Lockdown: Business Plan

NEW DELHI: A couple of days later COVID-19 broke out, the Automotive Component Manufacturers Association of India (ACMA) delivered its 830 members a health advisory. Weeks later, ACMA is back to the drawing board, chalking up more guidelines to assist auto component manufacturers to deal with a post-lockdown world.

The scale of this COVID-19 disease has ballooned multifold in the previous two weeks with India registering over 9,000 cases and 300 deaths. Segregating the working channels on the store floor is now a must, so is fumigating the plant every couple of hours. The number of employees seated at a bus– those who ferry them from the cities to factories–must be restricted. Handling the changes, the lunch hours, and even the form of cutlery which may be utilized in the canteens now require a rethink.

A balance between deploying machines and people was in vogue, partially due to the high capital costs of automation and largely since cheap manpower is abundant. People installation on the shop floor needs to be significantly cut.

Even if one employee is found to be infected, a whole mill can be sealed. Component makers supply a lot of large vehicles, bicycles, and tractor manufacturers. Production for a lot of the business, therefore, can come to a standstill, overnight. Preventing the factories and the men and women who work there are important pillars in the business continuity strategy of each provider.

The BIG Plan
Nearly all businesses are in the center of what they describe as”scenario planning”. More automation is on the cards but that is a long-term aim. This writer spoke to ten organizations, from heavy engineering and white goods manufacturers to fast-moving consumer goods (FMCG) and property firms. Apart from drawing up social distancing norms, companies are right now focussed on fixing the supply-side. They’re strategizing around procuring raw materials, managing expenses, up-skilling their workforce, and getting back employees who might have migrated back to their villages.

Based on the industry, the firms said that demand could take anywhere between a quarter or longer to rekindle. They come from other states,” Sridhar V., group vice president, and manager of Honda Motorcycle and Scooter India Pvt Ltd said. From the time individuals who’ve gone back to their villages return, it might take 15-20 days. Many of them are skilled and can’t be replaced easily,” he added.

The issue of getting back employees could be worse for businesses like building, which are heavily determined by casual labor, Siddharth Jain, partner at management consulting company Kearney predicted. Fixing the supply chain, especially for non-essential goods, would not be easy either. Part of the packaging material for FMCG companies, for example, are imported.

In situations where the supplies are national, companies would want to micromanage their smaller suppliers. A financial health check on the providers could be required,” Jain added.

People First
Meanwhile, some industrialists have made a case for a more humanist approach in dealing with employees and suppliers. M.S. Unnikrishnan, managing director and CEO of engineering firm Thermax is among them. “People first, market second–this is what I believe in,” he told Mint when asked about the financial consequences of under-utilized factories, post the lockdown.

Component of the reason companies can’t bounce back fast enough is that providers –such as Jain indicated–might not be in fantastic shape. A few of the elements for Thermax’s heating, cooling, waste, and water management products, for example, are made by smaller businesses.e facing significant problems even before the lockdown due to economic difficulties.