If you’re a New York manufacturer, chances are you’ve been flying by the seat of your pants for the past two years.
You may have had a disaster plan for fire or flood, but none with guide rails for the kind of business interruptions posed by the coronavirus pandemic.
“[A]lmost every single company that we interviewed that said they had a plan in place indicated that the plans that they had were not effective. … No companies were prepared for the pandemic — that’s no surprise; none of us were, really,” said Rosemary Coates, executive director of the Reshoring Institute, a California nonprofit that helps companies bring manufacturing back to the U.S.
“So they tried a lot of different things, but basically no one was prepared, and so the learn-as-you-go strategy was predominant,” she added.
Coates offered those observations in a webinar last month detailing results from a survey her group did of 50 New York manufacturers and their responses to the pandemic. Sponsored by the Center for Economic Growth in Albany, the goal was to take stock of pandemic effects and identify company best practices.
Coates said about half the companies interviewed said they had “some sort of” business-continuity plan to turn to, but the other half admitted to having none — “and that was a little surprising.”
But the pandemic was a wake-up call for all because its impact was so widespread: global supply chains disrupted; inventory decimated; labor impacted. Looking to the future, Coates said respondents saw value in having better preparedness plans that could be executed sooner; in sourcing more parts and materials within U.S. borders; in building inventory; and in finding ways to create more flexible work environments.
Sourcing U.S. suppliers, though, “is not a trivial task, by the way,” Coates noted. “It’s not like you just look someone up on the internet.”
Indeed, while companies may be interested in reshoring, they’re more apt to just build inventory instead, consultant McKinsey & Co. indicated in a recent paper, since the latter route is quicker and easier.
That sentiment showed in another New York manufacturer survey, also supported by the Center for Economic Growth, that the Siena College Research Institute conducted. Results were presented in a separate December webinar.
Don Levy, institute director, noted that while a high number of survey participants saw reshoring as enhancing supply chain predictability and its benefits outweighing higher labor costs, 55% reported no plans to initiate it. Just 40% said they wanted to learn more about reshoring.
Levy’s survey, which polled 332 manufacturers statewide, including 64 in the Capital Region, showed that virtually all of them felt some supply chain impact from the pandemic. They cited as their biggest challenges rising material costs, limited material availability, and transportation delays.
“Clearly … this has been a very, very devastating period of time for these manufacturers,” Levy stated.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]
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