Bridging the capacity gap requires efficient decision-making, best achieved through a systematic prioritization framework that engages the most relevant manufacturers.
Using surgical masks and the N95 respirator as an example, here are three universal steps to help quickly identify the best-fit manufacturing segments for repurposing and generating additional production capacity.
Analyze the production characteristics of each vital product and match against relevant industries.
Assess the capacity projection for current business with relevant industries
Prioritize.
Here’s a list of manufacturer groups with key production elements and existing manufacturing processes with the necessary criteria for repurposing (see figure 1).
Note that not all sub-segments of the above-listed manufacturing segments are relevant to the product type. For example, motor vehicles and components manufacturing covers a large variety of production facilities. Instead, focus on the sub-segments that are most relevant, such as sound insulation manufacturers who share the same non-woven raw materials and similar production processes with respirator mask manufacturing. Motor vehicle OEMs possessing large and flexible production footprints and deep automation engineering expertise and highly qualified labor should also be considered (see figure 2).
Like any other business, manufacturers are also subject to disruption due to capacity shifts during the COVID-19 outbreak (see figure 3). While this should be taken into account, it may be overcome through the intervention and support of governments.
Prioritize manufacturing industries according to the ease of repurposing and capacity projection assessments dimensions. Figure 4 shows an example for surgical masks and N95 respirators.
Each manufacturing industry and relevant sub-segments are then prioritized by quadrant:
Priority for repurposing Start with the manufacturers offering the largest capacity potential. Then prioritize according to the potential for cross-industry collaboration and government functions, to ensure an effective and agile ramp-up of capacity.
Selective repurposing Repurpose production assets where appropriate or team up with other industry segments by providing particular production elements to better utilize redundant capacity and reduce loss.
Maintaining current production For manufacturers where asset repurposing is too costly and time-consuming, and demand for current business is surging too, then maintain current production.
Expand capacity in select segments Expand capacity in selected sub-segments to tackle a) existing capacity challenge with daily supply of similar vital medical and hygiene products and b) asset repurposing for life-critical medical devices such as respirators and ventilators.
Companies whose capacity is already stretched due to the crisis (like incontinence products) are finding it difficult to repurpose their production assets (to, for example, respirators) because their energy and focus is on engaging resources in making and supplying products within their core product segment. Short-term measures like operational excellence levers, debottlenecking, or focusing on runner products can only add so much volume, and larger-capacity investments would take too long to make an impact in the current situation. Therefore rapid, innovative solutions are needed and industries that see their capacities underutilized are in the pole position to help fill the gap—not only to keep their plants running but also for the greater good.” – Commercialization vice president, medical devices
Identifying the most relevant manufacturing segments is just the starting point of an effective capacity expansion through asset repurposing. Implementing a successful and swift repurposing program demands carefully engineered processes, multidisciplinary teams, and determined leadership.
Copyright: Kearney