The Covid-19 pandemic has taught several lessons to various economies of the World, with the most crucial of those being the importance of local manufacturing. There has been an over-dependence on both the goods made in other countries and also supply chains spanning across different geographic zones. This seriously affected the manufacturing sectors of numerous regions. It will now be appropriate to throw light on some of the salient points.
- Many governments have already started taking steps in the direction of strengthening the manufacturing sector of their zones. This will make sure that the economy will be able to effectively face any further contingencies in the future.
- Efforts have been initiated to substantially enhance the existing manufacturing capacity.
- Assembling is a highly significant part of manufacturing where many components are brought together and integrated to form a finished product. In this regard, the trend till now has been that a major part of these components has been imported. And, this gravely impeded the manufacturing process, in the post-COVID scenario. As a result, many economies are now implementing measures to ensure that a major chunk of the above elements is the ones manufactured in the local markets.
- Earlier, reduction of costs was the primary reason for any organization that was contemplating in lines of local manufacturing. But now, bringing about a rise in productivity has become the main motive.
- If an economy wants to make its manufacturing industry stronger, along with other policies, incorporating automation in the operations has to be encouraged. This will create employment for workers who possess the basic knowledge of things like artificial intelligence and robotics, too.
- The pandemic focused on the futility of the concept of segregation of processes related to manufacturing and research & development. We have seen that only those countries with a solid regional manufacturing base were able to quickly respond to critical situations resulting from COVID.
- An observation is made during the past few years. There have been quite a few developed countries where the manufacturing sectors worked in coordination with the local entities. Indigenously available resources are used, to a significant extent. In the given circumstances, even the developing economies are entailed to follow the same pattern. Only then will they be able to come out of the after-effects of the pandemic, as fast as possible.
- Economies around the globe have realized how much necessary it is to have domestic manufacturing units. This is more so with various medical and healthcare-related items. In the last few months, several countries had to undergo a lot of hardships just because they were heavily dependent on imports of medical supplies.
- Globalization, as we have been witnessing for the last two decades, is now set to undergo a big change. This is in the sense that, at least for medical and other emergency care products, economies are discarding a supply chain encompassing many zones. Here, a predominantly zonal supply chain is prioritized and strategies are getting devised accordingly.
In this context, manufacturers should give a helping hand to regional suppliers, so that they are enabled to move higher in the supply chain. Over time, this step would boost local manufacturing.