Masks, face shields and social distancing won’t be the only things changing about US manufacturing in the post-COVID-19 world. According to a new survey from Thomas, one in four US manufacturers may expand their industrial automation (possibly fewer workers needed), and a whopping 64% will likely bring production and sourcing back to North America (goodbye, China).
As a provider of solutions for product sourcing, supplier selection and industrial marketing, Thomas surveyed 1,000+ North American manufacturers and their suppliers online to see how they’ve been impacted by the global coronavirus pandemic. The companies ranged in size from less than $5 million to more than $500 million in annual revenue.
"The COVID-19 pandemic will fundamentally redefine how industrial companies approach their supply chains and will further advance the digital transformation of manufacturing,” says Thomas President/CEO Tony Uphoff. At the same time, "It's encouraging to see that even in the most uncertain…times, North American manufacturing is adeptly…pivoting production to address the urgent need for personal protective equipment (PPE) and other medical supplies, hiring additional skilled workers, and supporting the industrial economy."
Some additional survey findings:
- Job Security: 56% of manufacturing companies have not laid off employees due to COVID-19, and 30% are actively hiring.
- Impact of Non-Essential Businesses: Almost two-thirds report their business is affected by the shutdown orders impacting other non-essential businesses, with transportation (77%), automotive (75%), construction (70%), and agriculture (69%) most drastically hit.
- Financial Aid: 63% of manufacturers have applied for financial assistance and of that group, 60% report they applied for the Paycheck Protection Program, 17% applied for Economic Injury Disaster Loans, and 9% say they applied for Debt Relief and Express Bridge Loans from the Small Business Administration.
- In-Demand Materials: To stabilize supply and keep production on schedule, 42% of the manufacturers surveyed say personal protective equipment is the most vital item.
To get a copy of the Thomas Industrial Survey: COVID-19 Impact on North American Manufacturers.
My Thoughts: Industry 4.0 and other manufacturing automation is not so much about reducing your workforce when it comes to coating, laminating, metallizing, and package-printing and converting. It’s more about getting one machine to talk to another and share information to increase efficiency, speed troubleshooting / defect-elimination and boost productivity. I really don’t think you’re going to see a 10-color CI-flexo press, a solventless laminator and a dual-turret slitter/rewinder all linked together and running themselves any time soon.
However, I do think rather quickly (as in the next five years) we will see plenty of reshoring of manufacturing coming back home to America. It never made sense to put too much of your supply chain into the hands of others. This won’t come cheap, but it’s for the best when it comes to our personal and national security.