How to build agile industries in a pandemic
Cultivating adaptability is essential to surviving the effects of a crisis as we plan for a rebound beyond the shocks of Covid-19.
The pandemic has continued to disrupt various sectors of the economy, including tourism, hospitality and manufacturing.
The disruptions have caused severe consequences for businesses and 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 greatest 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 having to shut.
However, demand for essential goods has gone up, with consumers shifting their focus to online purchases over in-person shopping for goods.
As effects of coronavirus continue to be felt, companies are asking what short-term actions can be taken to ensure business continuity and protect their employees.
Whereas the pandemic has raised questions on the level of resilience of our local value chains and 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 resilience of our supply systems for the future.
Local industries will need to begin to lay down strategies and implement immediate actions to ensure business continuity and safety of their employees at the workplace, focusing on initiatives to accelerate preparations for recovery and building 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 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 adapt quickly to changing consumer behaviour.
Increasing demand-sensing capabilities by deepening sources and utilisation of demand data and leveraging digital technologies to closely integrate customers into the manufacturing process will be crucial.
Secondly, we must ensure logistics coordination across and within global value chains.
During this crisis, capacity limitations are 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 set-up had a clear advantage in adapting to measures put in place to curb 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 key in ensuring resilience and sustainability of industry.
Collaboration has often proven fruitful and accelerated progress in certain areas, such as 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. — The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Kenya Chapter Board Chair — [email protected]