Manufacturers looking to be more flexible, analytical in wake of COVID-19
A survey of German and U.S. manufacturers found many have been heavily impacted by the COVID-19 pandemic and are looking to become more flexible and more dependent on data, maintenance models.
Like many other sectors, the U.S. manufacturing industry has been heavily impacted by the current health crisis. The global nature of the pandemic has led to bottlenecks in supply chains, turnover, and orders.
In response, relayr, a global Industrial Internet of Things (IIoT) company, surveyed more than 200 leaders in the U.S. and Germany manufacturing industries. Topics ranged from how the crisis affects their operations and how they’re dealing with challenges presented by the pandemic to their assessment of future economic development.
Six key findings from manufacturing survey
According to current estimates, the crisis will lead to economic setbacks across the board. Declining exports and difficulty in planning are leading to uncertainty in the manufacturing industry.
Other key findings from U.S. manufacturers include:
1. U.S. companies have been hit hard by the crisis
Most respondents (67%) in the U.S. say the crisis has had a somewhat negative or very negative impact on their businesses. Their biggest challenges are a decline in new orders (58%), their employees’ concerns about a possible COVID-19 infection (56%), and a decrease in sales (54%). However, only 11% of U.S. companies are seriously concerned about remaining in business.
2. Investment behavior is curtailed
Half of the U.S. companies surveyed expect their investment behaviors to be lower than 2019, while 14% are unsure. In contrast, just over a third (36%) plan to make investments at the same level or higher than last year.
3. Flexibility is the new mantra
What measures have the surveyed companies taken to meet the challenges of the crisis? “Increased flexibility” was at the top of the list for U.S. manufacturers (59%). Other top measures include improving customer service and relying on technical innovations to counteract the crisis’s effects.
4. Equipment-as-a-service (EaaS) business models are becoming increasingly popular
A complete business model overhaul was an option for only a few of the surveyed companies: 16% of U.S. companies are planning to transform at the moment. However, a majority of those surveyed recognize that new business models, such as pay-per-use models (“equipment-as-a-service”), represent an advantage for both the supply and demand sides in the current crisis. In the U.S., 34% said pay-per-use models represent a big or a very big advantage, while 29% consider it a slight advantage. Almost half of the companies surveyed also stated that they use a pay-per-use model themselves (18%), offer it (15%), or do both (9%).
5. Predictive analytics is on the rise
The respondents are adopting various technologies to gain a competitive advantage. In the U.S., 38% of businesses are implementing predictive analytics, followed by big data (33%) and IIoT (32%). More German companies (47%) use IIoT and AI to gain a competitive advantage; U.S. manufacturers have higher usage rates of predictive analytics.
These innovative technologies not only represent a fundamental advantage for the respective businesses but are especially beneficial in the current situation. Among the companies that use one or more of the listed technologies, 99% of the U.S. respondents believe technology will help their company in the crisis.
6. Easing of lockdown measures shows positive effects
The first loosening of lockdown measures is already leading to positive effects. Since restrictions have lifted, 14% of U.S. companies have felt a significant increase in demand for their products, and 45% have had a slight increase compared to the weeks before the easing.
Josef Brunner, CEO, relayr, said: “These unprecedented times and developments cannot be compared to anything in the recent past. Therefore, it’s encouraging that the manufacturing industry is fairly optimistic about the future. It clearly shows modern technology, flexibility, and customer focus are extremely critical factors for economic success in general and for building resilience as a business. Thus, even in these unusual times, companies can build the most solid basis for shaping and securing their future and the future of the industry.”