As COVID-19 continues to impact economies across the world, many industries are still in reactive mode. The manufacturing industry is no different and has already seen a 20-30% drop in demand which is expected to last until 2021, data from the Purchasing Managers' Index by IHS Markit shows. The reason: the definition of essential products has changed and visibility into future demand has been reduced. This has led manufacturing industries across essential and non-essential products to delay or cancel their new product launches and respond to the pandemic by changing their product portfolio. For instance, essential product manufacturers of high-tech medical equipment, disinfectants, and personal protective equipment (PPE) have expanded their product portfolio and set up product development and production facilities to meet the sudden spike in demand. On the other hand, traditional product manufacturers such as those in the aircraft industry are trying to cope with the sudden downfall in demand, while automotive original equipment manufacturers (OEMs) have demonstrated innovation and agility around asset and resource management and re-tooled themselves to manufacture medical components.
As the future remains uncertain for all manufacturers, an immediate knee-jerk reaction to the pandemic is to reduce spend on research and development and innovation and free up cash to sustain current operations. But any changes to expenses need to be deliberated carefully, as any delays in product launches and inappropriate intervention of product portfolios can result in heavy business losses to a company. This is because product development is the only way an organization can improve its financial condition when the market revives.
For manufacturers to gain and sustain competitive advantage, they should draw up their current roadmap to align with the future market needs. And the future of manufacturing is neural, which is defined as an intensely networked set of partners aligned to a common purpose, where the value chains are responsive, adaptive, and personalized, with intelligence built on the ‘edges’ of the network. By embracing neural behaviors, a manufacturer’s product development function can build intelligence in its operations, collaborate with its value chain partners, and be adaptive on the product portfolio needs of the market.
As Winston Churchill once said, “Never let a good crisis go to waste”, some imperatives in product development can help manufacturing companies to not only sustain focus amid these trying times, but also leverage the current situation as an opportunity to embrace a robust and future-proof business strategy:
⦁ Virtualize everything possible: This has long been a part of the to-do strategy of research and development (R&D) companies. Though some firms have already made strides in this direction, some are yet to gain ground. The product development domain offers significant opportunities to embrace virtualization for collaboration by adopting it across areas including ideation platforms, design tools, prototyping, and validation through digital twins and augmented and virtual reality.
⦁ Automate at extent: The ongoing downtime is the perfect opportunity for organizations to explore automation possibilities. Engineering process automation and model-based working methodology, such as rule-based parametric design principles, can drive system-driven processes and machine-first response models. These aid firms in maintaining agility and speed in product development.
⦁ Adopt an agile mindset: As consumers increasingly adopt a minimalist product buying behavior, ensuring optimal value for them is key to sustaining through this crisis and for maintaining continuity in the future. This requires transitioning from conventional product development models to adopting agile ways of working that provide incremental value to the customer. This can help manufacturers continue their businesses, build out-of-the-box strategies, learn fast, and reimagine complete product lines, with strategic focus on asset and resource management.
⦁ Enable collaborative processes and platforms: Collaboration supports the principle of design anywhere by leveraging a completely distributed workforce. It fosters reuse and engineering efficiency while ensuring the adoption of modular strategies as a way to optimize product development.
COVID-19 is a test of time and demands all-round flexibility to sustain business-as-usual operations. A mindset that involves adopting new digital tools, agile development methodologies, and automated processes to work virtually with diverse teams, is critical for the manufacturing industry to sustain itself during these unprecedented times. Manufacturing organizations also need to overcome vulnerable cybersecurity risks for intellectual property in the new way of working. They must continue to focus on their product development programs which are critical for restoring their financials as the market revives. This will not only set an example for the future way of working but will also redefine business continuity planning with strategic focus on product development.