Industry restarts – and resets

From working practices to supply-chain models, manufacturing companies are facing up to new ways of operating

Home Life Innovation industry Industry restarts – and resets

China is leading the way in returning to the workplace after weeks of shutdown for Covid-19 and the changes are immense. Just to gain access to the futuristic offices and tech company facilities in the Wangjing Soho buildings in Beijing, for example, you need to present not only your usual office pass but also a government-provided QR code that shows your travel history updated in real time. Everyone has to wear a mask. No one is granted entry unless their temperature has been taken and at busy times the reception area uses a thermal-imaging device that can scan large crowds to identify anyone with an elevated body temperature.

Meanwhile every company in the complex is coming to terms with new ways of working, putting space between work stations, installing barriers, implementing sanitisation, staggering shifts to minimise human density and, of course, working out how to use lifts in a world of social distancing.

Changes to the ground rules of business

Around the world, companies are now busy devising comparable protocols in the welcome effort to get their people back into factories and offices; protocols that are likely to remain in place for many months and perhaps years. Many large manufacturers, including most of the world's automotive companies, have already begun to restart production lines, rightfully stressing that their main concern is the safety of workers. Yet worker safety may prove the least of companies' challenges. Changes in the market and the structure of business operations could prove to be even more testing. The ground rules of business are changing and every business is likely to have to find its own way forward.

The biggest economic impact of the pandemic is on demand. During lockdown consumers are buying less, but they are also buying differently. Companies have already had to change their product mixes – for example, many manufacturers and retailers have shrunk their product lines, but increased their pack sizes to accommodate consumers who want to shop less but stock up more. The most agile companies – able to respond to changing consumer demand – will reap the benefits.

Firms also have to plan for a complex operating environment. Pandemic-related restrictions will not be lifted at a stroke worldwide; conditions will vary country by country. Restrictions may be eased, then re-imposed. All this means that once-seamless, cross-border supply chains that depended on predictable free movement are seamless no longer.

Building resilience

It's a time for new strategic thinking as manufacturers that have built their businesses on lean operations in the age of globalisation are having to change not just their practices but also their whole philosophy. Where once companies talked mainly about efficiency, now many are thinking about resilience. The ‘just-in-time' operating model that depends on minimal inventory, integrated relationships with a small number of key suppliers and smooth logistics has been shown to be vulnerable. Resilience means building operations that do not fail when one part of the chain is broken.

Above all, the need to accelerate the shift to automation and digitisation has become imperative. Automation is much more than robotic assembly lines: intelligent automation powered by artificial intelligence means that many tasks from design to administration, from cleaning an operating theatre to flying a drone, can be done by autonomous machines – which don't fall victim to coronavirus.

Meanwhile, digital communication through high-speed broadband and 5G mobile means that the remote working and ‘online first' model that sprang up during coronavirus lockdowns is likely to become a feature of business life which many will applaud. According to a recent survey from PwC, half of companies are planning to make remote working a permanent option for roles that allow it.

The threat posed by pandemics has long been known, but it has been little prepared for. Now that is changing. Covid-19 will eventually be tamed, but new pandemics could well follow. Since 2000 there has been a viral epidemic roughly every three years – think SARS, MERS, Ebola, H1N1, Zika – any one of which could have gone global. Companies will not want to be caught unprepared again.