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A survey of business leaders in the manufacturing sector found that 89% report business impacts from COVID-19, with a large portion of that impact coming from supply chain problems.

On-demand manufacturing company Fictiv published the results in its 2020 State of Manufacturing Report which, among other things, found that only 17% of those polled said their supply chain had been resilient in the past year.

“Supply chains are experiencing unprecedented shocks from the years in which trade and tariff headwinds drove roller coaster waves of supply and demand, and now we’ve thrown COVID-19 into the mix,” the report said.

Despite 99% of respondents saying that supply chain resilience is a top priority, the report concludes that “the industry hasn’t learned much” despite supply chain shocks that should have led to a greater focus on resilience prior to the pandemic.

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Aside from decreases in sales, which was reported by 44% of respondents, supply chain issues dominate the top COVID-19-related problems that manufacturing businesses reported facing. Cost of materials, lengthening production lead times, and delayed product launches were all reported by 41% of respondents.

For many businesses, those supply chain shortcomings are causing them to rethink offshoring parts of their supply chain: 84% said they will think twice about continuing to use overseas suppliers. Despite concerns, 74% say they still have confidence in the manufacturing abilities of China and other countries in the Asia-Pacific region and will continue to do business with them in the future.

COVID-19 manufacturing impacts haven’t been all bad

Despite the damage the pandemic has done to manufacturers, 97% of respondents said that COVID-19 has created new business opportunities, particularly pertaining to supply chain resilience and innovation.

“Respondents ranked supply chain resilience as the second most important opportunity driver. And we believe they are right on. Rather than looking at the cost of goods as a drag on margin, we should be drilling in on the cost of supply chain,” the report said.

For most businesses, Fictiv said, digital transformation will be the best way to address innovation and supply chain resilience opportunities in the wake of the pandemic.

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Digital manufacturing platforms, remote collaboration tools, research and development laboratories, and supply chain forecasting/visibility technology are cited in the report as the most heavily invested digital transformation efforts.

Digital transformation in manufacturing won’t only affect the companies, said Fictiv COO Jean Olivieri. “The opportunity for supply chain executives will be to introduce digital and AI capabilities through partners and investment that can build an agile, resilient supply chain able to flex across geographies and demand in real-time and with complete transparency,” he said.

“Companies that invest in digital manufacturing partnerships that make their supply chains dramatically more agile, predictable, and resilient will gain a significant competitive advantage in their markets,” the report concludes. With the state of manufacturing, like many other industries, being uncertain, every advantage can help as the business world moves into a new normal, Fictiv recommends.