In light of the recent Coronavirus outbreak, around the world - particularly in China - we are seeing various manufacturing sites get affected and come to a halt in production. This results in a heavy hit on the global supply chain for the product(s) of a company and prevents the proper deliverance of things that can be crucial to the workflow.
From a management perspective, both from a small product management team within a global corporation or upper-level management, how would they be affected by situations like these?
Obviously this type of catastrophe will have massive ramifications in a world where the majority of manufacturing is conducted in China. A loss of supply of any key raw materials of finished goods can dramatically affect the way a business conducts business. I did a co-op at J&J and while I Was there a friend was working on a project to diversify the sources of a certain key ingredient to one of their products. The current supplier was just one company that got their chemical from just one location. This was in southeast Asia where typhoons are quite common. There had been a close call when production had been taken offline for a short period of time, so upper management decided that the supply chain portion of the business needed to identify and evaluate potential replacements for that specific ingredient. On a smaller scale, this will hit manufacturing the hardest. If a company that makes replacement hips sources one of the metals it uses from China, they now have to quickly find a replacement supplier or shut down the production lines which will have massive ramifications for the company and more importantly the patients.
The impact of Coronavirus on Chinese manufacturing is proving to have a huge impact also on global manufacturing, because many companies depend on Chinese-made parts for their own products. From a management perspective, this is unfortunately an issue that is out of their control, but regardless companies must be prepared to adapt to this situation. Within a company, upper management is responsible for determining the strategy, and middle management will implement that strategy, so in the case of supply chain disruption upper management may decide on a shift in strategy to prioritize different products for the time being. Thus middle management will need to determine the specific tactics that need to take place to accomplish the new strategy, which may result in current projects being halted if they involve the products experiencing materials shortages.
As part of the new product development for a private medical devise company, the coronavirus had a great impact on our fixture deliveries. Management had to adapt drastically in some instances. Product had to be manufactured in the U.S. increasing prices by more than double. A catastrophe like that can never really be predicted but allowing leeway in deadlines is very important.
When there is a global emergency companies need to adapt, otherwise they won't be known as a reliable source of goods which will seriously hurt their value and business. The first thing a company needs to do is take responsibility and convey to their customers their problem and why the problem is occurring. Also the company needs to figure out what they can do to be as close to par on fitting their customers with their product. A general rule is probably to just try their absolute best to get the product to the customer in a timely manner, because after that what else can you do?
As an intern for the new product development team at a contract medical device manufacturing company, the impact of this was something that I was able to see firsthand. A project that I was working on with the team required parts that were manufactured overseas. In terms of management, the project managers and upper-level management were proactive in reaching out to the customer and expressing any concerns to reach solutions. Therefore, the impact such situations had on the project was that it altered the priority and deadlines of tasks. Since all companies were experiencing uncertainties during this time, I believe the level of cooperation and understanding was greater between companies working together. Overall, the occurrence of such situations would require management to communicate directly with the customer or department heads and express proposed solutions to address the current setbacks.
If faced with such a crisis where my company’s manufacturing sites can not meet the demands of what the company requires, manufacturing of products would definitely see a decrease. From a supply and demand perspective, prices of raw materials or labor would also see an increase. Tough decisions between upper management would have to be made to consider attaining the same products from different suppliers for example. However, if the slowed production does not meet the supply and demand of our products, management would most likely need to meet and discuss possible alternatives to maintain the usual production. Considering where else manufacturing can be done and/or acquiring raw materials from elsewhere would have to be discussed amongst upper management.
The corona virus catastrophe has affected manufacturing at a greater level. Industrial manufacturing cannot be carried out remotely and the global teams does not work in this case. Many workers had lost their jobs due to the pandemic and most of the industries stopped production for a while which effected the availability and sales of the products. Many companies has their manufacturing plants in china and due the catastrophe the exports from that country have been completed banned which affected the industries at a higher rate. There has been problems with the manufacturing in various countries.
From a management perspective, both from a small product management team within a global corporation or upper-level management, how would they be affected by situations like these?
For a small product management team within a global corporation, it depends on how management values their employees. I know many large industries furloughed or fired their employees right at the start of the virus to save money from personnel perspective as well as ensure their numbers at the end of the year look as best as possible. This caused delay in developing products and prototypes for the design teams that are the smaller teams within this global company. This all happened during the initial three months of the virus when it was hard to calculate the loss of the company during this pandemic. After reassessment, the global companies either realigned their organization to find ways of placing human capital on teams that needed aid as well as bring their manufacturing sites back up to a working capacity that follows the country's virus guidelines for work while remaining safe. If a company followed the pandemic guidelines while maintaining their business, the smaller product teams would feel pressure due to the large amount of work with smaller teams, but normally will follow as the team would know how to work in this type of environment. On the other side of the coin, if the company did not find a way to remodel their industry, then the smaller teams would find there to be too much pressure for senior leadership without the ability to produce the products they develop due to lack of industrial support.
For upper level management, their positions will also be in jeopardy if they do not find a reasonable plan for their direct employees to work efficiently during hardships. They need to become a manager who can manage their employees morale during these times as well as make the hard decisions on employment of their staff and how much work each one needs to complete to ensure the company does well. Upper level management needed to make the decisions that would ultimately affect the business to save as much revenue as possible as well as keep the employees motivated to keep producing results.
I believe the biggest problem from situations like a pandemic would be unavoidable delays in the schedule. As previous comments pointed out, this will create delays in shipping/receiving deliveries due to more individuals working from home than normal conditions.
In addition, virtual communication will create further delays. Rather than walking up to someone and asking about a problem, you may need to email or call and wait for a response. These small delays will add up and create less efficient work abilities for all employees if they are continuously being held up in small matters that could have been resolved instantly in person.
Technically, I feel as if there should be back-up plans for emergency scenarios in order to prevent disruption. That being said, things like the ongoing pandemic and the impact of the ongoing pandemic are not always predictable. I think that a company and a management team can prep and prepare as much as possible, but there is only a certain degree of preparation that they can make for an event that they cannot entirely predict.
As others have stated in their responses, the most important thing to prepare for is the delay and disruption of company function. Its important to have a backup plan, both in smaller management and upper management positions, but there needs to be an existing expectation that loss will occur from, "extreme" circumstances. I.e loss of revenue, loss of jobs.
That is the exact expectation and reality of what we are seeing right now; things that are not, "priority" to a company or that can be cut have been cut. People have lost their jobs in order to reduce spending by the company and many company locations have been shut down.
Honestly, this whole pandemic is a catastrophe, and I cannot imagine circumstances in which the events that have occurred, such as loss of jobs and industry, would be preventable without breaking COVID regulations/risking loss of life (as we have also seen).