Why Manufacturing Might Be Critical to America’s COVID Recovery

2020 has been a tough year for business owners around the country. Not only have they had to worry about the health of their family, friends, and employees, but the economic impact of the ongoing pandemic is threatening to make life harder. As the saying goes, “every dark cloud has a silver lining.” In the case of the COVID pandemic, the silver lining might be the opportunity for a resurgence in American manufacturing. Especially advanced manufacturing need to make robots that can help in hazardous situations.

While the news is full of stories about businesses closing for good, however, the ongoing public health and economic situation have shed new light on the pitfalls of modern supply chains that stretch around the world.

This is the case in critical industries, such as the manufacturing of medical supplies and personal protective equipment. But it is also the case of industries which might be deemed to be essential to the security of the nation.

Yes, trade has ushered in an era of global prosperity, but it has come at a cost millions of Americans have fallen behind. As such, many observers are beginning to think that manufacturing might be a critical element in America’s COVID recovery.

Since the late-1970s, many communities across the nation have seen an exodus of manufacturers. Yes, automation has massively reshaped manufacturing to the point where factories do not need the same number of people to keep up with demand. But another part of the story is the companies moving the remaining jobs overseas.

While the result was lower costs, it came at a price as many companies lost the ability to build their product and thus were at the mercy of their suppliers.  When times were good, it did not matter as everyone was making money. But with the supply disruptions brought about by the pandemic companies large and small are rethinking how they approach their supply chains.

One example is Mount Sopris Instruments, founded in Boulder, Colorado. The company makes scientific equipment for the mining, environment, and energy industries. While pressures to offshore manufacturing have existed for years, the owners have doubled down on their commitment to “Made in America” by expanding their manufacturing facility in the Centennial State.

However, some industries have not had a choice in recent years. According to the founder of clothing brand Tibi, Amy Smilovic, she could not believe the lack of high-end manufacturing capability in the U.S. when starting.

In a recent interview, Ms. Smilovic stated, “when I started in Hong Kong some years ago, my factory looked like IBM’s headquarters. It was clean, it was modern, every floor had a different stage of the production process, and it all looked amazing. I could not believe it when I moved back to New York and looked at manufacturing here. There is no high-end manufacturing here like there is in China or Italy or Turkey. Some places can do it well, but you can count them on the one hand. In Italy, it’s an entire section of the phonebook.”

But this is starting to change as there is a growing chorus to bring vital elements of garment manufacturing home. The reason is simple, as disruptions and export controls overseas have made it difficult for healthcare professionals to gain access to the PPE; they need to keep caregivers safe.

As such, many entrepreneurs have been retooling their production lines to make masks, gowns, and other protective supplies. Meanwhile, researchers and industrial groups are making investments in facilities that can produce the raw material needed in production.

It is this shortage of material that has led to confusion for public health officials during the pandemic. This has primarily been driven by demand surges, which have made it impossible for hospitals source equipment while leaving the public unprotected.

Even if companies are not moving their manufacturing back to the U.S., many are questioning their reliance on single-source or single country manufacturing. While this shift will do little to help during the current crisis, it will position companies to be more resilient in the future.

Beyond reducing risk, companies are also waking up to the fact that bringing manufacturing sites closer to the point of sale will help to cut costs, including logistics costs, waste, and inventory holding costs.

However, the move to bring manufacturing back may not necessarily be a win for American workers as stagnating wages, and increased automation will have a massive impact on the quality and quantity of jobs created.

While the COVID crisis is gripping the U.S., there is hope that manufacturing might be critical to America’s recovery.