April 17, 2024

Manufacturing businesses need to invest into production automation and diversify supply chain and sales channels to adapt to the new normal, as risks arising from the Covid-19 pandemic are forecast to persist over the medium and long-term.
“Disrupted supply chains, social distancing measures, production capacity issues, and economic uncertainty are the key challenges that can be tackled by increasing investments in production automation and sales channels,” said Justine Liuima, senior consultant at Euromonitor International.
In a Euromonitor Digest, an online publication of the Department of Trade and Industry-Export Marketing Bureau (DTI-EMB), Liuima said production capacity and supply chain issues are forecast to continue, thus hindering the performance of manufacturing companies.
“The global supply chain problems are likely to persist until the fourth quarter of 2020 as it will require significant capital and time investments from the companies until supply and transportation networks are fully restored,” he said.
Liuima said digitalization and production of automation tools would help the companies to increase operating flexibility and provide more effective tracking of the supply chains.
Such tools would also assist to increase productivity without increasing the health risks to the employees, he said.
Liuima said manufacturing companies are predicted to accelerate efforts to create regional supply networks and be closer to end consumers over the next two to three years, as supply chains are set to become more regionalized.
“This would help to diversify geographic risks and add more flexibility when dealing with supply chain disruptions,” he added.
Liuima said supply chain diversification is relevant especially for manufacturing of critical goods, such as food products, pharma ingredients, machinery, and electronics parts.
He further said ongoing economic uncertainty and weaker demand for industrial goods is expected to encourage diversification of sales channels.
“During the Covid-19 outbreak, many B2B (business-to-business) customers switched to online buying and are likely to continue buying online after the lockdown,” he said.
Liuima said manufacturing firms are also expected to invest into e-commerce solutions as it helps to expand the geographic base of potential clients and cope with ongoing travel restrictions. – Press release