COVID-19, which started as a disruption in China, is now a global pandemic, humanitarian crisis and financial meltdown.
This coronavirus has brought dips in capacity and closed some factories. China is one third of the global manufacturing volume and a massive exporter. Its purchasing managers’ index (PMI) — a monthly measurement of economic trends in manufacturing — dropped from 50 to 35.7 in February, illustrating the destructive impact of this coronavirus.
There are a lot of questions about handling the immediate response. Employee health and wellness must come first. Hygiene processes are being beefed up across factories, warehouses and offices. We are also seeing organizations implement these precautions:
- Banning travel and ordering employees to self-quarantine to limit risk.
- Restricting visitors on site, except for contracted workers. Others are restricting employee movements and using “social tracing” to track who people have been in contact with to isolate and prevent spreading.
- Running factory workers in shifts through other parts of their facilities, such as the cafeteria. Smaller, controlled shifts allow for adequate spacing per person, with cleaning crews fully disinfecting the space between shifts.
Short-term actions should not come at the expense of long-term thinking. Demand will pick up again and another significantly disruptive event will happen at some point. Consider the long game. After all, the last time capacities were idled and shuttered in response to such a significant event, the same workforces did not return.
Where can you focus and build in resiliency now versus risking a “wait and see” approach for the future?
- Solidify your relationship with HR: A vice president of manufacturing once told me that “80% of (their) job is in human resources.” Right now there’s a lot of ambiguity on “what to do if an associate becomes infected” and what the right compensation policies are. HR’s guidance to navigate this unknown is essential. The conundrum most employers face: a risk is created if ill workers come into the workplace, but workers may not feel able to stay at home if they are not entitled to sick pay. The dialogue will be even more critical when activity picks up. Boosting morale for retention while competing for skills will be just as fierce. Working with HR to create common role profiles and job descriptions is needed. Clarity on the nuances between hourly and salaried employees is essential.
- Catalog skills and competencies for flexibility: Whether to stagger the workforce by shift — and how to approach it — are big questions. Workforce flexibility is needed. How can the workforce flex with the processes and products? Identify the essential and non-essential functions and roles per shift. Where is the bench strength shallow and where is there redundancy? What jobs are mission critical? Which roles might shift to partially or fully virtual? The concept of virtual factories might not be new, but this last change could add another level of depth by improving long-term resource balancing across sites in a region or business unit.
- Knowledge management and creation: 41% of respondents in a 2018 Gartner survey on digitizing factory operations cited knowledge management as a constraint to skills and talent. Based on client inquiry and ongoing manufacturing talent research, we believe that number is lower than today’s reality. After the economic collapse in 2008, it became apparent that very few companies had solid plans to capture and institutionalize operational knowledge. Today, tribal knowledge is still a constraint to reliable output from shift to shift or site to site. The current “unplanned downtime” can still drive labor productivity — just differently. Here is how: For employees who cannot make it to sites or access systems to participate in normal processes, consider asking them to be part of virtual communities of knowledge. In these communities, those with common roles and responsibilities can share observations, surface known issues, collaborate on solutions and improve skills. Capturing this tacit and institutional knowledge is priceless insight and can be a jumping-off point for new cross-training and skills certifications, along with scalable improvements.
We are all focused on the challenge of the moment with COVID-19 impacts, but leaders in the future will leverage the crisis as a burning platform to seize an opportunity to strengthen engagement and create future factory workforce capabilities. While we always talk about “outside in,” now is a time to pause and look inward. Ensuring a resilient talent platform and capability in manufacturing operations can potentially help your supply chains accelerate out of this disruption as we return to business as usual.
To participate in our coronavirus survey, Weathering the Supply Chain Storm, click here.
Gartner Supply Chain