Cisco’s third installment for Navigating The Shift holds leaders from the Manufacturing Industry as they discuss challenges and strategies in response to the COVID-19 pandemic. Panelists include Greg Fisher (Microchip Philippines Country Manager, Board Member of the Semiconductor and Electronics Philippines, Inc.), Rhett Ramos (IT Director of Allegro Microsystem in Asia), Jonathan Mondero (Senior Director and Head of IT, Amkor Technology Philippines), Lito Estacio (Asurion IT Director) and Carlos Rojas (CISCO Global Industry Lead for Manufacturing).
COVID-19 is a major concern for those in the Manufacturing Industry, particularly because the model requires people working physically in the production line. Safety is a major factor in terms of adjusting to the new normal. At the start of the pandemic, most cities went into lockdown, causing further complications. With no means of public transportation, as well as stringent quarantine policies, getting workers from their home to the factory became challenging.
“The public seating capacity is only 50%. That’s the same for private shuttle buses that we employ to bring all of our employees into the factories. As a result, companies had this additional expense that nobody budgeted. Coming in to this year, (we) hired all these additional buses,” explains Fisher. “That’s one of the common denominators that we all face right now, this seeding capacity on public transportation.”
To add to this, the ongoing US-China Trade War affected manufacturers even before the pandemic. Caught in the middle, those in the industry had a hard time navigating the tumultuous political waters.
Surprisingly, China’s series of lockdowns worked to the benefit of local manufacturing businesses. As Chinese factories started closing because of the pandemic, orders started pouring in to keep the supply chain alive. And as the Philippines started to go on lockdown, this sector had help from the government in terms of logistics.
“It was good that not only did the manufacturers adjust, but the material suppliers as well as the logistic companies. They knew the challenges that were coming because of the lockdown. They adjusted well,” revealed Rhett Ramos. “The government was keen in making this not as disruptive as it should have. For example, the BIR, the customs, they didn’t require it to be as stringent as they normally do because of the pandemic. Now, currently, the challenges we’re facing because of those supply chain disruption are past.”
A major part of these adjustments is the digitization of manufacturers’ workforce. For companies in other industries, work-from-home setups are relatively simple. However, for manufacturing, a hybrid model was developed. People were still needed on the factory floor. This makes going digital more complicated.
“We have a hybrid model where many of our support staff are working from home. Our challenge is still in maintaining the safety of our employees. This is our number one priority. We are strictly following COVID-19 protocols (in the factory). I am ensuring that our IT infrastructure is stable and capable to support any new requirements. We continue to execute as well on our digital transformation initiatives, and I believe we are doing it well,” says Jonathan Mondero.
Sustaining a COVID-free workforce and maintaining productivity are major driving factors in the digitization of manufacturing companies. In factories, the goal is to limit physical contact to prevent the virus from spreading. RFIDs, online health assessments and cashless transactions are the norm. Support staff like HR and finance are provided PCs and peripherals. At Asurion, work-from-home employees are even given their own online market and groceries.
Although a lot of manufacturers show resilience in the face of the crisis, most are in agreement that it’s still a matter of ‘survival of the fittest’. The necessary digitization is only for companies who have infrastructure ready.
“Leaders have made made investments in those backbones and that infrastructure that’s robust for flexible manufacturing, whether you’re making a small batch of products or a new production run. It seems they’ve been able to manage their business within weeks or just a few months. But that’s not the case around the glob. There’s a lot coming out of this pandemic, there’s gonna be winners and losers. Those people who haven’t made those investments, who aren’t on the digital journey, they’re suffering right now because they’re struggling (to get the product out the door),” says Carlos Rojas of Cisco.
Digital transformation is for the survival of the manufacturing industry, particularly in automating the supply chain management and network systems. “Adapt and accelerate” is the motto for the future.
Watch episode 3 of Cisco’s Navigating The Shift entitled “Manufacturing in the New Normal: Beyond the Disruption” here: