updated - July 8, 2020 Wednesday EDT
The coronavirus pandemic has been going on for almost half a year now. While most of us are hopeful that it will resolve itself one way or another over the next few months, it is looking increasingly likely that we are going to be dealing with its effects for years rather than months. Unless there is significant progress made in the race for a Covid-19 vaccine, we can't expect any sense of normalcy to return soon and much of our lives will continue to be disrupted for some time yet.
The global manufacturing industry has been hit hard by the Covid-19 pandemic, and this has had knock-on effects for businesses across a multitude of different sectors. Governments around the world have had to take dramatic measures to limit the spread of the coronavirus, and this includes closing down workplaces that are non-essential and/or cannot operate safely in the current circumstances. Human history is full of examples of temporary short-term measures taken in the wake of major crises that ultimately become fundamental shifts in societies and economies.
Covid-19 is far from the first major global crisis that our civilization has had to weather. While it might be unlike anything else that we have witnessed in modern times, we can still look to other historical events to get an idea of what the long-term impacts of the disease might be.
Covid-19 is often compared to the Great Depression in terms of the scale of its impact on the economy. The Great Depression saw a wholesale redefining of the role of government within the US financial system and ultimately the global financial system. Any American who has family that lived through the Great Depression will know that many of the penny-pinching measures that became commonplace at the time are still practiced by many of those who lived through that crisis.
In the aftermath of the second world war, the decimated economies of Western Europe and the United States necessitated the introduction of unprecedented fiscal stimulus packages. These stimulus packages were aimed at reviving industries that had been forced to lie dormant while resources were focused on the war effort. It is partly because of the success of the stimulus packages that the United States was able to maintain its superpower status in the decades following the war.
Finally, the financial crisis of 2008 accelerated the transition from a primarily ownership-focused economy to one that prioritized experiences. In the last decade, we have seen a dramatic shift towards products that are provided as a service, and an increasing reliance on cheap offshore production in order to stay competitive.
Exactly what the long-term impacts of Covid-19 will be remains to be seen, but we can already see some of the impacts beginning to manifest today. These give us some indication of the trajectory that we can expect society to take in the wake of this unprecedented crisis.
What separates the Covid-19 pandemic from other economic shocks in modern history is that Covid-19 is impacting demand, supply, and the workforce all at the same time and on a global scale. This has led to a situation where businesses that produce and deliver essential goods to consumers are struggling to meet demand, whereas other businesses have experienced a precipitous drop in demand that they are now struggling to cope with. Every manufacturer has been impacted by Covid-19 to some extent, helped in large part by our heavily intertwined global supply chains.
Not only are manufacturers dealing with the impacts of reduced demand, but they are also having to contend with the strict social distancing measures that are now in place. The requirements to keep all workers at least six feet apart from one another at all times are making it difficult for many manufacturers to keep their production lines open. There are many professions where remote working is possible, but manufacturing is not one of them. This means that manufacturers have to choose between operating with a reduced crew of staff or ceasing their operations entirely.
Exactly how this will all play out in the long run remains to be seen. No-one can make any predictions with certainty right now. However, some of the changes necessitated by Ccovid-19 look likely to become permanent. Most notably, many people are now aware that their jobs can be done from home just as easily as they can from an office. Going forward, it is going to be increasingly difficult to convince people to sign up for jobs that require them to commute to a corporate office when there will likely be a whole host of remote working opportunities available for them. Remote working doesn't just benefit workers, it also benefits employers themselves. Given that remote working is a win-win for the most part, it seems unlikely that many people will be eager to move away from it now that it has been so well established.
Another likely long-term impact of the Covid-19 pandemic is that a growing number of businesses will be looking to bring their manufacturing operations back home. Overseas manufacturing has enabled businesses to access cheap labor easily for the last couple of decades. However, with many nations unable to source vital supplies for themselves, it is now becoming clear that a globalized supply chain presents problems of its own. Most significantly, all it takes is one disruptive event to bring the entire system to its knees. With domestic manufacturing, nation-states have more control over the supply of vital products.
Businesses across the board are going to have to rethink their approach to manufacturing in the wake of Covid-19. Not only has the pandemic revealed some previously unacknowledged issues with the current system but it has further highlighted problems that were already in place.
Businesses need to be much more careful about how they spend their money and who they spend it with. This has always been important but has taken on a new urgency now that we have seen how fragile things really are. This is why some businesses are now looking at domestic manufacturing instead of overseas.
However, it would be a mistake to do away with overseas manufacturing entirely, as it offers a great many significant benefits. For example, looking for a manufacturer offering injection mold in China is still a smart move for any business that needs to produce prototypes for its next product, for example, this supplier offers molding injections to produce cost-effective prototypes in China. Using plastic injection molding remains one of the most cost-effective means of producing high-quality prototypes and prototype injection molding services like Rapid Direct's will continue to be important going forward. They are a highly-rated injection molding supplier and offer aluminum injection molds as well as plastic.
The Covid-19 pandemic isn't going to go away any time soon. It is essential that businesses of all types have plans in place for tackling this crisis and ensuring that they aren't hurt by the worst potential impacts it might have. Everyone has been hit hard but manufacturers are finding it particularly difficult to maintain productivity in the current situations. However, that doesn't mean that it isn't possible.
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