Insight

Industrial Manufacturing: Tale of 3 cities

COVID-19 is driving oversupply in some areas of manufacturing and demand spikes in others.

Brian Heckler

Brian Heckler

National Sector Leader, Industrial Manufacturing, KPMG US

+1 312-665-2693

COVID-19 is a significant challenge for all manufacturers, but not in the same way. Some are figuring out how to continue in the face of cancelled orders and closed facilities. Others are urgently shifting operations to produce critical supplies. Others are dealing with skyrocketing demand, trying to rapidly mobilize at higher capacity. Brian Heckler, National Sector Leader for Industrial Manufacturing, discusses diverse industry impacts.

Video transcript

Hi, Brian Heckler, your Industrial Manufacturing Sector Leader here at KPMG.

I’m here to talk today about the current state of manufacturing. It’s a tale of three cities.

First, the companies whose orders have been cancelled, they can’t get to their customer’s sites,  they’re dealing with closed factories, laying off employees, and just simply trying to survive.

Second, you have manufacturers who are selling more of their product than they ever imagined, they’re struggling to keep up with demand, they have vitally important products that are important to the health and safety of the economy and our people, and they’re struggling with how to keep up in scale.

And then third, you have manufacturers who have been enlisted to build some of those critical products, the personal protective equipment and ventilators, and they’re trying to learn how to manufacture new products that they’ve never done before.

All three of these are struggling with how to forecast demand, how to orchestrate their supply chain and their manufacturing operations and how to manage their workforce.

There’s two things that everyone’s dealing with in the future. How to manage cash and liquidity and to meet the financing needs of their operations, whatever that turns out to be. And then, how to restart their operations and get to the new normal - how to deal with social distancing, remobilizing workforces and supply chains and deliver the products that the future demand will require.

All in all, it’s an extremely exciting time for manufacturing, and a very uncertain outlook.

 

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