Manufacturers Need to Pivot with Agility. Here’s How.
COVID-19 has decimated manufacturing. From factory closures, to decreased demand, to supply chain disruptions, to sick workers, and much more, there’s no escaping the many disruptions of COVID-19. Now, manufacturers face a decision: try to stay afloat by treading water or pivoting to ride the wake as the virus passes. For those intending to thrive, a pivot is necessary. But it won’t be easy. There are lots of variables to consider and no small amount of trepidation that comes with making a big adjustment in a time of relative uncertainty.
Thankfully, the ability of manufacturers to pivot is broad. Pivoting doesn’t necessarily mean changing your business strategy — it may just mean augmenting it or changing one facet of a larger value stream. Here’s a look at some of the ways in which manufacturers can pivot with relative agility.
Re-think your supply chain
For most manufacturers, the supply chain is the biggest question mark right now and will be for some time. Many companies have already made adjustments to their supply chain. Now might be a good time to re-tool it from the ground up.
In a recent survey by analytics firm Thomas, 34% of companies said they’re working to find alternative international suppliers. Another 47% are looking for domestic suppliers. Many manufacturers have seen what supply chain disruptions can do to their business in a short amount of time. Now, they’re deciding they want to be more in control and better prepared in the future.
Expand into new production lines
Technology has allowed manufacturers to quickly adapt themselves to meet market demands. Major manufacturers like automakers have pivoted from producing cars to producing ventilators in under 60 days. Why can’t smaller manufacturers do the same? Look at peripheral needs or demands from customers to get a broader picture of the opportunities for new production lines. From turnkey solutions to mass-produced white-label products, what could you be producing that you’re not currently? Innovation and diversification lead to survival.
Explore new industries and customers
As manufacturers innovate, they need to expand their customer base. More than gobbling up market share in your current industry, look at under-served industries for opportunities. Where can you be competitive on price and produce a product with plentiful demand.
Today, that’s personal protective equipment (PPE). What will it be tomorrow? Keep your ear to the ground for demand that falls within the bounds of your manufacturing capabilities and aggressively pursue opportunities — even if they’re outside of your current scope of work. It takes less time to train employees and adapt operations than you think, especially if you’re securing lucrative contracts that keep your people employed and busy.
Look at your value stream and ask yourself where your pain points are. Then, ask how you can bring them in-house, under your control. Now might not seem like the time to make acquisitions or expand your operations, but it’s actually a great time. Vertical integration has fewer barriers when the industry is under duress. Turning your biggest pain points into in-house parts of a value stream can help you reduce cost, improve quality, and continue to pivot with agility.
Many manufacturers are afraid to pivot, especially with an uncertain road ahead. The fact is, pivoting is a form of innovation and innovation is the key to survival. Now, more than ever, it’s crucial for manufacturers to pivot and find success.