Similar to many other industries, the coronavirus pandemic has triggered a significant disruption in the manufacturing and packaging sector in the country. There is no doubt that the disruptive impacts of the virus are now rippling throughout the international manufacturing supply chains, such as in the auto sector.
This is because automakers depend heavily on China for many auto parts. And it is worth noting that some major and reputable automakers have temporarily closed plants in Japan and South Korea because of supply shortages. On the other hand, others are racing to locate alternative sources of supply in European countries during this pandemic.
The coronavirus pandemic caused widespread economic hardship and concern for consumers, communities, and businesses across the world. It is worth noting that manufacturers are now facing new and unique challenges triggered by the crisis, while forest, packaging, and paper producers in the US are no exception.
According to a survey of the NAM (National Association of Manufacturers), about 80 percent of manufacturers expect that this health crisis will have a considerable financial impact on their business. While many manufacturers shut down, many others received requests to help produce essential medical supplies to help curb this pandemic.
And it is no secret that all manufacturers and packaging companies are facing severe challenges with supply chain management, online security, as well as the continual obligation to keep their employees as safe as possible. If you are looking to supplement your manufacturing capacity, you can hire Lab-Clean Inc. for contract manufacturing of products, like premium furniture polish and fabric protectants.
Supply Shortages Coupled with Increased Prices
Note that manufacturers will have to rely on inventory stockpiles until affected factories and units can resume production. However, keep in mind that these resources are very limited and will eventually run out, which is one of the biggest concerns. And we can also expect to see shortages as well as price increases throughout supply chains in case alternate sources are not safe when current inventory runs dry.
This is another huge risk for companies in the manufacturing and packaging industries. You have to keep in mind that a brand is a type of promise. This is why companies have to consistently deliver on that promise in order to keep their brand strong. You probably know that reputation takes a severe hit when companies fail to deliver on that promise. This is true even if that failure is because of forces beyond the company’s control.
Did you know that several manufacturers in the US have altered product lines in order to keep business going? For example, automakers, such as Ford and GM, have decided to help medical device makers raise the production of ventilators and other devices by acting as contract manufacturers. On the other hand, textile producers are now making masks and medical gowns rather than apparel. While these are noble initiatives, switching gears so suddenly is likely to introduce its unique set of IP (intellectual property) risks and other reputational risks.
On the other hand, there is a positive side to it. The way manufacturers respond to the coronavirus delays, and shortages will be a crucial dimension of long-term brand preservation. It is worth noting that manufacturers’ response to COVID-19 is also an opportunity for competitive differentiation. Keep in mind that during a crisis, transparency, demonstrated leadership, and communication are highly valued and may earn these companies more customer loyalty.
Sustainability Triggers Health Concerns
We all know that sustainability has been a huge trend, especially in the last few years, and a lot of companies switched to more eco-friendly and green alternatives, like removing single-use packaging and replacing plastic materials. However, COVID-19 is raising concerns over the health and overall safety of products that use “unnecessary packaging.”
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Cyber Security Vulnerabilities
There is no denying that more reliance on advanced industrial control systems and automation creates more exposure for cyber breaches, which most companies cannot afford. And as many functions are now off-site, the risks to manufacturers are more prominent.
Although most assembly-line workers in the industry will continue working on the factory floor, many other employees shifted to remote work because of social distancing requirements. This is why cybercriminals and hackers can now easily get access to internal company networks via employees’ personal devices and routers, placing sensitive data and intellectual property at risk.
Travel restrictions, quarantines, and workforce shortages around the world can make it difficult or even impossible for impacted manufacturers to meet their contractual obligations. It is worth noting that a delay or shortage of products can considerably impact a company’s reputation and can result in lost or disgruntled customers or even severe legal consequences for these companies.