It’s probably still too early to know what shape our post-pandemic recovery is going to take. The optimists are predicting a ‘V-shaped’ curve, others are hedging on a less-steep ‘U-shaped’ curve, and the pessimists are talking about a long and difficult ‘L-shaped’ recovery. Recently we heard from an analyst at Gartner who outlined what the post-COVID-19 manufacturing recovery is likely to look like. He explained that – no matter the shape of the national economic recovery – manufacturing is going to experience that recovery in four distinct phases. What’s more, the core to this recovery is going to be technology, including software.
From Reaction to Acceleration
To understand manufacturing’s four phase recovery, it’s helpful to think in terms of a simple matrix.
On one side you have customers and on the other side you have products, and for each you have either new (as in new customers and new products) or existing (as in new products and existing products).
Each quadrant in this matrix represents a different phase of the recovery.
The first phase is the upper left quadrant, what the analyst described as the React and Respond phase. In this part of the recovery the focus is on getting back up to speed with existing customers and the products that the manufacturer is already tooled to produce.
The second phase of the recovery is Redirect to New Realities where the existing products are expanded to new customers. This means manufacturers not only have their plants open and running but now have their business development and sales teams back in the office, too.
The third phase of the recovery is Rebound to the Future. Fueled by existing and new customers that have re-engaged and are generating revenues for the manufacturer, new products are rolled out to address the needs of customers. Product-market fit is assured, and the real rebound from COVID-19 is underway.
Finally, the fourth phase of the recovery is Accelerate Opportunities. The customer base for the new products is expanded again and new customers come on board as the manufacturer finds stability and a resilient, post-pandemic market position.
It’s important to note that these phases will not necessarily emerge quickly and smoothly, nor will each phase last the same length of time or be experienced in the same way by manufacturers in different industries. Two different auto manufacturers might pass quickly through phase one and two but find themselves mired in phase three, while a third auto manufacturer may take longer to get back on track but will quickly move forward to phase four.
The Role of Software and Enterprise Digital Twins
The analyst at Gartner was clear that technology in general, and software in particular, were going to be key to driving this recovery for the manufacturing sector – and we agree. In fact, having spoken to manufacturers in a variety of industries in recent weeks, it’s clear that software like that which we build at Cosmo Tech is being applied in both early and late phases of the recovery.
In the first phase, React and Respond, manufacturers are using our Enterprise Digital Twin simulation to get back up to speed, to optimize their existing operations, and start their recovery. Money is tight and so a fast return on investment is critical, and that’s where a digital twin that offers next-quarter value creation is so effective.
As some manufacturers start reaching out to new clients in their second phase, Redirect to New Realities stage of the recovery, we’re already seeing some early movers using digital twin simulation to lift production capacity and adapt their operations to produce more of their existing lines more efficiently. They are simulating to account for new and unexpected disruptions and operating environment. They are optimizing operations while serving a growing customer base, growing revenues while improving both profitability and cash flow.
While few manufacturers I’ve spoken to have entered phase three of their recovery, they are already starting to think about how software can help them Rebound to the Future. We’re getting questions about how digital twins can be scaled to simulate a production ramp-up for new product manufacturing. We’re also getting questions about how our Enterprise Digital Twins can help a manufacturer to manage the risk of expanding into a new product line while continuing to serve existing customers with existing products.
This long-term thinking about recovery also extends to the fourth phase, Accelerate Opportunities, where a handful of early adopters of our digital twin technologies are thinking about optimizing logistics operations and supply chains for the time when they are back at full production and growing their market footprint once again.
From Restart to Ramp Up and Beyond
As manufacturers move through the four phases of their post-COVID-19 recovery, software like Cosmo Tech’s Enterprise Digital Twins will be all important in getting things back on track, getting things moving, anticipating and adapting to future disruptions, and getting back to growth. As manufacturers find their forward, the simulations and optimizations that this software offers will drive productivity, improve efficiency, and ensure that companies adopt robust and resilient plans as they move towards 2021.