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2020- manufacturers have proven themselves to be the ones creating the new technologies of today and designing the innovations of tomorrow. Many companies have provided solutions to the world’s biggest challenges by investing in their people and capitalising on their strengths. In response to the various stages of the industrial revolution, the manufacturing sector has seen its share of challenges, structural changes and has evolved & developed over time. As a consequence of the Covid-19 pandemic, these challenges have concentrated in a much shorter period. However, consumer demand has been virtually eliminated in various sectors while increasing massively in others. The sector has shown its resilience and adaptability in the face of fierce headwinds, aggravated by the Brexit negotiations. Now that the UK economy is on a steady recovery trajectory, we need the sector to step up further in the coming years. During the Covid-19 pandemic, we have learned that even complex international supply chains can come to an abrupt halt when links break. Many manufacturers will likely implement dual-sourcing into their procurement programmes and look to different geographic areas for these multiple suppliers. Restoring part manufacturing to the UK may be possible in some instances, but it will be the exception rather than the rule. Reviewing supply chains can assist our international partners and local ecosystems in finding alternative sources of supply.  

MOVING CLOSER TO THE CUSTOMER

Many organisations have regionalized or localized manufacturing to be closer to demand. In times of disruption, regional supply chains, regardless of the costs involved in adding new players to the ecosystem, can alleviate delays and shortages – if they are economically viable. Many Western companies will have to increase automation in their factories and reduce onshore or nearshore production costs. Another partial solution is to manufacture in Asia but move only the final assembly closer to the customer. A March 2020 Bloomberg article read that “electronics makers are past the point of no return in their gradual migration from China.” “Global industrial chains will reduce their dependence on China,” the article concluded.  

FINDING AN ALTERNATE ROUTE

As they seek to diversify their operations after the outbreak of Covid-19, global manufacturers have begun talks with Indian firms to explore the possibility of shifting a part of their supply chains from China. As a result of strict lockdown measures enforced by Chinese authorities to contain the pandemic, most multinational companies have been affected. There is also demand rising from Indian companies, heavily reliant on China for component sourcing but are suffering because of the novel coronavirus. There is an active effort by local firms in India to find alternatives to China. They are bound to reduce their imports from them, but the change will take time.   These sudden transitions enabled many supply chain companies to explore different geographical markets for their product manufacturing and sale. Similarly, in response to the pandemic and the resulting need for health & hygiene supplies, OGS faced many such challenges manufacturing these items in China due to a global lockdown and socio-politico instability. It is true that ‘necessity is the mother of invention,’ for we immediately relocated our production to India and shipped to Europe and the UK. In the wake of the Covid-19 pandemic, global supply chains faced some of their most pressing challenges yet. Nevertheless, as with any geopolitical event, the pandemic offers some opportunities for a new economy built around a reenergized manufacturing sector. In addition to creating fresh ideas, supply chain companies have proven to be effective problem-solvers. As we anticipate an upcoming stimulus, we can take advantage of the opportunities to build a digital, global, and green economy post-Covid-19.