The new normal with its changed terminologies upended the work model for the manufacturing space. How well equipped is this sector to cope with the shake-up?
Remote working and social distancing weren’t exactly a part of the common parlance before the virus outbreak descended all across the globe. That was then-a time which seems far off in the distance. Because now, in the new normal, these words practically dominate every conversation, discussion, meeting et al.
Not just that. They encompassed a complete overhaul of systems and functions that proved no less than daunting for a sector which contributes over 16% to India’s GDP-manufacturing.
With ‘work from home’ being alien and social distance in a manufacturing set up seeming unimaginable, the pandemic implied that an uphill journey was on the cards for this sector. And also for the economy.
Now, many months since the first lockdown was announced in the country, how well equipped have manufacturers really become in coping with these new (rude) realities? Have they been able to devise ways that keep the momentum going, while still adhering to all the protocols?
Rajeev Singh, Partner, Deloitte India says a lot of manufacturing entities have been able to discover innovative ways to cope with the current situation. “While the pandemic has a lot of negatives, one positive is that organisations realise that they can accomplish a lot of work with fewer people even in a manufacturing plant. For years, people thought virtual operations are possible only in corporate or sales offices. But that mindset is changing and people have identified a new operating model now,” he highlights.
The new order
In fact, nothing really will be the same anymore even for a sector like manufacturing which operated as per fixed schedules and a shift system at the helm. The mindset of being ‘physically present’ and punching in attendance as a daily log has seen a sea change. This works well for manufacturing units as more space is now freed up for production processes instead of support functions.
Singh says that by working in this manner, a lot of economic advantages accrue as overheads will expectedly reduce for these units. He also sees more talent coming to the fore, such as gig workers in support functions as the flexibility in the sector will act as a natural pull.
Incidentally, functions such as IT, finance, HR and procurement have been easier to move to remote working operations. And for those in production roles, technology is being used in a lucrative way to ensure social distancing and safety norms. “For example, there are wrist watches or bands which alert when people are near each other or when someone is approaching closer. Moreover, if someone is detected as Covid positive, they can do contact tracing,” he adds.
Singh’s views are reflected in the approach adopted by companies. Tata Steel, for instance, rolled out ‘Pod’, a system aimed at reducing the number of workers at a given time and place to counter the Covid risk. The idea was to divide the seating arrangement into small units or pods, thereby restricting inter-pod movement. Each pod has a maximum of 10 workers with skills that equip them to finish the task at hand within their own group. Besides this, a 30-minute air gap is maintained between two shifts to lessen the risk of contamination and enable easy contact tracing. Another practice is ‘Proximity Analysis’ in which alerts are sent out in case there are more than the requisite number of employees present in a small area.
Sameer Narang, Chief Economist & Head – Strategic Planning, Bank of Baroda says that the manufacturing sector globally and in India has changed its standard operating procedures (SOP) well enough. “There has been a shift in consumer behaviour – people are working from home, working out at home and eating at home. Thus consumers are buying electronic items and equipment, be it laptops, TVs and dishwashers to name a few which can enable them to seamlessly manage these activities efficiently. Manufacturing firms all over have responded well to this shift in consumer demand,” he states.
Industry experts say that changes are inevitable with the momentum gaining towards digital and technological advances in this space. A report by Deloitte India in June, ‘Industry 4.0: Smart operations – an imperative for the future of manufacturing,’ highlighted how technology adoption is expected to rise across manufacturing organisations. Because of the pandemic, it said, organisations may need to re-evaluate/re-prioritise their digital roadmap, and also consider working on those initiatives that can deliver great leap-forward benefits. “They could look towards leveraging Industry 4.0 solutions for redefining SOPs, redeploying manpower, multi-skilling resources, reconfiguring the workplace, and re-engineering business processes to create a safe work environment,” the report stated.
Ashwin Reddy, Managing Director at Aparna Enterprises, a construction and building material firm, offers a glimmer of hope. “By automating certain processes, rescheduling the work etc., the adverse impact would be gradually reduced in the future. Every company has learnt how to tackle the current pandemic situation in terms of protecting its employees, and minimising the impact on productivity. We feel things will come to normalcy by December this year,” he avers.
Not all, however, are as enthused. With fewer people at the plant and the rest of the functions still adjusting to the concept of work from home, this also meant that efficiency and productivity would come in question. “Regarding working dynamics, we feel it will take a few quarters for industries to optimise their working conditions and the situation to achieve normalcy. We are still recovering from the disruption caused because of the pandemic, but we do feel that we have pulled back well,” reveals Kishan Jain, Director at GoldmedalElectricals, a fast moving electrical goods (FMEG) company. The company, which had to limit the number of people working in each shift due to social distancing, says it could tide through due to the demand for electrical products continuing in this time.
Demand creation and revival
The subject of economic recovery, though, has been linked inextricably to demand creation and revival initiatives. Experts rationalise that it would be wrong to assume that manufacturing has met its goals in the short term only since demand is lower at this point. Citing the example of two wheelers and the tractor industry, which saw a higher demand compared to last year, Singh says that this gives the confidence that manufacturing will support the demand that bounces back.
Deep Lalvani, Chairperson at AdorMultiproducts, a personal care manufacturer, predicts that certain sectors are going to see huge growth in the future from the realm of wellness, healthcare, FMCG and packaged food. “We truly believe that manufacturing is going to bounce back and in a big way for sectors like personal care and hygiene,” he asserts.
More so, with services still taking time to pick up and consumption undergoing a visible shift, manufacturing activity is expected to rev up in the times to come. This, despite the restrictions at play. “The manufacturing sector has still responded well. It is the services sector which has been hit harder. Some segments of the service sector will come back only once the pandemic is over whereas the performance of manufacturing continues to see improvement even in September. It wouldn’t be incorrect to say that manufacturing has been a mitigating factor in this crisis,” sums up Narang.