Impacts of Global Pandemic on Manufacturing Automation and Strategic Planning
This article appeared in the March 2021 issue of MiMfg Magazine. Read the full issue and find past issues online.
COVID-19 has impacted businesses around the world by disrupting supply chains, impacting cash flow and accelerating the pace of digital transformation. However, instead of dwelling on the negative impacts, it’s time to plan for the future. Companies need to develop a strategic comeback plan to guide them on the path of growth. Here are some recommendations to put businesses in the best future position.
Strategic Planning Advice: Economic slowdowns are a good time to prioritize projects that businesses never seem to find the time for. With this opportunity, owners should think about the opportunities that will be available on the other side of the slowdown and determine how to set themselves up for success. These four strategies can advance businesses post-pandemic:
- Develop new products, applications and services
- Standardize and improve business processes
- Explore business transaction opportunities
- Focus on short- and long-term cash forecasting
Develop new products, applications and services
The slowdown in customer activity, combined with government programs, intended to help employers to retain employees, means companies may have capacity to develop new products or services. Businesses are shifting toward automation amid COVID-19, not only to increase ROI, but also to save lives. The pandemic revealed the supply chain’s sensitivity to disruption and the need for more automation solutions.
- Examine new applications for existing products
- Consider new products or product features
- Leverage automation and data
Standardize and improve business processes
Now is also a good time for businesses to refine and improve internal processes. This involves taking a closer look at three distinct, but equally important, areas of operations: product development, financial management and data analytics.
- Product development
- Financial management
- Data analytics
KPIs are useful for evaluating the impact of implemented changes and include metrics, such as employee utilization, revenue by employee, day’s cash on hand, gross profit and gross margin. Evaluating these KPIs will help business owners to track financial performance and plan for recovery. Companies that follow this guidance will be one step closer to converting transactional data into actionable insights that will help them to plan for a variety of recovery scenarios.
Explore business transaction opportunities
If considering buying or selling a business at some point in the future, now is the time to prepare. Start defining aspirations, getting finances in order and taking the right steps forward.
- Consider family-wealth transfers
- Exit plan
- Baby-boomer retirement trends
- Retain key employees
Focus on short- and long-term cash forecasting
Here are some ways for businesses to free up cash flow to survive the downturn and accomplish long-term goals.
- CARES Act
- R&D tax credits
- Government loan programs like the PPP and ERC
- Cost segregation studies
Focusing on these best practices can help put businesses on a path of success as they navigate the pandemic and adapt to remote working environments. 6
Clayton & McKervey is an MMA Premium Associate Member and has been an MMA member company since February 2018. Visit online: claytonmckervey.com.
About the Authors
Tim Finerty is a business consultant with a proven track record of helping growth-driven companies in the industrial automation sector succeed. He may be reached at firstname.lastname@example.org.
Bryan Powrozek is a Senior Manager in Clayton & McKervey’s Industrial Automation practice, focused on Research & Experimentation Tax Credits. He may be reached at email@example.com.