Impact of COVID 19 on Manufacturing

Impact of COVID 19 on Manufacturing
Impact of COVID 19 on Manufacturing
ARC Advisory Group and automation.com recently conducted a web survey to gain insights into the impact of the current COVID-19 pandemic on industrial manufacturers and what they are doing in response.  ARC supplemented the survey responses with additional interviews from a cross section of industries. As we learned, the overarching goal is to keep employees (and their families) as safe and healthy as possible, while maintaining business continuity.  Here, we provide a summary of the results of that original survey supplemented with some additional insights from a second web survey performed in the interim.  From late March through the middle of April of 2020, ARC Advisory Group, in conjunction with Automation.com, conducted a web survey to gain insights into how industrial manufacturers are being impacted by COVID-19 and how they are responding to this global pandemic.  This report summarizes the results of the survey and subsequent interviews.
 
Clearly, no company is immune to the impacts of the COVID-19 pandemic or has ever had to deal with so much uncertainty at one time in our lifetimes.   As we learned, the responses to the pandemic have been varied.

However, most survey respondents have been investigating new digital technologies and new approaches to support remote workers, increase manufacturing and product flexibility, and meeting supply chain challenges.

Clearly, no company is immune to the impacts or has had to deal with so much uncertainty at one time.   As we learned, manufacturers’  responses to the pandemic have been varied.  For example, while some manufacturers are decreasing production and furloughing workers, others are increasing, shifting, or relocating production to meet demand on the fly.  Procter & Gamble, 3M, Georgia-Pacific, BASF, ExxonMobil, Tesla, Ford, GM, ArcelorMittal, and Air Products are all examples of companies that have innovated to manufacture new products or shifted production to meet demand. Most survey respondents have been investigating new digital technologies and new approaches to be able to support remote and on-site workers, increase manufacturing and product flexibility, and meet supply chain challenges.

For example, companies are using artificial intelligence (AI)-enabled predictive software to determine relative risk based on different scenarios such as: What if the pandemic lasts three months?  Six months? Or as long as 19 months?  Other pressing questions that were addressed include: “How do we source raw materials?  What plants in what locations should ramp up production and for which products?  How do we transport products when borders have closed?  How do we keep our workers safe?  How many people will get sick?  How can we minimize the impact of COVID-19 to keep workers and their families safe while maintaining business continuity? How can we minimize on-site employees with remote access? How do we manage cash? What projects should have priority and which projects should be extended or cancelled?

Some manufacturers began the process of rapidly transforming their businesses to be able to produce critical and/or high-demand products.  For example, breweries and distilleries have switched from producing beer, wine, or liquor to trying to meet the unprecedented demand for hand sanitizers.  Paper product manufacturers have ramped up production and are managing their distribution closely to help fill the empty shelves in many retail outlets.  Automotive and electronics manufacturers have responded to government requests (and/or mandates) to produce ventilators, facemasks, and other high-demand personal protective equipment (PPE) for healthcare workers and first responders.   Pharmaceutical and medical products manufacturers have had to ramp up their production of current anti-viral medicines, plus reagents and accessories for COVID-19 test kits and develop new capabilities to quickly and safely test a large percentage of the population for COVID-19 antibodies.  And, of course, pharmaceutical manufacturers – working in close  conjunction with government agencies and academia – face tremendous pressure to fast-track development, approvals, and large-scale production of an effective COVID-19 vaccine.  All while dealing with a depleted workforce and major disruptions across the global supply chain.

As we learned, some companies were better prepared with well-thought-out disaster plans.  We learned that cross-training of work is important to help overcome the new workforce challenges and that those companies that wish they had done more cross training before the pandemic, are doing so now using on-line training for remote workers.

We learned that some manufacturers wish they had put more thought and effort into the digital transformation prior to the COVID-19 pandemic.  But many of these companies have since adapted and are now adding new digital technologies and digitally enabled solutions as opportunities arise.   The ability to readily share and analyze operations and supply chain data remotely, for example, has been critical in some industries, since those data and analyses can now be used to enable collaboration and help make the best data-based production and supply chain decisions quickly, even in real time.   Most companies, even those with solid contingency plans in place, are operating and making changes and policy updates daily on the fly.
And when people start to return to work, COVID-19 will still have a profound impact on business, operations, the supply chain, and IT.  This will continue until an effective vaccine is developed and deployed at scale, early contact tracing efforts bear fruit, and/or faster and more accurate COVID-19 and antibody tests are developed.  Some of technologies and capabilities that are going to be updated or transformed immediately post COVID include remote capabilities and manufacturing intelligence (digital dashboards.), cloud services capabilities, robotics (instead of repetitive labor functions), digital twins (manufacturing, supply chain, maintenance, commissioning, etc.) advanced analytics, additive manufacturing, edge controllers and more.


