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COVID-19 — Restarting Your Future: Manufacturers Maximising Recovery

Posted on 03 April 2020

The COVID-19 pandemic and consequent government measures to slow its spread have severely affected the global economy. At the start of the pandemic, many manufacturers shut down production following supply chain interruptions, affecting demand, supply, and workforce availability.

As many countries are now easing restrictions, manufacturers and other businesses are beginning to return to work. For manufacturers, in addition to employee safety, opening factories will require careful coordination involving checking and restarting machinery, coordinating suppliers, and logistics timing.

Returning to previous operational levels will not be easy, and recovery is likely to be volatile and uneven. Business continuity plans created to build operational effectiveness following natural disasters, power outages, and cyber incidents may not take into account everything needed to recover from a global pandemic.

For example, businesses will need to adopt measures for social distancing, including reducing numbers on site, which will add pressure on existing employees and processes. Providing protective supplies for all employees will also be a concern.

Understanding supply chain issues will be critical, including who has inventory — raw materials and/or parts — and is operational.

Key Considerations for Manufacturers

Organisations will need to consider a broad set of risk issues as they reopen, including:

  1. Risk profile: Revisit your risk register, account for changes in your company's risk profile, particularly those related to revised supply and demand factors, and adjust your strategy accordingly.
  2. Operational readiness: Many manufacturers will be under pressure to return quickly to pre-pandemic production levels, while some will make new products. Inspecting, re-starting, and maintaining machinery will be key, including obtaining required certification.
  3. Employee health and wellbeing: Revise your risk assessments and safety systems to take into account COVID-19-related modifications that may include social distancing, temperature screening, daily health questionnaires, redesign of assembly lines, supply of personal protective equipment, and separation of shifts.
  4. Supply chain analysis: Establish your key supply chain vulnerabilities, map where replacements are necessary and available, and implement corrective actions. Plan for potential risk considerations, including insurance needs, from changes in inventory.
  5. Product and insurance efficacy: Changes in workloads as your facility starts up — possibly with new products — will require a review of product liability and contracts. Work with counsel and your risk adviser to review other lines of insurance to align with your risk register.

COVID-19 will likely spur changes including further automation and revisions in supply chain and materials sourcing, such as finding components closer to home. Manufacturers that plan and act on such changes will position themselves for growth while protecting brand and reputation. The first step is to reopen closed facilities safely and efficiently.

Anthony Monaghan