now seeing the downside of decades of off-shoring production. In an effort to reduce the cost of everyday goods, Western manufacturing lost the ability to produce the necessities for combating the current pandemic.” (Industry Week)

We are going to see reshoring taking place at a much faster rate. While there was already momentum to move production manufacturing home, COVID-19 has shown us how important it is to make this shift. Even if companies cannot move their entire operations home, they can start building partnerships to help diversify their supply chain to make sure that business doesn’t come to a stop once again.

Flexible Supply Chains

On one hand, businesses are going to look into making their supply chains more resilient to these types of global shocks. On the other hand, suppliers and manufacturers are going to look into diversifying their client base with more localized companies across geographies. Never before have we been presented with a global pandemic that has made such a fundamental shift in the way business is conducted.

“As governments and multi-nationals seek better insights into the complexities of supply and distribution chains for critical goods, digital tools will help better inform policy and business decisions. Greater visibility and coordination across the supply chain will enable better collaboration with a wider base of suppliers, ultimately driving decoupled, highly efficient—and more resilient—supply  chains.” (Industry Week)

What does this mean for startups and small businesses?

All of this means one thing, opportunity. There is opportunity for startups to work with manufacturers that may have once not been interested in a partnership with a smaller company. Manufacturers are realizing that diversification is key to long-term survival and success.

Startups that are just going into the product manufacturing phase of product development are going to want to start by looking close to home for a partner. International site visits are not exactly easy at the moment and the risk is too high to visit huge manufacturing hubs, so domestic manufacturing could be the right fit.

We all have tossed around the phrase “new normal” due to COVID-19, but when it comes to business and manufacturing that is exactly what is taking place—a fundamental shift to a brand new normal. Production manufacturing has changed for the long-term, and quite possibly for the better.

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March 2024

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