How to build agile industries amidst a pandemic
Cultivating adaptability is essential to surviving the effects of a crisis as we plan for a rebound beyond the shocks arising from COVID-19.
The current pandemic has continued to disrupt various sectors of the economy, including tourism, hospitality and manufacturing. These disruptions have caused severe consequences for businesses and the communities in which they operate.
The World Bank estimates that shocks caused by COVID-19 are expected to further reduce Kenya’s growth prospects in 2020, with the largest impact being felt by the services sector (transport, retail trade, tourism, events, leisure), industry (manufacturing and construction), and agriculture.
Since the outbreak of the virus, some companies have been forced to operate below capacity, with some even having to shut down (KAM, KPMG Survey on the Impact of COVID-19 on Manufacturing in Kenya). The demand for essential goods has gone up, with consumers shifting their focus to online purchases over in-person shopping for goods.
As the effects of coronavirus continue to be felt, companies are asking what short-term actions they need to take to ensure business continuity and protect their employees.
Whereas the current pandemic has raised questions on the level of resilience of our local value chains and the approach to manufacturing, facing up to these disruptions and shifts will require new forms of collaboration across industries. This is to ensure business continuity while protecting employees and improving the resilience of our supply systems for the future.
Local industries will need to begin to strategize and implement immediate actions to ensure business continuity and ensure the safety of their employees at the workplace, focusing on strategic initiatives to accelerate preparations for recovery and increasing their resilience.
Kenyan manufacturers need to rapidly tailor their production and supply systems to meet the ever-changing needs of the consumer. Besides manufacturers, the COVID-19 crisis has also forced consumers to change their habits and preferences through the adoption of digital channels, and cash-free transactions, among others.
Given that habits such as online and eco-friendly shopping are already influencing global value chains, it is highly likely that the manufacturing and supply system will need to increasingly be able to swiftly adapt to changing consumer behaviours. Increasing demand-sensing capabilities by deepening sources and utilization of demand data and leveraging digital technologies to more closely integrate customers into the manufacturing process will be crucial.
Secondly, we must ensure logistics coordination across and within global value chains. During the crisis, capacity limitations were sometimes attributed to the shortage of raw materials and intermediate products. Logistics coordination across and within global value chains will be driven by new technologies that enable unprecedented levels of visibility.
Thirdly, manufacturers must implement agile manufacturing and supply system set-ups enabled by advanced technologies. Companies that were able to respond quickly due to a flexible and agile set-up had a clear advantage in adapting to measures put in place to curb the spread of the virus, which caused manufacturers to reduce their workforce. Other technologies associated with the Fourth Industrial Revolution, such as automation and advanced robotics, increase flexibility within production lines and simplify the process of switching products across manufacturing locations.
Finally, shared responsibility and collaboration among companies and authorities to address social and environmental challenges is also a key step towards ensuring the resilience and sustainability of industry. Collaboration has often proven fruitful and accelerated progress in certain areas, for example, the introduction of digital processes by regulatory agencies, which has hastened the provision of services by the government.
Kenya Association of Manufacturers (KAM) continues to foster collaboration with partners and stakeholders to ensure the above imperatives translate to specific actions tailored to the needs of each industry sector. This will ensure that industry is resilient in the presence or absence of a pandemic and cushion our economy from shocks arising out of calamities.
The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Kenya Chapter Board Chair. She can be reached at email@example.com.