Onwards into the Future
27 May 2021
When the global humanitarian and economic crisis that is COVID-19 unleashed its wrath across the world, individuals and companies, alike, had to change how they live and work, overnight. Here is a look at leveraging the precious lessons learnt
When the global humanitarian and economic crisis that is COVID-19 unleashed its wrath across the world, individuals and companies, alike, had to change how they live and work, overnight. With millions of people in complete or partial lockdowns, the pandemic forced societies to quickly and dramatically change how work happens, how people communicate, socialize and consume products and services. The impact of COVID-19 on customer behavior was far-reaching and instantaneous. Spending across most industries plummeted, purchases shifted from traditional to digital channels, and public safety became top priority.
The pandemic’s impact on the manufacturing industry was extraordinary. Initial forecasts by the IMF indicated that the pandemic would cost the world $28 trillion in lost output over the next five years. Business elements were challenged – from ensuring an effective crisis response, managing supply-chain disruptions, ensuring customer needs were met, to safeguarding the well-being of employees while adjusting daily working practices. For the first time in manufacturing history, demand, supply, and workforce availability were affected globally, and what's more, at the very same time. Every major manufacturer experienced disruptions across their supply chains of parts and raw materials, driven by the volatility of supply everywhere. The lockdowns, coupled with social distancing protocol and employee safety measures put an additional level of pressure on manufacturers, as over an estimated fifty per cent of the workforce was unable to perform functions on-site.
On the Ground Realites
However, the manufacturing sector proved to be far more resilient than predicted; while Q1 was sluggish worldwide, things did begin to look up in Q2, not just in India, but across the world, signaling an improvement in economic activity. Demand rose in specific sectors spanning pharmaceuticals, food processing, construction, medical equipment, and general engineering, as manufacturers adapted their product lines to meet demand volatility. To cite our example, industries across critical sectors such as healthcare, hospitals, food & beverage, and pharmaceutical plants, witnessed significant demand for air compressors. While some companies that provided essential goods such as pharmaceuticals, paper, food & beverages, etc struggled to surmount challenges to meet the demand driven by panic buying. Others experienced significant drops in demand, which led to extreme pressure to reduce operational costs.
Agility and resilience took center stage as, despite the challenges, employees across the world endeavored to remain fully operational while adhering to social distancing and remote-working where possible. Sales teams dispelled traditional notions that sales can only be carried out face-to-face; instead, they quickly adopted virtual methods to engage with their customers, reach new audiences, all while continuing to grow. Doing business differently also led to a reduction in fixed costs, primarily travel-related, as organizations realized all those long commutes weren’t as essential as they thought they were. We also witnessed ‘virtual shifts’ wherein remotely connected workers augmented on-site personnel with real-time data using AI and collaborative project management tools. Take us for example, despite several challenges, our sales and service teams worldwide remained operational, and for those whose work required them to be onsite, safety policies and practices were institutionalized ensuring both workforce health and productivity.
The Lessons Learnt
If coronavirus has taught us one thing, it's that it's never too early to invest in people, products, processes, and technology that will ensure optimal financial performance in times of heavy disruption.
For one, during some of the most uncertain times caused by the pandemic, it was the strength and resilience of our people that saw us through testing times. Even during the restrictive lockdowns, our teams across the world never faltered for a minute in their focused approach to creating value for the customer. Our people are most definitely our biggest asset. And investing in their well-being while saving human capital, ahead of productivity, is the most crucial task.
Second, as the pandemic unfolded, companies that did have a global footprint with a broad customer base across countries, saw their risk spread out while they weathered regional challenges in the short run. Take our case, for instance – over the last few years, a consistent, aggressive focus on pursuing a globalized business strategy has enabled a significant shift in the contribution of our global markets to our revenue. During the first quarter of this year, India contributed to about 40 per cent of the revenue whereas the rest of the world has contributed to 60 percent, a first and significant shift in the contribution of our global markets to the revenue of the company.
Thirdly, technology and digital infrastructure assumed a critical role in keeping us connected during the crisis. You may argue that connectivity is a business given. However, the crisis tested an organization's ability to fast-track digital investments and strategies while embracing new ways of working via the use of technology.
Institutionalising the lessons learned from COVID-19
Build technology that will enable competitiveness globally
Technology is, without doubt, an enabler encouraging manufacturing organizations to move up the value chain and ensure that both future disruptions and crises are navigated more efficiently. True economic recovery will be driven by manufacturers who use technology to augment human creativity.
During the pandemic, we witnessed the need for production flexibility with renewed urgency. Flexibility from over-dependence on workers with specific skills and flexibility to shift production as per customer demand. For example, we’ve recently installed collaborative robots that work in partnership with our employees in production. Our largest compressors require specifically skilled labor and to protect against future crises we've installed semi-autonomous production lines which have reduced the reliance on specifically skilled employees. These measures have paid dividends during the pandemic which restricted the number of employees that could safely work in our production lines.
The pandemic has amplified the importance of digital channels, especially for businesses who ordinarily interact with customers on a face-to-face basis. It has also accelerated the evolution of digital user interfaces resulting in the need to redefine omnichannel strategy to create unique, compelling customer experiences. To win in the new reality, manufacturing organizations will need to identify the current behaviors that will define customer experience. Three priorities will define the customer experience in the post-pandemic era: safe and contactless engagement, on-time, dynamic customer insights, and digital excellence.
Build quality that is world-class
That quality, or meeting/exceeding customer expectations, every day, every shipment, in each product, year after year, is key to increasing market share, is a well-known fact. But when faced with a crisis of this sort, quality becomes the sine qua non to achieving the necessary sustainable advantage an organization needs to succeed.. And the secret sauce by which an organization can build an intrinsic focus on quality and develop a sustainable competitive advantage in the market is via the adoption and implementation of deliberate organizational processes such as TQM.
Protect the financial wellbeing of people and their growth
People focused, well-being initiatives will become an essential part of every organization's ammunition – not only for attracting and retaining talent but also for demonstrating a commitment to every employees’ health and safety. Physical and mental health, together with financial, social, and occupational well-being, all play an integral part in employees' overall well-being. Organizations will also need to focus on helping employees adapt, upskill and grow, amid changing working conditions; by providing access to relevant learning and development to foster their growth.
To conclude, 2021 will epitomize the new possible. Individuals, businesses, and our society will start looking forward to shaping the future rather than just contending with the uncertain present. Perhaps this evolution has seen us scramble to adapt under intense pressure. But I firmly believe that we have, every step of the way moved from reacting to myriad obstacles to building and institutionalizing what we’ve done well so far. Onwards and upwards to the future.