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How Manufacturers Are Converging and Pivoting During the COVID-19 Crisis

14 May, 2020
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What’s Happened

Although the arrival of COVID-19 has produced a tumultuous upset of the global economy, there are numerous bright spots — both socially and economically. People around the world are uniting — albeit from a distance — to fight a common enemy.

From an economic perspective, many companies have retooled factories to make medical supplies. Numerous cosmetics companies, breweries and distilleries have begun creating hand sanitizer. Apparel companies are making hospital gowns and masks. Hotels are offering up their rooms as quarantine shelters or temporary lodging for visiting medical staff in highly impacted areas. Auto manufacturers have turned their attention to ventilators, coordinating with numerous other businesses that manufacture the precision components required to make these machines safe. Passenger airlines have increased their cargo-carrying rates.

By and large, all of the pivots mentioned above were voluntarily performed by companies in numerous industries across the globe. In many cases, they’re just giving these supplies away. Although this altruistic behavior is encouraging from a social perspective, it should also be food for thought for businesses around the globe. There’s a tremendous lesson to be learned here for the perceptive business executive.

 

How They Did It

The first thing successful companies did to pivot was taking stock of the nuts and bolts of what they did. They broke down each process, component and ingredient into its basic parts, then essentially asked: “How can we use what we already do?”

One cosmetics company in France was surprised to discover that it already had mass amounts of ethyl alcohol, purified water and glycerin on hand — the three ingredients required to make hand sanitizer. A clothing designer took a week to research textile requirements for hospital gowns, only to find that it already had material that met medical standards on-hand.

Ford, GM and Tesla all converted parts of factories to making ventilators. These medical devices require airflow control and monitoring involving an array of mechanical and electrical parts — as do vehicles. Ford converted a factory that typically produces transmission oil pumps, battery packs and air induction systems. GM used a plant that produced precision electrical components. Tesla leveraged their experience with oxygen valves and custom manifolds to quickly transition to lifesaving breathing machines.

These innovations have come from a host of different industries. Computer makers discovered that there’s quite a bit of duplication between making liquid-cooled PCs and ventilators. “While the components are very different, the skills required to produce and assemble emergency ventilators, while aimed at a very different outcome, have a large crossover with custom liquid cooling PC assembly,” said a Maingear spokesperson. Dyson’s experience in airflow and air purification made them an ideal candidate for alternative ventilator production. Other companies that had most of the components but were missing a few key parts found ways to 3D print them.

 

What’s Down the Line

On the other side of the spectrum, farmers who had logistics lines exclusively targeted at restaurants have been destroying entire harvests. Dairies have been dumping hundreds of thousands of gallons of milk, while meat companies have had to destroy ton after ton of meat when usual outlets weren’t available. Although some of this is inevitable in any market disruption, the sheer scale of the waste indicates a lack of preparation in certain sectors to pivot rapidly to produce alternate goods and services or distribute them with different logistical arrangements.

This could be our first glimpse at a tremendous evolutionary leap that’s taking place. In the same way that a farmer might repurpose a field to another crop based on market projections, companies would be wise to examine the feasibility and expense of manufacturing different products. For manufacturers further up the supply line, it would be a smart move to research and catalog the numerous ways that their raw materials can be used, then begin to cultivate relationships throughout the supply chain.

If there are legal requirements, research them and have at least a basic comprehensive understanding of the regulatory environment. One choke point for ventilator manufacturing, for example, was the extensive requirements around the sensors and control mechanisms. The more homework a company has proactively completed, the more efficiently it can acclimate when market forces make change necessary.

The bottom line is simple: the world is changing, and businesses that remain rigid and inflexible will have a very tough time of it. Companies that are prepared for adaptation, however, have a high chance of making it through the economic recovery with a bright future ahead of them.

Moiz Bhinderwala

Moiz Bhinderwala leads the technical services and logistics teams at Dynamic. With more than 10 years of experience in the IT industry, Moiz has deep knowledge of the complex technological landscape, working closely with clients to understand their IT challenges and help design custom technical solutions to meet their business goals.

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