The COVID-19 problems that will force manufacturing to innovate

Originally published in Forbes.

While manufacturing is a historically slow moving and conservative industry, COVID-19 has created new challenges that are requiring manufacturers to innovate at speeds they never have before. Supply chain disruptions, social distancing on high-touch assembly lines, limited ability to travel, and the need for oversight add significant complexity to today’s processes. For electronics manufacturing, if not handled quickly, these challenges could result in delayed launch schedules, lower financial returns, and quality issues in the field that could damage their brand reputation. Here’s what electronics manufacturers are grappling with today:

Problem #1: Supply chain disruptions

Widespread globalization means nearly every supply chain is impacted by COVID-19. Tariffs made supply chains longer as companies worked to “add transformations” outside of China to avoid added costs. Now those same manufacturers are exposed to a large surface area: as various regions open and close, potentially multiple times over the next 24 months, manufacturers are going to be playing whack-a-mole with component shortages. Smaller companies and specialized products are the most vulnerable: they often have single-sourced components they rely on. Larger electronics companies like Apple and Samsung, who are able to invest in parallel supply chains, are less likely to be dramatically impacted. Alleviating shortages and taking uncertainty out of the equation means building new supplier relationships or calling up old ones, often with significant price increases. In my work with electronics companies, we’re seeing smaller companies look at supply chain parallelization for the first time. Larger ones are carefully distributing their product lines to different regions with the theory that if one country is down at any given point, the company can still produce some of their products for customers.

Once new suppliers are secured, manufacturers need to be able to get those parts, and the eventual units they will become, to factories and channel partners. With many commercial fleets grounded, freight capacity has drastically decreased. The addition of new government prioritizations and regulations create additional disruptions. Between solving shortages and freight issues, supply chain leaders have their hands full.

Problem #2: Manufacturing in a safe environment

A large percentage of electronics products are assembled by hand – and those human operators are typically spaced at 0.6 meter intervals. Increasing the interval to one or two meters, as specified by the WHO and the CDC, increases assembly line length and the cost for manufacturing a product. Outfitting factory workers in appropriate PPE will also increase costs and potentially reduce finger dexterity required to assemble small components, slowing lines down. While automation may seem like the natural solution, fast product cycles that ramp up and down in a matter of weeks remain an obstacle.

Problem #3: Limited movement of people

Factory and supplier partners are often thousands of miles away from where electronics products are designed, making travel essential part of development and production of new products. Building and maintaining relationships with suppliers, solving complex engineering problems, and understanding the visceral challenges of why something is difficult to assemble all rely on in-person interactions – with people and prototype hardware. Restricted movement of people around the globe is expected to last for 18-24 months – necessitating a new way to develop products remotely.

Problem #4: Limited remote oversight

To achieve mature products and processes quickly (and thus reduce economic waste) companies send mechanical and manufacturing engineers to factories during development builds. They walk the line to find and fix as many issues as possible during a series of builds, gradually improving the maturity of the product in time for production. They run experiments and make specifications about specific processes like glue or grease application, and measure improvements in real-time with their factory partners. With no travel, this oversight of what the issues are and the risks to the program leaves a gap.

While daily reports from the factory can help to provide context, misaligned incentives lead to mistrust and human aggregation into spreadsheets lead to errors. The data is pulled at a specific moment in time, but in early production, it’s actually the trends that matter most. Issues tracked in spreadsheets lack critical context – in the physical world, parts that are near each other can influence each other, so it matters whether the issue occurs near the battery or near the speaker. Engineers can piece it back together, but the extra effort required to do so means that correlating failures may be missed until the issue is more expensive to fix. As a substitute, companies are searching for ways to get eyes on their line and extract factory data – but the task is difficult without the right technology. Without oversight, which under COVID-19 translates to “without trustworthy real-time, aggregated data”, companies developing products tell us they feel like they are building in the dark.

Prioritization pitfalls

With a laundry list of problems, limited team resources, and a radically different working environment, many have taken the approach of tackling problems one by one from Maslow’s pyramid of needs. First, get the factory open. Second, get parts and whatever safety requirements there are for operators, third, run the line – but this approach is too slow. In some cases, choosing not to respond quickly is choosing not to respond at all. To avoid this, large companies must empower their individual development and manufacturing teams to act with urgency and without bureaucracy. Clear alignment to a mission enables teams to take ownership and act urgently, such as the ventilator refurbishment effort undertaken by Bloom Energy. The faster solutions are put into place, the smaller the disruption to business overall. Leaders who want to reduce bottlenecks for adoption in their organizations should look to expedite the decision making process and streamline procurement, legal, and security review processes.

The problems surfaced by COVID-19 will not go away overnight. As the manufacturing industry rises to the occasion, we’re going to witness the fast adoption of innovative technologies at scale because there was no other choice. We will see five years of innovation happen in the next 18 months – necessity is truly the mother of invention.