Image for illustration purposes

Impact of coronavirus on transformer industry

Article written by Chris Gerber, 25 March 2020

 

What are the best ways to deal with the virus and prevent disaster?

 

The transformer industry will not escape the impact of the corona virus. Infection statistics are through the roof. It is already acknowledged that this single virus and the resulting deadly infection will be the single largest challenge the world has faced since the advent of the Second World War. Policies to combat the virus, even in the largely homogeneous European Union, are divergent and differ from country to country. No one appears to be immune. The virus has been indiscriminate; not only has it impacted and infected the factory worker but also royalty, and heads of governments and states. The policies differ in the approach, ranging from total lock down, isolation and self-isolation, to aiming for herd immunity where 60 % of the population should have be infected first in order to achieve this objective. Economists all agree that the world may be heading for recession if the virus is not contained in the short run.

 

What are the best ways to deal with the virus and prevent disaster? No doubt there will be mainly different ways of approach. Here are some pointers:

 

* Setting priorities to manage the rapidly changing business landscape. Setting priorities to manage the crisis is imperative. It is not business as usual. The transformer industry is built on all the important foundation blocks: the ability to design, manufacture and deliver transformers within the desired specification and quality, within the right time frames, and the delivery at the correct location. Central in this is the relation of trust between the manufacturer and the customer base. This is a long-term relationship, cultivated over time and credibility. Setting priorities and managing the natural resources in the manufacturing process would be paramount to maintain this customer – supplier relationship in a time for crisis.

 

* Safety first may sound like a typical cliché but the current crisis will force management, trade unions and workers to unite around this principle so as to protect the labor force and ensure safe working conditions. It is important to note that this may differ from country to country. Within the EU, the disparity in approach to combatting the spreading of the virus is substantial. It may, therefore, challenge international companies with different manufacturing plants spread across the globe, where divergent policies may be introduced. An approach of best practices using the current legislation and exceeding this, may prove to be the solution.

 

* Ensure that the factory is classified or remains classified as an essential manufacturing industry. Management has the responsibility to both the investors and owners but also the society at large. It impliest the responsibility to earn a fair return on investment, and at the same time ensure employment, a safe working environment at market related wages. Keeping the factories in operation serves both these principle objectives. In some countries this may entail obtaining special permits not only to remain operational but also allow for staff to commute and travel to and from work.

 

* Shared and support services. Non-manufacturing. Consideration should be given to have all non-essential production and support staff to work from home. This may challenge the company in several ways. Children are now at home. Home office environment created over night may not prove to be the best environment to work in. This may not only imply having access to the same support and work-saving equipment but may also extend to having a tranquil environment. This may have a huge impact on the expectation and ability to work and meet the 9:00 -17:00 norm. Productivity, commitment, communication, and timelines, combined with the mental state and health of people working in isolation, should be carefully monitored. This will challenge supervisors and HR practitioners alike. Consideration should be given to creating a help line dealing with stress and other physiological issues. Particularly if this crisis prevails for a prolonged time. Ensuring the required IT software and hardware to support the work-from-home principle and approach, should be considered and implemented. Be mindful that working from home and using some of the modern social platforms to make phone call or video call may compromise the IT security and firewalls.

 

*Manufacturing. The global economy and modern supply chains have evolved to meet “the just-in-time principle” and requirements. The supply chain remains critical to the manufacturing process. Stock piling has become a thing of the past. Reviewing manufacturing slots, supply chain deliveries and production planning will be required. Ensuring sufficient flow and delivery of raw materials and supplies may become critical as these suppliers may be forced to close. In an industry where cash flows are linked to production milestones, it would be critical to review and agree on new manufacturing and timeslot priorities in order to ensure, safeguard and insure the improved cash flows. Consideration should be given to the reintroduction of more stringent health and working conditions. The reintroduction of comprehensive PPE including facemasks, body suits and gloves should be considered. Adhering to and enforcing the clean-conditions principle may require consultation with the trade unions and staff alike. All should share and commit to the same H&S objective. Safety first. Saving lives will have to become the principle to which there will be no compromise. It may be required to split labor force into shifts, with an interval between, in order to limit movement, contact and interaction. Allowing for sanitation and disinfection between shifts will become important.

 

* After sales and support services. Customer retention will become more important as production schedules may be impacted. The role of the after-sales and services staff will become increasingly important. It may require a certain refinement, and technical knowledge alone may no longer be sufficient. The ability to communicate, identify and satisfy customers’ needs will be required. The simple ability to know and phone the company switch board number will no longer prove to be sufficient to ensure customer satisfaction and supplier contact. It will entail a review and redefinition of old or new practices. In France, legislation has been introduced to limit work contact to certain working hours. The ability to travel across borders to deliver transformers, execute and complete installations, repairs and maintenance will be impacted. In an industry and environment that requires transformers to remain on-line and continuously operational, the need and use of regional suppliers to ensure maintenance and emergency repair may become the norm. Remote OEM service and repair support will require a different approach altogether.

 

* Sales and customer services. The customer is the reason why the transformer industry exists. Different companies may have different strategies and approaches. However, customer retention remains central in trying times. A fully function CRM program could proof instrumental in this period of crises where all communication, discussions, and agreements with key customers are logged for further reference and follow up. Informing and communicating with your customer base on order progress and delays, in an open and transparent manner, will be essential.