PwC: how manufacturers can stay competitive amidst COVID-19
Manufacturing global takes a look at PwC’s strategy for manufacturers looking to gain a competitive advantage amidst the disruption of COVID-19.
When it comes to a crisis like COVID-19, PwC’s Global Crisis Center explains that short term reactions around mobilisation, medium term stabilisation efforts and long term strategizing and transformation plans are required.
“However, we believe manufacturers should strategize now on how they can transform and position their organisation in ways that will give them a competitive advantage and help create greater resilience in a post-crisis world. This ought to be done on the heels of the disruption, throughout the crisis and during recovery,” says PwC.
The strategy for manufacturers
Dealing with disruption
“The timeline for the disruption stage of the pandemic is not fully known, given the number of factors involved: the virus’ contamination period of at least two weeks, asymptomatic carriers, limited testing, and no vaccine or treatment,” comments PwC.
However the company does stress that there will be a recovery at some point, with government and fiscal policies likely to aim for a V-shaped recovery curve.
According to a recent survey conducted by PwC in the US, “67% of CFOs of industrial products companies plan to take advantage of government support programs provided by the CARES Act, with tax payment deferrals and extended tax deadlines cited as the most common types of support they’re considering. Yet, it is unclear to what degree such measures will help mitigate the disruption unleashed by the virus.”
However, the company highlights that given the unclear nature and length of the current disruption, it’s important for leaders to plan a course of action for the eventual recovery, helping them to get ahead of the curve quicker.
Although it may seem premature, PwC highlights that it is important to gear up for this next stage, otherwise it may be too late for manufacturers if they wait until
Many businesses are still focused on the triage-like disruption. While the economy is still in dire condition, it may seem premature or even incongruous to be gearing up for the next stage of the operations strategy cycle: recovery. However, we believe it may be too late if manufacturers wait to act until there are clear signs of a recovery.
“That’s a lesson gleaned from the US recession a decade ago, when the global economy was crossing the same threshold we’re now facing. The companies that emerged from that recession strongest (which we call the leaders), moved faster, decisively and more agilely during the recovery phase than their laggard peers.”
According to PwC analysis, leaders:
Set their course in 2009 and by 2010, ramped up their efforts
Increased capital expenditures by 27% and accessed cash and liquidity
Set M&A targets on distressed companies or suppliers
Identified growth areas of the business and committed capital
This helped organisations to rebound quicker than their peers. “This time around, it’s important to be mindful of such lessons,” comments PwC.
“These leaders focused on transforming operations through recovery, improving the areas that drive growth and agility.”
“Throughout the recovery period, the global effects of the COVID-19 outbreak will reveal changes (some may be permanent) to consumer behaviors and supplier positions. Companies that quickly and thoroughly understand these changes can create a distinct competitive advantage in this next stage of the life cycle,” states PwC. “COVID-19 has been a dramatic reminder that businesses need to be nimble to respond to sudden shifts in demand. Leaders will codify learnings from the disruption and recovery parts of the cycle, and accelerate their transition toward smart, adaptive and resilient ecosystems.”
“At the height of the COVID-19 pandemic, governments and citizens turned to industrial manufacturers for critical support — and the industry responded. Companies quickly ramped up production and innovated to produce ventilator parts and personal protective equipment in large volumes. That underscored how crises provide opportunities for businesses to earn trust and enhance reputations,” comments PwC.
The company explains that post crisis it will be important for companies to build on the trust they have established and seize the opportunities to help reshape the markets and their competitive positions.
“Those that get this right will come out on the other side with very different operations, products and services than they had before COVID-19 hit,” adds PwC.
Traits that will set them apart include:
Decision support tools, for speed and agility in decision-making
Investment in advanced supply chain technology, for clearer and near-real-time visibility in production, inventory and supply
Refocused products and services
Ramped-up application of digital technologies to understand and anticipate customer behaviors
Strengthened and diversified value-chain ecosystems
“Because no economic shock is the same, predicting the future is a fool’s errand. However, while the sector may now be grappling with a different sort of economic crisis, it can be sure of one thing: There will be a progression of waves in this crisis, but it will have an end-point. Forging a well-informed strategy on how to get through the waves of this crisis and then executing on that strategy will help chart a course through what now may seem unnavigable and choppy waters,” concludes PwC.
For more information on manufacturing topics - please take a look at the latest edition of Manufacturing Global
Fluent.ai x BSH: Voice Automating the Assembly Line
Fluent.ai has deployed its voice recognition solutions in one of BSH’s German factories. BSH leads the market in producing connected appliances—its brands include Bosch, Siemens, Gaggenau, NEFF, and Thermador, and with this new partnership, the company intends to cut transition time in its assembly lines.
According to BSH, voice automation will yield 75-100% efficiency gains—but it’s the collaboration between the two companies that stands out. ‘After considering 11 companies for this partnership, we chose Fluent.ai because of their key competitive differentiators’, explained Ion Hauer, Venture Partner at BSH Startup Kitchen.
What Sets Fluent.ai Apart?
After seven years of research, the company developed a wide range of artificial intelligence (AI) software products to help original equipment manufacturers (OEM) expand their services. Three key aspects stood out to BSH, which operates across the world and in unique factory environments.
- Robust noise controls. The system can operate even in loud conditions.
- Low latency. The AI understands commands quickly and accurately.
- Multilingual support. BSH can expand the automation to any of its 50+ country operations.
How Voice Automation Works
Instead of pressing buttons, BSH factory workers will now be able to speak into a headset fitted with Fluent.ai’s voice recognition technology. After uttering a WakeWord, workers can use a command to start assembly line movement. As the technology is hands-free, workers benefit from less physical strain, which will both reduce employee fatigue and boost line production.
‘Implementing Fluent’s technology has already improved efficiencies within our factory, with initial implementation of the solution cutting down the transition time from four seconds to one and a half”, said Markus Maier, Project Lead at the BSH factory. ‘In the long run, the production time savings will be invaluable’.
Future Global Adoption
In the coming years, BSH and Fluent.ai will continue to push for artificial intelligence on factory lines, pursuing efficiency, ergonomics, and a healthy work environment. ‘We started with Fluent.ai on one factory assembly line, moved to three, and [are now] considering rolling the technology out worldwide’, said Maier.
Said Probal Lala, Fluent.ai’s CEO: ‘We are thrilled to be working with BSH, a company at the forefront of innovation. Seeing your solution out in the real world is incredibly rewarding, and we look forward to continuing and growing our collaboration’.