Business is no longer usual due to the Covid-19 global pandemic.
Supply chains have been disrupted. Travel across borders have been curtailed. Consumer demands have also shifted from non-essential to essential items.
As a manufacturer, the future of your factories may look uncertain. For some, it may even look bleak as customer needs change radically to keep pace with global healthcare concerns and lockdown restrictions.
While this may be a challenging time for many, manufacturers using CNC machine tools can actually seize the fresh opportunities available in the market.
In this article, we will explore how the coronavirus pandemic affects CNC machining companies and other manufacturers, and suggest ways for you to pivot your factory operations to cope with the crisis and thrive over the short, medium and long-term.
How Covid-19 affects the Manufacturing Sector
Covid-19 is likely to affect many different manufacturing industries and sectors across the globe.
Aerospace and Aerospace Engineering Industries
The greatest impact of Covid-19 is seen in the travel and tourism industries.
With restrictions to travel applied across countries around the world, air travel may no longer be a luxury but a necessity. It is likely that only essential travel will be allowed for some time, and this will influence the number of planes needed by the different airlines around the world. This will influence the aerospace industry, resulting in a lower need for manufacturing aircraft and engine parts.
What about the automobile industry? Well, this sector has already seen major changes due to environmental rules and regulations worldwide – these changes are likely to further influence process supply chains and suppliers.
Demand for new vehicles are likely to be reduced as consumers limit spending on big-ticket items due to their economic uncertainties. This is already visible in the reductions in new car registrations worldwide.
We will also see a rise in demand for electric and hybrid vehicles in the short term. As consumers get used to the cleaner air in their environment (due to the lockdowns and movement restrictions), they will look at replacing their petrol running cars with greener technologies eg Hydro Technology.
Oil and Gas Industry
The world is still reeling from the impact on oil prices due to the oversupply by the OPEC nations. While the demand for oil products will likely continue, it is predicted that this could temporarily be lower than the pre-Covid days due to reductions in air travel, demand for new vehicles and reduced usage of existing cars.
However, this is likely to be cyclical. The need for oil and petroleum-based products will eventually pick up over the long-term once demand starts climbing back across broad swathes of the global economy.
Information Technology and E-Commerce
With lockdown orders and movement restrictions applied across the major cities around the world, Working From Home (WFH) and Home Based Learning (HBL) have greatly accelerated the need for technology. Fast Internet transmission and adequate bandwidth has now become the new gold.
This will impact the way in which we organise ourselves for essential work. Growing demand will be experienced for various electronic goods such as computers, laptops, smart mobile phones, cameras for video conferencing, communication systems, and even wireless ear phones, just to name a few.
E-commerce will also grow by leaps and bounds. This will affect the entire value and supply chain – from the need for servers and routers to trucks, vans, ships, and aeroplanes for transportation. Satellite and tracking technologies will also increase.
Medical and Healthcare Industries
As expected, medical equipment such as ventilators (for pneumonia patients) and Personal Protective Equipment (PPE) have grown in demand due to the Covid-19 disease. However, the demand is likely to be patchy across certain markets around the world. Thus, the challenge lies in relocating manufacturing to the point where such equipment is needed.
In Europe and the United States, governments have realised that almost everything which they need to handle the coronavirus outbreak is produced in China (medicine, masks, ventilators, medical equipment, etc.) or India (medicine). The sudden surge in demand, coupled with disrupted transport chains and plunges in production capacities have resulted in urgent life-saving equipment and medicines not being transported to the places of need.
To prevent this, it is anticipated that essential healthcare production will be relocated to the areas of need. This will result in a build-up of new manufacturing capacities and a change in supply chains.
Plan for the Short, Medium and Long-Term
As you can see, the outbreak shows how complex the global manufacturing supply chain is. Like a series of dominoes, one event could easily trigger changes in another.
While the novel coronavirus crisis can be challenging for everyone in the immediate future (and beyond), it gives manufacturing leaders like you the chance to revisit your current factory operations.
Review your current business operations and develop Business Continuity Plans (BCPs) to manage your short, medium, and long-term needs. While consumer demand may change during the immediate and short-term, things are likely to return to a new normal over the medium and long-term. Find ways to maintain your CNC machine tools using preventive maintenance measures.
Consider the impact of new technologies and innovations – are there ways for you to retool your machines to produce in-demand parts and components? Can you incorporate automation and fresh manufacturing practices to modify the components being machined?
Do also consider if there are opportunities to use the lull period to train and reskill your machine operators. They could learn new techniques of working with more advanced CNC machine tools, or to brush up their core machining competencies.
Switch to Flexible Manufacturing and Multi-Tasking CNC Machine Tools
Time and time again, manufacturers have demonstrated how resilient they can be in adapting to shifts in consumer demand. Decades ago, companies shifted their focus from the then booming hard disk drive manufacturing industry to oil and gas products. The challenge – and opportunity – which now arises is for CNC machining specialists to shift from industries such as oil and gas to medical and other higher value industries.
To pivot successfully, manufacturers need to invest in higher-end CNC machine tools that are equipped to handle automation and flexibility in manufacturing. Gone will be the days when low cost standard machine tools are used. Smart CNC machine tools or multi-axis CNC machines allow your factory to adapt to frequent changes in design, quantity, and quality, and are ideal for an uncertain economy.
Flexible manufacturing practices also allow you to keep your manpower costs to a minimum. Employing the “One Machine Tool – One Operator” mode of working will not be cost-effective any longer. Automations will have to be selected and designed to suit individual manufacturing needs and requirements. Beyond speed, you need to ensure that there is stability and ease in changing over your systems – doing so allows your factory to run operations around the clock with minimal human intervention.
A good way to implement flexible manufacturing is to adopt a Flexible Manufacturing Cell (FMC). Such systems comprise the same machine types grouped in cells or selected and different CNC machine tool types (Milling, Turning, Washing, Measuring) to optimize shopfloor productivity.
(You can read more about flexible manufacturing practices for CNC machine tools here.)
Using better quality CNC Machine Tools and Multi Axis flexible machines will help you to increase demand during a downturn, by allowing you to shift or change the manufactured parts to suit market needs.
Summary of Strategies
To recap, here are the various strategies which you should consider to keep your manufacturing line afloat during the global pandemic:
- Adopt more flexible manufacturing practices and systems
- Focus on making parts that are in demand such as those needed by the medical or IT sectors
- Review industries and their supply chains and customer types
- Explore possibilities for automation and the use of robotics or handling systems for remote working monitored from any location (for example Hwacheon M-Vision Pro)
- Switch your CNC machine tools to higher-end models that are able to handle multiple differentiated manufacturing needs
Beyond adapting for the present situation, you should also consider ways to prepare your factory for the future recovery:
- Keep a core team of engineers and machine operators and maintain flexible hours / shorter work weeks
- Ensure that you keep sufficient capacity and staff strength to cater to the new demands
- Maintain and service your machines to keep them in order when needed (Hwacheon offers preventive maintenance and regular periodic checks)
- Train and retrain and up-skill your operators
- Review the overall operations and efficiency of the operation. Consider adding options to existing machines to optimize efficiency.
- Invest now in multi-purpose CNC machine tools which offer higher flexibility for the near future needs and requirements.
We hope that this guide has been useful for you during this difficult time. Contact us if you need help to set up a more resilient manufacturing system – we’ll be most happy to help.