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With 95% of Americans under shelter-in-place ordinances and following social distancing guidelines, it’s no surprise that virtually all manufacturing in the U.S. has come to a sudden stop. A supply chain shutdown of this magnitude is unprecedented in the automotive market, and has left most automakers and suppliers focused on responding to and protecting the immediate safety and wellness of their employees, managing finances and crisis recovery.
Unfortunately, recovery is more complicated than flipping the factory switch back to “on.” Even in normal times, routine plant shutdowns require immense coordination to ramp up plant production. Now, manufacturers will be faced with new COVID-specific health and safety regulations which further complicate recovery efforts. Nonetheless, experts suggest it's the speed and effectiveness of the restart that will ultimately determine when and if a manufacturer, and the automotive market at large, recovers.
At Drishti, we’re invested in helping automotive OEMs and suppliers achieve maximum levels of efficiency and quality control, so we’ve been monitoring the auto recovery process very carefully. To help companies get operations up and running quickly, we’ve compiled a list of resources that explain the challenges and offer guidance to restore productivity.
Productivity Impacts: Automotive Logistics
In a recent podcast hosted by Automotive Logistics, Mark Fields, the former CEO of Ford, theorized about large impacts to productivity during the ramp up and attributed it to several factors:
After COVID-19, there will be multiple sources of productivity delay. Companies that will succeed during this recovery will be able to quickly identify the source and implement corrective actions. The focus should not be on dealing with process issues piecemeal as they arise, but for leadership to take a holistic view and understand the process issues of their entire facility, then prioritize them to meet customer demand.
Supply Chain Disruption: Automotive News
The threat of productivity delays was also discussed in the Supply Chain & COVID-19 Impacts: Webinar hosted by Automotive Logistics. During the webinar Wolfgang Lehmacher, a supply chain specialist with the World Economic Forum, theorized that the threat of liquidity to small- and mid-sized OEMs posed a major threat to automakers. Losing a supplier during this recovery means automakers would need to find a replacement supplier when most OEMs are struggling to meet their current customer demands, setting them back even further when it comes to productivity.
“There needs to be a focus on increasing communication and understanding the risk with their suppliers. There will be a need for inventory transparency, parts rationing, minimal production monitoring,” said Lechmacher.
Transparency between customer and supplier is key. Suppliers will need to provide insight into their production so their customers can accurately forecast the demand they’re capable of meeting. In addition, visibility into production will be key for suppliers to ensure production is on track and implement corrective measures for any problems that threaten production goals
Health and Safety Changes: Center Of Automotive Research
Jim Tobin from Magna Asia and Aaron McCarthy with Magna International spoke at “Center for Automotive Research: The Playbook for Restarting Production Webinar.” Among other topics, they spoke about how worker safety could potentially lead to productivity delays:
Host: Operators are concerned about COVID-19 and its spread at the workplace. Considering new efforts of social distancing, shift and break phasing, aggressive cleaning standards and in some cases physical wellness checks, what is Magna doing to protect workers?
Aaron McCarthy: Magna has developed policies around spatial distancing, PPE and cleaning. We’re also aggressively advocating for better personal hygiene (more handwashing, coughing/sneezing in your arm, etc). We’re also focused on training our workforce and our leaders on new health and safety practices.
Preventing viral spread will be part of working in a factory for the foreseeable future. Whether overcoming disruptions to productivity or reducing population density on the line, manufacturers will need to ensure the safety of their employees while maintaining the viability of their business.
As the automotive supply base gears up for an optimistic restart in the near future, it’s clear they have an uphill battle ahead of them. Across the industry there is now a growing need for visibility into the factory floor, not just to optimize operations, but also to ensure the health and safety of the workforce. Drishti’s history of extending human potential in an increasingly automated world, paired with our AI-powered computer vision software, can help automakers on the path to COVID-19 recovery.
Research and support credit to Michael Robertson.
