The COVID-19 outbreak poses unprecedented challenges to businesses, governments, and societies around the world. Companies are reacting in different ways to ensure business continuity, improve the resilience of their supply chain, or pivot to innovative ways to generate revenue.
A key challenge in the current crisis is the demand peak for basic consumables such as respirator masks, gowns, visors, and swabs. A Kearney analysis estimates a demand surge of about 1600 percent for masks even in a suppressed disease progression scenario.
One measure that can be observed across industries and countries is companies repurposing their production and R&D capabilities to support the fight against COVID-19. For example, luxury brands like LVMH (Louis Vuitton, Monet, Hennessey) are switching production lines from producing perfume to making hand sanitizer; industrial companies are making hygienic masks, luxury hotels are becoming quarantine centers, distilleries are creating disinfecting alcohol, and automotive companies are evaluating options to producing urgently needed medical devices such as ventilators.
Motivation behind repurposing
In the pandemic created by COVID-19, one of the key priorities for most companies is to protect their own workforce while keeping operations running as long as possible. In many cases (especially for companies in manufacturing) these two objectives require workers to protect themselves – for example, by wearing masks and increasing their use of disinfectants.
In China, the government only allowed companies to re-open manufacturing if, among other measures, enough face masks for employees were available. This led to a surge in demand for such products – demand exceeded supply and companies such as Foxconn (electronics manufacturer) started to produce face masks themselves with the clear incentive to get production up and running again. Companies like Foxconn quickly built up production capacities for masks and disinfectants that exceeded their own demand, and they started to support frontline medics and others in their daily fight against COVID-19, at no cost.
Repurposing not only helps companies to protect their own workforce by keeping production lines up and running in times of low demand; it also helps serve the greater good and contribute to the fight against COVID-19.
Repurposing beyond manufacturing
There is potential for all industries that are currently facing tremendous demand disruption and connected idle resources to repurpose and develop innovative solutions. One example in this context is the hospitality industry, which already started to pivot from providing accommodations to tourists toward providing space for quarantine centers.
In another industry, retailers started to shift personnel away from physical stores towards supporting digital customer service channels. In Germany, McDonald’s employees are supporting retailer Aldi to cope with the customer rush.
The potential for repurposing beyond manufacturing is tremendous if we think about all the hard-hit areas at the moment, including airlines and restaurants. Extraordinary times call for extraordinary measures.
Written by Crystal S. Pavloski
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