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manufacturers, COVID-19, pandemic, layoffs, reshoring, demand increases, hiring, smart manufacturing, automation

How Are Manufacturers Holding Up During the Pandemic?

Reshoring and automation have both gained traction during a time when the global supply chain is stressed.

This week Thomas released a survey reporting on the impact of COVID-19 on US manufacturing and industry. The survey quizzed more than 1,000 North American manufacturers and industrial suppliers to find out how they have been affected by the global pandemic. The survey also looked at trends in a post-pandemic world.

Both reshoring and the deployment of automation have become more interesting to respondents. The survey reveals that 64% of manufacturers say they are likely to bring manufacturing production and sourcing back to North America, which is a 10% increase from the same sentiment reported in Thomas’ March survey of manufacturers. Another key finding shows that 25% of US manufacturers are considering expanding industrial automation as a result of COVID-19.

A full 56% of manufacturers have not laid off employees due to COVID-19, and 30% of companies are actively hiring. (Image source: Thomas)

Unexpected Data Drove the Need for a Survey

Thomas decided to survey manufacturers when peculiar data started coming out of China. “In the last quarter of 2019, we saw a surprising rise in PPE production in China. At first, we thought it was a bot. When we discovered it wasn’t a bot and we saw it move across the world, we decided to get about 1000 manufacturers and see what was happening,” Tony Uphoff, president and CEO of Thomas, told Design News.

In the face of a growing pandemic, Thomas created a site where manufacturers and suppliers could offer visibility their responses to the changing circumstances. “We created a COVID-19 supplier response hub,” said Uphoff. “Soon we had 2,000 companies that were not producing PPE but wanted to. They joined our hub so people could find them.”

Agility Thanks to Digitalization

The survey showed that the majority of manufacturers have adapted quickly to changing circumstances. This often means changing the products that are getting produced. The ability for manufacturers to retain more than 50% of their demand shows they are able to adapt quickly to a changing environment.

Thomas analysts believe this agility comes directly from investments manufacturers have made in smart manufacturing technology. “There is a direct correlation between this agility and smart manufacturing. Thirteen percent say they experienced an increase in demand. Forty two percent have seen no change in demand. That’s because of the advances in advanced manufacturing, artificial intelligence, and Industry 4.0 technology,” said Uphoff. “What was most surprising was the way companies have adapted. Companies have seen increases in business as result.”

The agility shown by manufacturers flies in the face of conventional views on manufacturing. “The average person thinks manufacturing is a dated industry. It’s not,” said Uphoff. “If the pandemic happened 10 years ago, we wouldn’t have seen this agility. It wouldn’t have been possible.”

Further Findings from the Survey:

Future of Industry: While 41% of manufacturers are predicting a decrease in demand as a result of the outbreak, 91% are confident that the sector as a whole will recover.

Job Security: 56% of manufacturing companies have not laid off employees due to COVID-19, and 30% of companies are actively hiring.

Impact of Non-Essential Businesses: 64% of manufacturers report their business is affected by the shutdown orders impacting other non-essential businesses, with the transportation (77%), automotive (75%), construction (70%), and agricultural (69%) sectors most drastically affected. 

Relief Efforts: While a majority (85%) of all companies surveyed report they have not shifted to produce supplies related to COVID-19 relief efforts, medical and healthcare, agricultural, and automotive manufacturers are leading the charge to produce PPE.

Financial Aid: 63% of manufacturing companies report having applied for financial assistance and of that group, 60% report they applied for the Paycheck Protection Program, 17% report they applied for Economic Injury Disaster Loans and 9% report they applied for Debt Relief and Express Bridge Loans from the Small Business Administration. 

In-Demand Materials: In order to stabilize supply and keep production on schedule, manufacturers reported the most vital items to be personal protective equipment (42%), metals (37%), fabricated materials (29%), and machining tools and parts (27%).

Rob Spiegel has covered automation and control for 19 years, 17 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years, he was owner and publisher of the food magazine Chile Pepper.

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