Manufacturing Sector During Coronavirus

Ever since China witnessed an outbreak of an unknown virus in November, the world has not been the same. We’ve abruptly taken a step back and entered a constant state of fear and misery wondering to get our lives back to normal. 

As the world began to hibernate, the economy started to slow down. China, according to an analysis, may not be able to retain its position as the ‘world’s largest factory’ in the post Covid-19 global economic order due to the tremendous decline in their production  capabilities to supply raw material to their neighbouring countries.

Managing a manufacturing plant through a crisis like this is going to be a tough call as organisations are facing significant operational challenges. The global pandemic is disrupting both the demand behaviour and as well as the supply chains of companies by challenging their capabilities to deliver goods to the market.

In response to the government restrictions or falling demand, companies have temporarily shut their factories or curtailed operations until any further notice. In case of essential supplies, the frontline manufacturers have seen a significant increase in their demand but are still struggling to take their work to the relative safety of their homes. Experts are therefore looking for ways to operate through the immediate crisis while preparing for a potentially longer period of uncertainty of the end of the pandemic. 

It is a well-known fact that the 2020 recession is going to hit all the sectors and will heavily impose a financial burden. To examine the economic and operational impacts of COVID-19, the National Association of Manufacturers (NAM) surveyed almost 600 manufacturing leaders and concluded that:
- 78% of manufacturers are anticipating financial impact,

- 53% of manufacturers are anticipating a change in operations, and

- 36% of manufacturers are facing supply chain disruptions.

The suppliers, distributors, customers, and clients, are all going to be at a great risk during a time like this. Organisations, therefore are adopting several strategies that would not only benefit them, but also their internal and external public.

The application of Lean Six Sigma suggests to eliminate waste that do not add any value to the end product. These wastes do not just add extra cost, but also reduces the efficiency of an organisation to work as it consumes a lot of time. By eliminating the steps that are not required, the productivity of an organisation automatically increases. Lean Six Sigma is an improvement methodology that helps you to identify waste and eliminate them. It is a systematic approach to help employees realise their potential and make appropriate decisions. Lean Six Sigma provides a competitive advantage by streamlining processes which results in improved customer experience and increased loyalty. It also helps in developing more efficient process flows that drives higher bottom-line results.

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Lean Six Sigma Serving During Coronavirus

Understanding how lean six sigma can act as an advantage during a global pandemic.

We are facing one of the biggest global health threats in decades which has led governments around the world to pack up existence. With desperation lingering and the world in chaos, coronavirus calls for an uncertain future that nobody can predict. The global pandemic has forced people to shut down their daily lives and work from home. It has also left them wondering about the upcoming recession and their probability to survive it.

There is no doubt about how vulnerable the economy is right now. The impact of the coronavirus pandemic and the lockdown it triggered is clearly evident in financial markets. But the deeper impact that it is having across businesses and industrial sectors has still no clarity. 

The one question that has been trending all over the internet is how to be productive? The closings have delivered a crushing effect and has exhausted everyone. The competition to survive and thrive in the market is definitely going to increase. A time like this won’t ever come back. Instead of nagging about everything that is happening around the world, one must try to leverage this time for the benefit of their own good. 

A program like Lean Six Sigma, whose main focus is on customer satisfaction and cost reduction, provides prized analytics and enhances processing skills of an individual that can help them with leadership responsibilities. The American Society of Quality claims, “Lean Six Sigma is a fact-based, data-driven philosophy of improvement that values defect prevention over defect detection. It drives customer satisfaction and bottom-line results by reducing variation, waste, and cycle time, while promoting the use of work standardisation and flow, thereby creating a competitive advantage. It applies anywhere variation and waste exist, and every employee should be involved.”

The combination of the strategies of Lean and Six Sigma can help you and your organisation to obtain effective results by working efficiently. Learning new concepts and programs like LSS, that are of integral importance to the industry can put you at an edge over others. This is because of the versatility of the program. It can help you to reach your potential and make necessary decisions that would not only help in eliminating waste, improving quality of delivery, reducing cost but also in increasing productivity as a whole. 

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Coronavirus Affecting Businesses All Over

Throughout the course of history, disease outbreaks have ravaged human race. Day by day, and piece by piece, people have seen their lives taking turns that they never imagined. As human civilisation flourished over time, it also took a leap for infectious disease. 

This is not the first time that the world is going through a pandemic. The 1918 influenza pandemic, also called the Spanish Flu, was an unusually deadly pandemic that infected about a quarter of the world’s population at that time in a span of almost three years. It had a devastated impact on businesses all across Europe and the US.

It is said that the estimated overall loss to the US based businesses was in double digits percentage drop in comparison to others. The 2020 coronavirus pandemic is no different. With fear in minds of all and the world in disarray, Covid19 has created a ripple effect in the world’s economy.

It’s not easy to sustain a business during a pandemic that no one saw coming. Companies are grappling with the upheaval wrought by the Covid-19 pandemic. It has forced businesses to step back and practice social distancing for good. According to experts, companies all over the world are ready to see a giant slowdown in growth during this financial year. 

Times like these calls for adopting approaches that would help a business to survive this crisis. By keeping in mind that it is a tough time for all and not just one, being empathetic tops the list of what to do and what not to do. The outbreak is moving quickly and because of the dynamic nature of a pandemic, the challenges that organisations are facing also changes.

