Building Resiliency in the Age of COVID-19

The world’s attention is on the new coronavirus, COVID-19,  and the damaging effects it has on human lives and the global economy. The outbreak has created massive amounts of uncertainty for large manufacturers and leaves questions about how to respond up in the air. Unpredictable variables like the nature of a new virus, political responses, and even human behavior can elevate the risks for companies hoping to stay afloat. Despite this, businesses have shown their ability to adapt. Employing adaptability will be crucial to sustainable means of supply and production now and in future unknown circumstances. 

Battery Production as a Case Study

Chinese battery production capacity for 2020 is expected to be reduced by around 26 GWh as a result of COVID-19. As a global battery manufacturing powerhouse, China is responsible for supplying batteries to automakers around the world. In the early days of the coronavirus outbreak, when COVID-19 was mostly concentrated in mainland China, companies whose means of production were located outside of Asia were expected to avoid the manufacturing halts. Now that the outbreak is worldwide, companies outside of Asia, including vehicle manufacturers, are not exempt from disruptions of operations. 

Recently, China has experienced few new cases of COVID-19, and some of the country’s operations are slowly going back to normal. While China was hit hardest first, this could mean that they bounce back sooner than many other affected countries. The shifting perspectives have been presented just a few weeks apart, and it’s reasonable to expect further speculation on the matter. Instead of attempting to find one solution to an evolving challenge, we should learn to advance technology under ambiguous conditions.

Adapting to Uncertainty 

Divesting based on today’s data may have negative impacts tomorrow, and it’s difficult to predict exactly how decisions on production lines will impact an industry in the long term. A global crisis will always have adverse impacts, but there are ways to lessen damages to productivity by adopting proactive rather than reactive approaches. One way to do this is to implement flexible market response tactics to global events. 

Examples of market flexibility in today’s situation include shifting manufacturing capabilities to produce alternate goods such as ventilators, surgical masks, and other medical equipment. BYD, a Chinese electric automaker, is mass-producing face masks and bottles of disinfectant in response to the outbreak in China. BYD employed its engineers to redesign its production line to manufacture these high demand necessities and was able to source 90% of the manufacturing parts internally. This shift in production is rare and considered only under extreme circumstances, but the ability to adapt and provide critical resources could be crucial to sustaining a business and contributing to global relief efforts. 

Companies should make proactive operation plans to adjust for changes in demand and production capacity. Flexible response applies not only pandemics, but also to climate change events, which will become more frequent and intense in the coming years. By designing measures that plan for adverse events, companies and industries build robust manufacturing capabilities that adapt to the world’s changing needs. Additionally, manufacturers develop a competitive edge with the capability to quickly adjust production or launch new products regardless of a world event.