A recent survey conducted by on-demand manufacturer Fictiv reported that COVID-19 has hurt most manufacturing businesses (89%) and industries.* Even with the negative business impacts from COVID-19, 97% of those surveyed said that the crisis created new business opportunities. Furthermore. those opportunities are principally related to supply chain resilience and innovation.
The survey, polled hundreds of senior manufacturing and supply chain decision makers at companies producing automotive, aerospace, medical device, robotics, and consumer electronics products. Most of the manufacturing leaders polled expect COVID to make them stronger.
Other findings in Fictiv’s 2020 State of Manufacturing Report are not surprising. The report says that digital and AI advances will remain important. And supply chains will change, but China remains an option.
Supply Chain Resilience Problems
Less than 20% reported supply chain resilience in the past year. “Supply chains are experiencing unprecedented shocks from the years in which trade and tariff headwinds drove roller coaster waves of supply and demand and now we’ve thrown COVID-19 into the mix,” stated the report.
Even though 99% of the companies surveyed said that supply chain resilience is a top priority, the report suggests otherwise. It says that “the industry hasn’t learned much from years of practice” with supply chain shocks that should have to lead to more progress on resilience before the pandemic hit.
Other Negative Impacts
Along with the expected drop in sales (44%), manufacturers reported an increased cost of materials and components (41%) and lengthened production lead times (41%). The same proportion saw product launch delays, and (36%) reported having to lay off good employees.
Only 24% reported they have been unable to fill customer orders. While11% reported that COVID-19 has not negatively impacted their business.
Positive Business Impacts from COVID-19
The report identified supply chain resilience opportunities as the primary positive impact from COVID-19. In addition, digital transformation looks to be an effective way for many businesses to address innovation and supply chain resilience opportunities in the wake of the pandemic.
The report cites remote collaboration tools, digital manufacturing platforms, research and development laboratories, and supply chain forecasting technology as the largest investment targets for digital transformation efforts.
Fictiv asked about business opportunities identified because of COVID-19. Then, 45% reported their leadership team was inspired to innovate to meet the changing environment. A similar fraction saw opportunities to rethink their supply chain to be more resilient.
Likewise, 44% saw opportunities to reduce operational costs through remote work. Also, of interest, 43% saw opportunities to release new products to meet changing market demands.
Competitive Advantage Opportunity
The opportunities, if pursued, will lend significant leverage in the marketplace as manufacturing approaches the new normal. According to the report, “Companies that invest in digital manufacturing partnerships that make their supply chains dramatically more agile, predictable, and resilient will gain a significant competitive advantage in their markets.”
In addition to the positive business impacts from COVID-19, the report shows that vision and optimism are critical ingredients for surviving the crisis. “88% of our survey respondents believe that the manufacturing companies who survive COVID-19 will be the ones that saw the innovation opportunities in the mix – not just the problems,” said the report.
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*2020 State of Manufacturing Report. (n.d.). fictiv, https://www.fictiv.com/ebooks/2020-state-of-manufacturing-report