The operations leader’s role in recession-proofing manufacturing facilities

By Mark Triplett, COO | May 11, 2020

How to demonstrate resilience and innovative leadership during COVID-19

COVID-19 is impacting companies and industries across the globe, straining economies, societies, and supply chains. Manufacturers are hardly immune; more than 70 percent of industrial manufacturers fear negative financial impacts from COVID-19, according to a recent PwC poll.

The Chief Operations Officers, VPs of Operations, and Directors of Operations are bearing the brunt of the impact. The Operations team is responsible for transforming a product idea into a finished product, for managing the supply chain, for maintaining a safe and efficient workplace, and for ensuring quality standards are met. They are both a cost center and a revenue generator, and during this pandemic, I dare say they face some of the toughest challenges in the entire organization. Operations leaders are constantly faced with pressure to cut costs, but during a pandemic and potential global recession, this pressure intensifies as they are forced to cut costs and maintain output, even with disruptions in the supply chain and the workforce. As operations leaders, we must be resilient and innovative during this challenging time and do everything we can to keep the ship afloat during the storm. 

As the Chief Operating Officer at Stem, I oversee the design, engineering, and deployment of energy storage systems globally. I also manage supply chain, technical services, and real-time network operations of our entire fleet, along with running the facilities operations of our offices and warehousing facilities. COVID-19 has posed challenges unlike any I’ve seen in my 25+ year career in operations, but I aim to respond with resilience and innovation.

Based on what I’ve learned so far from this experience, here are 8 suggestions on how operations leaders can demonstrate resilience and innovation to help recession-proof their operation. 

  1. Stay engaged with customers. Understand how your customers’ needs are shifting.Increase your communications cadence with your customers during uncertain times to stay up-to-date with their changing needs and demand. Work quickly to make product and feature changes that are necessary to support their evolving situation.
  2. Shore up the supply chain.  Manage your supply chain closely and identify potential backup suppliers with regional diversity. Always have back up suppliers throughout your supply chain and ensure that all your suppliers have regional diversity.As we’ve seen with tariff wars as well as COVID-19, different parts of the world are impacted by supply chain disruptions at various times. Diversification is key in a dynamic and variable market, which seems to be the new norm in today’s global business environment.Increase your communications cadence with your suppliers during uncertain times to relay the changing needs of your company and your customers. Consistent communication with suppliers will help minimize the costs and impacts of change.
  3. Find low-effort ways to reduce opex quickly. Are there cost-cutting projects that you’ve considered but placed on the back burner? Now that every dollar matters, this is the time to revisit cost-cutting solutions that can be implemented quickly and start generating positive returns immediately. Consider strategic changes to operating costs as well by examining where costs are exceeding what’s necessary. One area for significant savings opportunities is energy use, which is typically a major driver of operating expenses at a manufacturing facility.Sign up for Stem’s webinar ‘How energy storage helps recession-proof your facility’ to learn more about how an energy storage solution can produce positive returns without a high upfront cost.
  4. Protect and engage your employees. Your employees are your most valuable resource. Your business would not run without them, so keep them safe and listen to their needs.Take the appropriate safety precautions to minimize the spread of the virus: provide personal protective equipment, make efforts to minimize direct personal interaction as much as possible, keep safe distance, and adhere to mandates and suggestions from your local and state authorities. Come up with creative solutions for keeping your work safe. Can you spread workstations at least six feet apart? Can you face people in opposite directions? Can you shift work schedules to reduce the number of people in a work area per shift? Can you automate?Keep your team engaged, giving employees opportunities to voice concerns and provide feedback about how the changes are going. Ask them for ideas and suggestions for improvement, ensuring they feel valued and heard.
  5. Cross train your employees. The more you cross train employees, the more resilient your operations will be. This will help ensure operations continue smoothly even if an employee gets sick, leaves the company, gets promoted, or gets transferred to another area. You never want to find yourself in a situation where you are reliant on a small number of individuals, especially during a time like this when there’s a heightened chance of the workforce being disrupted or of the company needing to scale up or down.Cross training is beneficial to the company and its employees, empowering employees to expand their knowledge and skill set. This supports employees’ professional growth and prepares them for promotions and new opportunities as they arise.
  6. Identify opportunities to increase efficiency. Focus on continuous process improvements, infrastructure and automotion. AI solutions can help your team operate remotely while increasing efficiency. They can help reduce waste, provide transparency, and manage a variety of processes remotely, from forecasting and managing logistics, to automating the visual quality control process, to optimizing energy costs. Leveraging AI for automation can free employees up from manual, in-person processes and give them time to cross train and up-level their skill set.Click here to download Stem’s whitepaper on AI for energy storage. 
  7. Strengthen digital capabilities. In a factory, it’s unavoidable that employees will have to continue performing essential functions in-person. But where possible, identify parts of your employees’ roles that can be performed remotely. Move meetings online, leveraging tools like Zoom, Skype, or Microsoft Teams. Evaluate and implement automation and remote monitoring capabilities. These technologies will help keep your team safe and will continue proving beneficial long after the threat of the virus recedes. Experts predict that remote work culture will continue to be the norm in the long-term, as employees have long been seeking the flexibility of being able to work from home at least part of the time.
  8. Continue demonstrating operational excellence. Despite the unprecedented challenges of running a manufacturing facility in today’s environment, it is now more important than ever to continue demonstrating operational excellence. Ensure quality standards remain high and align products and services with your customers’ needs. Measure customer satisfaction and incorporate their feedback. By maintaining operational excellence during this challenging time, you will impress executives, enhance customer loyalty, retain employees, and distinguish your company from competitors.