The work from home structure has already altered the format that a company works in. With all the sectors being shut, there is possibly no way to function like before. It is best to undertake approaches that would help to sustain the employees, clients and suppliers while navigating the financial and operational challenges. The consequences of the pandemic are yet to be fully disclosed but what’s confirmed is that companies are going to suffer financially. 

Circumstances like these asks for handling a situation with the best of methods like Lean Six Sigma that would allow a business to apply right kind of mindset and tactics to achieve its objectives. It would help to increase the efficiency and the productivity of a business by eliminating waste that do not add value to the product. 

By adopting Lean Six Sigma program, one can benefit with cost reduction and avoiding unnecessary overproduction that leads to excessive inventory. Strategising plans and executing them accordingly are always said to be effective as it not only eliminate variations but also increases the value of a business as a whole in all. 

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Coronavirus, IT sector and Lean Six Sigma

Understanding the impact of coronavirus on IT sector and how LSS can help during a pandemic.

India has become a visible hub for ‘digital skills and capabilities’ with around 75% of global digital talent present in the country. It is transforming into a digital economy with the industry being the largest employer within private sector. According to an article, liberalisation in India was possible only because of its IT industry. In early 1990’s, the industry started off with an export of around $100 million with only 5000 employees. With time, the industry thrived globally and now has exports of around $70 billion with 2.8 million employees all over. 

The IT industry is heavily influenced and dependent on factors like the global market and sustenance of its rate of growth. The sudden wake of coronavirus in China disrupted the global supply chains gradually and now when the outbreak has grown globally, the consequences have become far reaching and less predictable. The pandemic has impacted trade worldwide, and the growth for India’s IT services are going to be a huge challenge in the coming financial year. The fortunes of the Indian IT sector are most likely dependent on the economies of the western hemisphere. The US and European markets are both staggering due to the rise in number of cases and therefore, the businesses of most of the clients of the India IT sector are going down. The scare of virus forced the government to impose restrictions on movement of people which in turn impacted the ability organisations to deliver services of site. 

There is no doubt that during these tough times, digital tools are proving to be more vital than ever. Millions of people under lockdown are now turning into digital means to continue with their daily lives. In times like these, technology is the only solution that could act as a catalyst to magnify the revenues. 

Organisations have already identified virtual reality as a possible tool to not just boost up the uptake of technology but also to improve employee training in this season of work from home. Employee training would help to build up the morale of employees resulting in higher productivity of workers by imparting an additional skill set. 

Programs like Lean Six Sigma encourages employees to reach their potential by working towards the goals of an organisation and make a way for operational excellence. It is a combination of two popular continuous improvement methods- Lean and Six Sigma that helps in identifying waste and eliminating them as they do not add any value to the product. 

Lean Six Sigma is a strategy for improving employee engagement as they are considered as the most valuable resource in a company for identifying inefficient or unnecessary steps in their operations. Adopting LSS becomes a key to achieve maximum return on investment. Employees could realise the increased sense of their impact on a company’s profits and in return, would work efficiently.

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Cash Flow Management and Lean Six Sigma

Due to the sudden wake of Covid19, almost all the organisations are going to face an economic contraction in the coming future. The inadequate receivables during this pandemic are likely to impact the cash positions of the companies. 

Positive cash flow allows a company to operate, invest, and grow in a way to reach its potential. It is important to keep in check the net amount of cash receipts minus cash expenses by monitoring, analysing, and optimising them. Cash flow management helps in knowing when where and how your cash needs will occur. Also, it helps in being prepared for meeting the additional cash needs whenever required. The net amount of cash and cash equivalents being transferred from into and out of the business can be managed more efficiently by adopting various methodologies that not only improve your business tactics but also help you to renovate and carry out your business profitably. 

It is seen that companies that execute their operations using Lean Six Sigma have leveraged from the best problem-solving methods to help their organisations achieve their missions and satisfy their customer needs. 

Lean six sigma has shown to be the most predominant in use with indicating that it has actively helped in maximising the OTC processes of the companies. An improvement in the operations of management can result in permanent advancement of cash flow and a significant improve in the OTC processes associated with collections and corrections of accounts. In a competitive market space, customers are more likely to value corporate stewardship and attuned to quality expertise. In a survey, it is found that two-thirds of customers would prefer to build a relationship with the companies that contribute to the good of the society.

It is always beneficial to work with the help of various programs and models to increase the efficiency of your business and identify the loopholes before-hand. Organisations can achieve a dramatic increase in both quality and sustainability by adopting a single process methodology: Lean Six Sigma. 

The seven cash flow drivers- accounts payable, accounts receivable, revenue growth, gross margin, selling/general & administrative expense, capital expenditure and inventory can be controlled and managed in a way that doesn’t affect the cash position of an organisation in a heap. By investing and committing to the methodology, one can facilitate the following positive improvements: 

• Value for the customer
• Increased workforce productivity and morale
• More fluid strategic position
• Stronger competitive stance
• Standards driven achievement 
• Better Innovation
• Healthier bottom line

For KPMG Lean Six Sigma Training registrations

mail to in-fmsixsigma@kpmg.com or call at

+91 9555688555 or +91 9022033666.

Lean Six Sigma Black Belt Training Programme

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