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Posted on 4/22/2020

Understanding COVID-19: Using Unique Cloud Data to Chart the Future of Manufacturing

Jerry Foster

The vast majority of manufacturers around the world, including those here in Michigan, are almost universally experiencing the impact of the spread of COVID-19 (coronavirus). This impact can vary from supply chain and order disruption to changing safety protocols and schedules to ensure employees can stay healthy while continuing to produce essential goods.

Regardless of manufacturers’ unique experiences, they share one common unknown: how to prepare for the long-term implications of COVID-19. With an unprecedented event of this magnitude, even companies with the most robust crisis and planning plans are grasping for models of what the future holds. Thankfully, due to different geographies experiencing the peak of coronavirus at different times, technologists that work with manufacturers and manufacturing information are now able to visualize and share how manufacturers are responding. We at Plex Systems are one of those companies.

Because Plex Systems solutions are cloud-based, we have access to 20 years of anonymized, compiled operational data from the approximately 700 manufacturers we serve. This group collectively runs 1,200 active production facilities in 29 countries, representing the aerospace, automotive, fabricated metals, food and beverage, industrial machinery, and plastics and rubber industries. For scale, in the fourth quarter of 2019 alone, this group collectively processed over 1.4 million shipments. Daily, they record upwards of 8 billion transactions (such as barcode scans, moved inventory, shipments, etc.).

Based on the activities within this specific data set, we can provide meaningful insight on the scope and impact of the pandemic as it applies to these manufacturers, and better contextualize the large-scale implications. And we’d like to share that with you.

Here are some of the latest findings, based on manufacturing production transactions:  

  • The U.S. will face a slower recovery than China. This is corroborated by broader economic data from IHS Markit indicating in March that “…fears surrounding the longevity of shutdowns and the slow recovery thereafter led to the lowest degree of confidence since data collection for the series began in July of 2012.” Data and insights from ISM also indicate strongly negative near-term growth.
  • U.S. food and beverage manufacturers are starting to see a decline in activity overall, but this isn’t necessarily a trend facing all companies. For instance, one of the private label bakeries that Plex supports was increasing activity over the last month before dropping significantly last week.  Yet another bakery that we support is expected to increase production of sweet crackers ten-fold from its April production a year ago.
  • Electronics manufacturers are experiencing a steep decline in activity, remaining in a near free-fall. While this is a relatively small data set, this could indicate a shift in buyer behavior. Data released by Earnest Research shows shopping for electronics and other goods are down, which could suggest manufacturers are starting to experience the implications of high unemployment rates, which are estimated to surpass those seen during the Great Recession.

The data shows a grim reality today, but this isn’t the full picture nor the end of the story. We are also seeing incredible stories of adaptability and innovation among manufacturers that are shifting operations and resources in the fight against COVID-19. This includes companies right here in Michigan such as Argent International, Creative Foam Corp. and Firstronic, just to name a few.

Plex is updating data and sharing the activities of leading manufacturers weekly. For the latest updates, visit the Plex COVID-19 Resource Center.

About the Author

Jerry Foster | Plex Systems

Jerry Foster is CTO of Plex Systems and leads the company’s technology strategy, along with research and design initiatives focused on next-generation cloud solutions for the manufacturing enterprise. Plex Systems delivers the first smart manufacturing platform that empowers the world’s leading innovators to make awesome products.

 
 

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