4 minute read 6 Aug 2020
Female supervisor using digital tablet in steel factory

COVID-19: How to reimagine work for factories and distribution centers

By

Glenn Steinberg

EY Global Supply Chain and Operations Leader

Helping companies transform, create value and optimize business performance. Thirsty for knowledge. Ski enthusiast. Husband and father of two Michigan Wolverines.

Contributors
4 minute read 6 Aug 2020
Related topics Supply chain Consulting

As factories and distribution centers return to work, humans should be at the center of the strategy.

In brief
  • Every aspect of your business model needs to be rethought to ensure the safety of employees and prevent a new wave of the virus.
  • In supply chain, you can think about this in two phases: physical return to work and work reimagined.
  • Companies that focus on creating long-term value with humans at the center, technology at speed and innovation at scale will be successful in the new future.

There has been no handbook for the COVID-19 crisis, and there is no single solution for factories and distribution centers when returning to work. And for some, it’s not a return at all. Employees in sectors such as food distribution and medical supplies have spent the last few months working harder than ever, while braving the unknown and adapting continually to a stressful situation.

Social distancing, access, sanitation, local regulations and more — virtually every aspect of the business model needs to be rethought to ensure the safety of employees and prevent a new wave of the virus. This means executing health and safety plans and considering opportunities for what comes next.

Above all else, leaders must put humans at the center of any plans, and lead with empathy, humility and respect.

You can think about this for your supply chain in two phases: physical return to work and work reimagined.

Physical return to work: visibility, transparency, speed, accountability

During the pandemic, there has been increased scrutiny and pressure on certain industries’ factories and distribution centers to continue making and delivering food, medical supplies, cleaning supplies and other everyday items safely.

But for those that have not been operating at all, or only at partial strength, a physical return is not as simple as opening the company doors. Putting people front and center means first considering the safety, security and well-being of returning employees, whether they are plant floor supervisors, machine operators, warehouse workers or forklift and truck drivers.

EY Global Advanced Manufacturing Sector Leader Jerry Gootee says, “Production plants face unique hurdles, as working from home is not an option for workers on the factory floor. For them, social distancing can be difficult or even impossible to maintain.”

There will be new supply chain processes and new considerations; there is no more business as usual. Instead, businesses need to focus on seeing operations through a future-back lens (e.g., using tomorrow’s models to guide today’s actions) and building resilience into their operations as they do it.

Production plants face unique hurdles, as working from home is not an option for workers on the factory floor. For them, social distancing can be difficult or even impossible to maintain.
Jerry Gootee
EY Global Advanced Manufacturing Sector Leader

Four steps to physical return to work for factories and distribution centers

Here are four steps for business leaders to take to prepare for the physical return to work, each with its own questions and considerations:

  1. Understand and assess your business. Consider the following questions:
    • Who should come back and when?
    • Is remote work viable for some or all roles?
    • Is automation of some functions helpful?
    • How do we best focus on our employees’ physical and mental health?
  2. Create a command center to help you prepare for and recover from unforeseen events in the future. The command center will need to be staffed with people with the right skills. Its first order of business should be creating a factory or distribution center reopening the playbook for health, hygiene and operational continuity

  3. Implement technology to assist in improving safety. For example, use mobile check-in applications instead of having employees clock in and clock out. Invest in a labor management system to manage scheduling and determine workforce requirements by activity area. Wearables to help keep 6-foot social distancing protocols in place are in rapid development, but your best bet is to look for technology that’s mature and quick to deploy. The easier it is to use, the more likely employees will quickly adopt it.

  4. Prepare the physical space. Establish and communicate clear policies on workplace social distancing; meeting protocols; and health, hygiene and daily cleaning and disinfection requirements. Consider starting the day on a staggered schedule to prevent contact between too many employees while entering and exiting the facility.

    Factories will need to consider how to modify workspaces — for example, reconfiguring workstations to accommodate greater distance between workers.

    For distribution centers, it will be important to limit outside access to facilities, including drivers. Look for ways to minimize human interaction and avert bottlenecks at the gate and reception areas. Consider driver self-check-in, license plate scanning and other yard-management technology.

Transformation: realize the opportunities of work reimagined

Every sector is in a different place coming out of the crisis. For some, revenue is up but profitability is down, as they had to spend a lot to retool business and continue to operate safely. For other companies, demand has all but disappeared.

Businesses have been shaken out of their normal modes of operation, and leaders can use this opportunity to fundamentally re-examine and reimagine their businesses.

Rethinking consumer goods

Consumer package goods companies, for example, decreased the number of products they produced and focused on their most important products. This drove higher fill rates and better customer service levels for those products — and they reaped financial rewards. This begs the question: in the future, do consumers really require hundreds of slightly different versions of the same thing? For most companies, the answer is probably not.

Rescaling retail

Retail, on the other hand, is sitting on billions of dollars’ worth of inventory. The retail industry operates in 6-to-10-week “miniseasons” (e.g., back to school, prom, Halloween, beach vacation). The pandemic has caused a missed season or two, and now retailers need to order for the next season without clarity of what products they need, in which places and how much.

We also know that many products have moved online and won’t be coming back to brick-and-mortar stores, so is it time to reconsider the whole idea of seasons and seasonal pricing? Another question to ask: is your operating model profitable in a non-mall setting? Perhaps it’s time to consider niche brand acquisitions to help shift your operating model.

Innovating in life sciences

In life sciences, the pandemic disruption has led to innovation. Vacuum cleaner and car manufacturers have been making ventilators, distilleries have been making hand sanitizer, and everyone has been making hospital beds. While this has helped medical centers, it’s also driven the prices of medical items to new lows and has been a major disruption to companies that thought they owned those spaces. Medical device manufacturers now must innovate at scale — and quickly — if they are to survive.

Four ways to reimagine your business

Reimagining the future of your business is not an easy task. It requires imagination and deep introspection. Think about this:

  1. How to reframe your organization’s future
  2. How to use the changes you’re putting in place for the physical return to work to reimagine what your business could be
  3. Consider re-evaluating your real estate and physical footprint
  4. Take a step back and reconsider what you can outsource and what should be done in-house
Reimagining the future of your business is not an easy task. It requires imagination and deep introspection.
Glenn A. Steinberg
EY Global Supply Chain and Operations Leader

Companies that focus on creating long-term value with humans at the center, technology at speed and innovation at scale will be successful in the new future.

Summary

Navigating COVID-19, almost every aspect of your supply chain needs to be rethought, with humans at the center of your plans. Your efforts should consist of two phases: physical return to work and work reimagined to bring employees back to your factories and distribution centers safely.

About this article

By

Glenn Steinberg

EY Global Supply Chain and Operations Leader

Helping companies transform, create value and optimize business performance. Thirsty for knowledge. Ski enthusiast. Husband and father of two Michigan Wolverines.

Contributors
Related topics Supply chain Consulting