Impact of COVID in 2020

A more recent ARC survey revealed that the impact would be higher than originally thought although the impact is a function of the time workers are shutdown from their places of employment.  For companies that were mostly remote with less on-site employees the impact was smaller.
 

The most interesting survey responses were for an open-ended question about what their companies are doing or would do differently in the future relative to processes, people, and technology.    We received numerous comments as summarized in the chart below. 
 

Impact on Production 

Most respondents are providing both remote and on-site services to customers.  Over 40 percent of the survey participants are increasing visibility and intelligence in their facilities and reducing production at some plants.  Over 30 percent of the respondents cannot shut down; almost 30 percent were closing manufacturing plants located in high-risk areas.

 

What Have Companies Been Doing to Cope

ARC has found that while no company was unaffected, the more digitally enabled companies appeared to be better positioned to operate more effectively during the global pandemic.  Most companies wish they had done better contingency planning prior to the pandemic, although ARC has spoken with manufacturers who had spent time developing excellent disaster plans and have been able to use these effectively during the pandemic.  

Most companies are cash strapped right now and many projects have been re-evaluated, re-prioritized, extended, or postponed.  However, critical projects or projects that allow more workers to work remotely have been prioritized and are being completed.

ARC has found that while no company was unaffected, the more digitally enabled companies appeared to be the better positioned they were to operate more effectively during the global pandemic.  Most companies wish they had done better contingency planning prior to the pandemic, although ARC has spoken with manufacturers who had spent time developing excellent disaster plans and have been able to use these effectively during the pandemic.
 

ARC has found that while no company was unaffected, the more digitally enabled companies appeared to be the better positioned they were to operate more effectively during the global pandemic.  Most companies wish they had done better contingency planning prior to the pandemic, although ARC has spoken with manufacturers who had spent time developing excellent disaster plans and have been able to use these effectively during the pandemic.


Within our critical manufacturing infrastructure, operations groups are working to implement remote operations technologies that can minimize the risk of spreading infection among the console operators working in close physical proximity in (often) recently consolidated control rooms.  While this could certainly help reduce the spread of infection among console operators, technical issues remain to be overcome and robust, interactive video capabilities will have to be implemented to maintain a degree of collaboration among the operators, process control supervisors, and engineers should an upset situation arise.To minimize the potential risk of operators becoming infected while outside the plant and then bringing it back inside with them, some plants (such as grid operators) are making provisions for operators to sleep on-site.

Robotics are being installed in some plants.  Workers are social distancing using physical distance and barriers such as plexiglass.  Cells have been added in some production plants to separate workers.  Most respondents stated that they wished they had done more to enable remote workers.  Some companies are upgrading and adding new software, mostly to support maintenance but, in a few cases,  to add new IoT hardware and software to accommodate new manufacturing processes and shifting demand. 

Technology suppliers are chipping in by providing valves, ventilators, ventilator motors, ultrasonic welders for masks, and setting up new production lines in record time to be able to produce masks, face shields, solutions for vaccine or drug manufacturing.   Others are installing optimization software, AI, data analytics and, remote maintenance, asset optimization, and supply chain optimization software; some with free licenses for their cash-strapped customers.  ARC believes that in the wake of the pandemic any company that has not yet adopted cloud technologies will rapidly do so in the future.

For a more complete Impact of COVID 19 survey report see ARC Advisory Group.

 

About The Author


Janice Abel is a principal consultant at ARC Advisory Group and performs research in the areas of Manufacturing Execution Systems (MES), Operational Data Platforms/Historians, Manufacturing Intelligence and Batch Management.  Her experience extends to the transformative digital technologies such as IIoT, Advanced Analytics, AI, VR, digital twins, edge, cloud and Operator Training Simulators (OTS).  Her experience includes over 35 years of experience in helping both suppliers and end users clients develop strategic plans to adopt new gen products and transform digitally.  Prior to ARC Advisory Group Janice spent 25 years in the process automation industry.  Janice has a master’s degree in chemical engineering and an MBA.

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