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By Zvi Feuer Senior VP, Manufacturing Solutions, Siemens Digital Industries Software in Israel.
When I think back through my career in manufacturing, and the many challenges along the way, I find nothing that compares to the global coronavirus pandemic. However, when I put the pandemic into the context of a standard economic cycle and just like other industries, the manufacturing industry goes through these deep cycles—I can find some insights into how to take advantage of the current time, and how we can find our way forward.
In an expansionary period, when business is strong, everyone is focused on external activities like taking care of customers, acquiring new business, and installing machines and equipment. There’s very little time spent on nurturing and optimizing the organization.
A slow period, such as what many manufacturers are experiencing currently, is the time to work on internal processes to strengthen the company in preparation for the next upswing.
In thinking about past downturns and how they might inform what we do now, I’ve been asking myself:
What I would have done differently during past crises, where I could have been more decisive, or alternatively, more patient.
Some of my suggestions include:
Lay the groundwork.
If you wait until the economy rebounds to develop and implement your strategy, you will be too late. Instead, start preparing prior to the low point of the business cycle.
Get your timing right.
There are companies that lead in the economic cycle – that is, they feel changes in their business environments before those changes hit the overall economy – while others lag. As CEO, you want your business to be at a low point before investing for the next growth cycle, so you can capitalize on any excess capacity.
Make talent a priority.
During a downturn of business, reducing staff is considered and may be unavoidable. However, the labor market is tight right now. Rather than reducing your staff, invest in employee retention and training so you’re set up for success when the economy improves.
Invest in technology.
Take advantage of cheap money with the longer term in mind. To improve your firm’s productivity, consider making investments in automation or robotics now so you can outperform your competitors later.
This is not just talk on my part. Siemens is doing this right now. As a concrete example, many skilled engineers at Siemens-Healthineers factories are deploying innovative software in the technology center for Power and Vacuum products, where in cooperation with the Institute for Factory Automation and Production Systems (FAPS) of the University of Erlangen-Nuremberg a true digital twin of the factory’s performance is developed. The technology lets the managers there navigate virtually through the facility with complete access to information from any IT system. Among other advantages, this will allow for better planning because there will be more data to base projections on, better data sharing across organizational barriers, and new knowledge about the products and processes there.
Siemens-Healthineers is but one example. I continue to be amazed by the innovative things the Siemens Software community has done in response to this global health crisis. I would like to express my heartfelt thank you to all the employees, customers and partners who are playing a role in the fight against this pandemic, especially those who are on the front lines.
First and foremost our priority is the health and well-being of our software community, including employees, customers, partners and their respective families. Beyond that, our focus remains on supporting our customers and, we are finding ways to enhance our processes, spending more time on training, and using technology far more than ever before.
While this is a time of crisis, it is also a time of transformation that can lead us to improve the ways we function. We must and will find our way forward. It is important to take the time to take care of yourself, your families, your company and your community, and to look ahead toward the possibilities that lie ahead so when we cross this bridge, you will not just have weathered the crisis, but be better positioned to thrive.