Manufacturers are betting on industrial automation and digitisation in response to the coronavirus pandemic. Technology can help them mitigate the impact of future crises.
This is what both GlobalData and Interact Analysis expect. Research firm GlobalData states that many manufacturing companies were not in a good starting position when the corona virus emerged. Among other things, declining production put pressure on the sector. David Bicknell, analyst at GlobalData, expects the pandemic to cause more focus on industrial automation. "Afterwards, once the economy picks up, COVID-19 will at least accelerate investments in factory automation. However, that will take time."
Less dependent on people
Manufacturers who invested in robots in the past are now better placed to continue production during the corona crisis. Mainly because they are less dependent on human workers and operate more autonomously.
"Due to the impact of COVID-19, organisations are now focusing on need to automate faster in the medium term. Not least to fill gaps in productivity. Projects such as Industry 4.0, which encompasses both the digital and physical worlds, are helping address productivity continuity gaps globally," says Bicknell. He speaks of an urgent issue, made even more urgent by COVID-19.
In this context, Bicknell points to China, which has invested heavily in robots in recent years. The focus has been on collaborative robots, which are capable of working safely with humans. This investment is now helping Chinese companies mitigate the impact of the COVID-19 pandemic on its production.
Automation, digitisation and logistics
Interact Analysis reports that the pandemic is revealing problems and risks in the industry that have existed for some time. The research firm says the pandemic may force manufacturing companies to make improvements in automation, digitalisation and logistics processes.
"In many affected regions, the economy shrinks sharply in the short back, recovering once the epidemic is over. However, COVID-19 is unlikely to have a major long-term impact. Prevention and management measures by local governments are a critical factor here," Interactive Analysis writes.
Capacity planning and supplier chain
However, the research firm does state that the coronavirus may have a far-reaching impact on companies' capacity planning and supply chain. Multinationals in particular are expected to bet on improving their contingency plans and supplier chain management.
This is not surprising, as the impact of the coronavirus on global supply chains was significant in early stages of the outbreak. Interactive Analysis points to Apple, which relies on over 700 suppliers worldwide, half of which are based in China. The US tech company reported on 18 February to cut production by 10% due to the impact of the coronavirus. Another example is the automotive industry; data from UBS Group shows that China automotive parts account for about 27% of the global automotive industry's production. Some Japanese and South Korean car brands were forced to scale back or even stop producing models due to the impact of the virus.
Further information on GlobalData’s findings can be found in the report‘COVID-19 Impact on Industrial Automation – Thematic Research’. The analysis by Interact Analysis can be found here.
Author: Wouter Hoeffnagel
