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Deloitte: Manufacturing Likely to Revamp Facilities to Adjust to COVID-19

Bill Koenig
By Bill Koenig Senior Editor, SME Media

Manufacturing will probably make significant changes at facilities as the sector adjusts to the novel coronavirus (COVID-19), consulting firm Deloitte said in a report.

“Manufacturing companies likely need to make decisions about the work itself, the workforce, and the workplace,” Deloitte said in the report.

Industry is boosting production and restarting factories that had been shut down because of the coronavirus. However, COVID-19 remains without a cure. There has also been an increase in cases in some parts of the U.S. amid efforts to restart the economy.

The U.S. has recorded more than 2.3 million confirmed cases of COVID-19, with more than 120,000 deaths, according to John Hopkins University.

“A priority during this phase is to make employees feel safe and protected from a risk of virus spread,” according to Deloitte.

That means, Deloitte said, “new physical distancing constraints across factory floors and production and warehouse environments.”

Manufacturers may take advantage of smart manufacturing technology already being implemented, the consulting firm said. Such technology includes “analytics, sensors, and wearables” which may “help both in mitigating risks and accelerating recovery.”

Wearable technology is emerging “as another promising use case to enforce sanitation and physical distancing,” the report said.

Deloitte also outlined other adjustments manufacturers may consider:

--Companies may increase aftermarket services and other “short-cycle, repeatable revenue streams,” the consulting firm said. “Manufacturing leaders believe that over the next decade, the emerging business model will be equally split” between products and services compared with “a 75/25 percent mix in favor of products at present.”

One factor for the shift: “As the pandemic continues, demand for new capital equipment is likely to further decline as companies focus on preserving cash” and cut spending “to manage the short- and medium-term business impacts,” Deloitte said.

--Accelerate diversifying supply sources and lessen reliance on imports from China.

“This could include both reshoring – bringing back or expanding manufacturing capacity in the United States – and expanding into regions implementing their own supply chain improvements.” Such regions include Mexico, Latin America and South Asia, Deloitte said.

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