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Manufacturing After COVID-19

Alan Rooks
By Alan Rooks Editor in Chief, Manufacturing Engineering

The U.S. manufacturing industry has made major adjustments to stay in business and keep production moving during the COVID-19 pandemic. Not only have manufacturers adapted to major disruptions in all major markets, they have also reconfigured their production systems to keep workers safe. As of December, the U.S. was battling a major surge in coronavirus cases, but with vaccines ready for distribution, a gradual end to the crisis was in sight. So what will manufacturing look like after COVID-19?

Interestingly, 47 percent of U.S. manufacturers reported significant or modest revenue growth during COVID-19, according to a Citrin Cooperman survey of over 200 U.S. manufacturing and distribution companies conducted this past summer.

“Companies capitalized on a major shift in product demand ... and continue to focus their manufacturing efforts in those areas,” wrote Mark Henry, partner and co-leader of the Manufacturing and Distribution Practice for Citrin Cooperman, a CPA firm, in a November article in the Boston Business Journal.

The survey also noted that a major change has occurred in online sales, with 68 percent of manufacturers indicating online sales have grown between 11 and 50 percent over the last 12 months. “Most respondents linked their success to their e-commerce platform and/or working with Amazon,” said Henry. “The key to maintaining this success will be investments in enterprise resource planning systems and cybersecurity tools to support demand for these channels.”

The study also found an increased need for inventory management technologies, particularly as companies sort out whether “pandemic pivots” by consumers indicate short-term or long-term changes in consumer behavior.

SME Media found similar forward thinking when it surveyed manufacturers in April 2020. “Almost all respondents stated that their company was still operating in some capacity, with half stating that their companies were still fully active, while another two-in-five indicated that they were operating at partial capacity,” wrote Steve George, manager, SME Business Intelligence, in the May 2020 issue of Manufacturing Engineering.

Changes are afoot in the supply chain, the survey noted, with 25 percent of respondents indicating that their company plans to reshore production to the U.S., with only five percent indicating that their company plans to outsource more production.

Also, the manufacturing industry was highly optimistic, the survey found, with 68 percent stating they were very/somewhat optimistic the industry would recover to its level of production pre-COVID-19 by the end of 2020, with one-third of those being very optimistic.

We still don’t know how the post-pandemic future will play out, including how fast highly affected industries like aerospace will recover. However, we can be certain that there will be surprises along the way, so stay ready to pivot!

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