Manufacturing Operations Finance

Minimizing COVID-19 Supply Chain Disruption

Driven by the COVID-19 pandemic, big changes are already occurring in the manufacturing environment. Manufacturing and supply chain automation is increasing, resulting in a reduction of assembly labor and increased supply visibility. Workforce procedures are being formalized and standardized to keep workers safe, and activities are being managed at a distance with remote policies in place. Many manufacturers are now stepping up to produce essential products or experiencing an unexpected increase in regular product demand.

With all the added pressure and ongoing uncertainty, it can be difficult for businesses to keep up. To address one particularly pressing challenge, here are a few sound strategies that can help with minimizing COVID-19 supply chain disruption.

1. Improve Shop Floor Automation

Automation is a technology, or group of technologies, enabling processes to be performed with minimal human intervention. The process of manufacturing household products like toilet paper and paper towels that have become scarce during the pandemic is highly automated. Manufacturers of these staple products can produce greater or lesser quantities depending on demand, with little to no risk to their workforce.

Not all production processes can be easily automated, but soft automation can be achieved through robotic technology, flexible manufacturing systems or lean production systems which allow for quick changeover and decreased labor.

Automation can also be achieved by evaluating the workflow, modernizing outdated equipment and processes, training the staff, keeping the factory organized and, lastly, through attention to the supply chain. Automation of the supply chain is of special importance since all manufacturing is still dependent on the steady flow of raw materials from suppliers.

2. Enhance Supply Chain Visibility and Risk Management

The COVID-19 pandemic has generated a need for tools and processes to enable increased supply chain visibility, identify risks and perform disruption simulations. As we all know, national and global supply chains have experienced significant disruption during the past couple of months. Numerous stores around the world now have empty shelves where common items should be.

With the goal of minimizing COVID-19 supply chain disruption, manufacturers should focus more on their suppliers’ capabilities. Knowing these capabilities could help ease concerns over shortages when they don’t really exist and, instead, stores are just struggling to keep up with restocking.

Manufacturers will also need to look at constraints up and down the supply chain to further mitigate risk. In the longer term, business processes will need to be continuously analyzed to expose vulnerabilities, like the effects of consumer panic buying, and to better understand risk exposure. Because manufacturing companies utilize both a physical supply chain and a digital supply chain, synchronizing these process flows will facilitate flexibility and make the entity adaptable to changing market conditions.

3. Protect the Workforce

The challenges of keeping employees safe and healthy are persistent. Employee health can of course impact supply chains, as we’ve recently seen in the meat-packing industry. The more obvious policies and guidelines include enhanced hygiene measures, additional personal protective equipment, physical distancing and modification to existing governance. Also, a re-examination of product workflow and internal logistics is key and may improve productivity.

Additionally, protecting an employee’s mental health is also a high priority, one often not considered. Employers can provide counseling services to employees, emphasize self-care within the organization, encourage on-line training, education and other virtual experiences when possible and remind employees to utilize Employee Assistance Programs where available. Managers and supervisors should stay connected to the workforce, show empathy and be available.

4. Manage Productivity from a Distance

Increasing communication and regular information sharing between all levels of the organization is critical to minimizing COVID-19 supply chain disruption.  Frequency counts as audiences sometimes need to hear messages repeatedly to fully absorb the content, with two-way communication promoting better outcomes.

One suggestion is to provide workers with the opportunity to submit questions or concerns every day, publishing the questions and answers regularly by displaying the messages electronically throughout the workplace. This approach can cover various issues including frontline concerns not necessarily related to the pandemic.

Whether using this approach, daily stand-up meetings or informal meetings with senior managers, more often than not additional communication advances productivity, improves workplace satisfaction and reduces absenteeism. In turn, all of this can help to keep supply chains intact and efficient.

Strategies for Minimizing COVID-19 Supply Chain Disruption Today Can Benefit Your Business Long After the Pandemic

Organizations should capitalize on these improvements and standardize their new approaches to automation, supply chain management, worker protection and communication rather than regressing to pre-pandemic norms as workplaces stabilize. These improvements can provide not only short-term stability but also better efficiencies and improved earnings far down the line.

If your manufacturing business is struggling with supply chain or other pandemic-related disruption, 8020 can help. Give us a call or reach out here.

For more on how 8020 can assist with Manufacturing Operations Finance, download our service sheet here:

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About the Author

Susan is a CPA with 20+ years of diverse finance and accounting experience in various industries including manufacturing, technology, apparel and real estate. She is an Ernst and Young alumnus who has held leadership roles at Fortune 500, middle market and entrepreneurial companies as Controller, VP of Finance and CFO. These companies have included Power-One, Clipper Windpower, Allied Signal, and Special Devices among others. Susan has provided financial leadership and project management to accounting organizations, including turnaround and restructuring projects, creating international tax structures, implementing IFRS, managing internal and external financial reporting, system implementation and leading finance and accounting efforts for divesture, acquisition and process re-engineering. Susan holds a BS in Accountancy from San Diego State University.

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