Melinda Rizzo, Contributing Writer//October 6, 2020
Melinda Rizzo, Contributing Writer//October 6, 2020
From mandatory facility shutdowns to creative ways to handle scheduling, staggered shifts and social distancing to looking hard at supply chain and raw materials vendors, manufacturers are rethinking – maybe more than retooling – their business approach for 2021.
“The key take away is to be prepared and to be flexible, as we are journeying through the pandemic. What worked last year may not work this year, or next,” said Rich Hobbs, president and CEO of the Manufacturers Resource Center in Fogelsville.
Hobbs said priorities shifting among manufacturing employers could be the hottest trends to expect in 2021.
“The pandemic has caused manufacturers to think about different aspects of their businesses as they have tried to accommodate many personnel issues, supply chain disruptions and uncertainty in general,” he said.
Embracing complete or partial work-from-home options, where possible, is another trend Hobbs said could continue into 2021 and beyond.
“We also are seeing a great deal of flexibility being offered in terms of attendance for shop floor workers,” to accommodate child care and personal schedules, he said.
Allowing and promoting flexible schedules is on the rise as employers aim to keep valuable employees through the course of the pandemic, and into the future.
Hobbs said many plant owners are now looking at business succession and transition planning, too, with more immediacy and urgency than ever before.
“We’ll see an increase in business sales coming, as many are looking to sell or at least test their business’s value in the market,” Hobbs said.
After the coronavirus hit in March, then intensified, manufacturers scrambled for supply chain resources and ways to improve procurement of vital materials. What began as a response resulting from shortages could now become a new way to doing business. Hobbs predicts a strong trend in reshoring and nearshoring for vital materials, so business owners can avoid being “held hostage by offshore suppliers” because initial supply chain disruptions hurt business operations.
Reshoring is the process of bringing back overseas supply chain operations to the country of origin, while nearshoring is the process of bringing supply vendors closer to the point of origin, from farther overseas destinations.
He said improving supply chain channels, as well as enhancing employee work options, will better position manufacturers to weather future challenges.
“Those [businesses] that adapt will do better than those that don’t,” Hobbs said.
David E. Black, president and CEO of Harrisburg Regional Chamber of Commerce & CREDC in Harrisburg, said everyone in the industry is scrutinizing supply chain to better prepare for 2021. Supplier redundancy and relationships with domestic suppliers are top of mind issues heading well into this year’s fourth quarter and into next year.
“What we are hearing is everyone is looking at their supply chains because there was such a disruption in the lockdown order in March,” Black said.
One of the manufacturing sector priorities for 2021 is getting back on track, said David N. Taylor, president and CEO of the Pennsylvania Manufacturers Association in Harrisburg.
“2020 has been such a wrenching year of dislocation because of the shutdown, being cut off from key vendors and supply chain disruptions,” Taylor said.
He expects big changes in the “value chain” and in how those elements will be incorporated in planning and manufacturing processing moving forward. He expects innovation to reign in 2021.
Taylor said Shell Global’s natural gas project in Beaver County, west of Pittsburgh, is an example of “value chain” thinking. The natural gas found in this region includes other chemical elements that can be extracted and used to manufacture something, not just as a public utility.
“Because it [natural gas] comes out of the ground with other chemicals, each one of those chemicals can be used in manufacturing. We can make stuff out of it,” Taylor said.
One of the Beaver County gas chemical compounds, ethylene, can be turned into polyethylene, which is used in a variety of commercial goods.
“Polyethylene can yield every kind of plastic, rubber, Styrofoam, solvents, adhesive and paint going into consumer goods,” Taylor explained
The Shell Global project is the first one in the eastern United States, according to Taylor. The project is expected to bring billions of dollars to Pennsylvania in private sector investment, and create hundreds of new jobs.
Filling traditional and emerging manufacturing jobs has been a decade-long campaign, and it continues to be a struggle, Black said.
Because of continued talent and skill shortages and retirements, workforce development continues to be a top priority in 2021.
“Before the pandemic, workforce was the number one issue, and that hasn’t changed,” Black said.
He said manufacturing companies are offering more schedule flexibility than ever before, like four-day on, four-day off work weeks, or working five out of seven days with weekends off.
“Knowing where things have to go, it’s probably a trend moving forward,” Black said.
Automation will continue to drive changes in manufacturing facilities, too, as employers cut costs and involve fewer physical workers on production lines. The shift to automation creates new career and job opportunities, as employees are promoted to oversee, program and maintain machines, rather than manage five people doing their jobs hands-on, he said.
“Covid has accelerated a lot of things – the general use of tech, the use of automation and retail trends. It has accelerated the future of work,” Black said.
As consumer behavior continues to change as a result of the pandemic and social distancing requirements he expects the avalanche shift to online shopping from home and delivery services to propel manufacturing.
As retail continues to transform manufacturers will need to make more consumables in line with what people want to have at home, Black explained.
“Changes in consumption trends [become] changes in manufacturing trends,” Taylor said.