The impact of this pandemic has not only left an indelible mark on society but has also left no industry untouched. Artem Kroupenev, Vice President of Strategy at Augury made the observation in his article What Will Manufacturing’s New Norm Be After COVID-19? that “For the first time in modern manufacturing history, demand, supply and workforce availability are affected globally at the same time.” We have seen disruptions in supply chains due to war overseas, we have seen employment plummet due to depressions and we have seen demand impacted by recessions. But we haven’t seen all of those results at once – until now. The impact in its entirety can be boiled down to initial responses (short term effects) and economical impacts (long-term effects.) Some of the initial responses may even take permanent residence in protocol and safety precautions; of which I would apply the phrase uttered so often these days, “time will tell.”

Initial Responses (Short Term Effects)

Demand Spike- Due to the inability or extremely limited international trade, the US is relying on domestic manufacturing more than ever. The demand for essential products like PPE, paper, and cleaning products has skyrocketed. Manufacturers in these industries are finding it extremely difficult to even meet the high demand; they just weren’t equipt for it. Take Samseng Tissue, a paper product manufacturer for example. This is a company we had been discussing energy pricing with pre-pandemic. Once the initial panic buying started, production was firing on all cylinders. There was just simply no way they could have predicted the ramp-up of demand. 

Temporary Product Manufacturing- Manufacturers have also taken to producing products outside of their normal scope. Companies’ responses to the demand spike have been to manufacture essentials and protective wear – even companies that wouldn’t normally do so. One of our clients, Ehmke Manufacturing in Philadelphia, who normally produces military-grade fabrics and covers are now mass producing PPE. 3D printing companies are also making their mark on the COVID-19 response front lines by also manufacturing medical protection. Distilleries are mass-producing coveted hand sanitizer. Though these products aren’t considered these companies’ “norm,” they have adapted to the demand shift. 

Protocol and Safety Changes- Just because manufacturing is deemed “essential” doesn’t mean that protocol hasn’t changed post-COVID. Many companies have had to implement shift changes and “safe distancing” measures. Fluoro Plastics has had to break up their normal 2 shift days into 3 shifts to accommodate distancing measures – ensuring every employee has their own designated work area. Avery Dennison has implemented temperature checks for every employee at the start of their shift. These are the types of changes believed to be eventually instituted into the “new norm.”

Economic Impacts (Long Term Effects)

Domestic Manufacturing- To prevent the disruptions that we are having in supply chains currently from happening again, you will be seeing A LOT more domestic manufacturing being done. This is also a 2 fold solution. Not only are you ensuring disruption from happening again but you are also injecting money into the economy that would have otherwise been allocated to international trade. 

American Renewal Action Plan- The National Association of Manufacturers released its plan for moving forward post-pandemic. The American Renewal Action Plan is outlined in three phases- response, recovery, and renewal. 

  • Response Phase – In the plan’s response phase, Congressional and administrative action will allow manufacturers to ramp up production and distribution of PPE. This is not only to serve the medical field but for other essential businesses as well. 
  • Recovery Phase – Congressional and administrative actions to ensure the safety of every employee and to implement proper health precautions. It also calls on legal reform that allows all essential manufacturing to operate at maximum capacity. 
  • Renewal Phase – The renewal phase mainly revolves around funding for growth and sustainability. It calls on funding for workforce training programs for dislocated workers. It also calls on funding for national infrastructure to boost the economy. Lastly, the renewal phase addresses the need to increase US exports and actions to strengthen the supply chain. 

Long term effects aren’t quite known yet as we are still in the thick of things. “These uncertain times” continue to urge us to constantly adapt – something that the manufacturing industry has always proven to be quite good at. 

Written By: Kristin DeBias

Sources: What Will Manufacturing’s New Normal Be After COVID-19- by Artem Kroupenev 

The National Association of Manufacturers