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More Manufacturers Experiencing Changes to Orders and Supply Chains due to COVID-19

During the week of April 6th, more manufacturers experienced changes to standing orders, business practices, lead times, supplier access and materials/parts availability. However, the percent of manufacturers making adjustments to their business, as a result, was generally unchanged.

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During the week of April 6th, Gardner Intelligence conducted a survey to gauge the effects of COVID-19 on discrete parts manufacturers across all the industries that Gardner Business Media covers. The survey focuses on two basic questions:

  1. What changes has your business experienced as a result of COVID-19?
  2. What adjustments has your business made as a result of COVID-19?

For each of those questions, respondents were asked to compare the current state of their business to the norm prior to COVID-19 and rank the severity of the change or adjustment from minimal to moderate to major. You can go here to view all of the data for last week’s survey.

Last week, the most significant change experienced by manufacturers was to standing orders that were postponed or canceled. This change was experienced by 51% of manufacturers. A related change to business practices in payment terms, purchase orders, etc. was experienced by 38% of companies. Both options were asked for the first time in the most recent survey.

While the March 30th survey indicated that manufacturers might be adjusting to the normal, the April 6th survey showed notable increases in the four changes related to the supply chain. More than 45% of manufacturers have experienced changes to supplier lead times and supplier accessibility/responsiveness. And, changes to materials and parts availability were experienced by significantly more manufacturers. It seems the closing of non-essential businesses and most of the world’s major economies in some form of shut down was still rippling through the manufacturing community.

Even though the percent of manufacturers experiencing ripple effects was unchanged, nearly 50% of manufacturers said these ripple effects had a major impact on their business. This was up significantly from the previous week’s survey. Also, the changes to materials and part availability had more of a major impact on manufacturers during the week of April 6th.

Regarding adjustments made by manufacturers, travel was adjusted by 58% of companies. While it was still the number one adjustment, the percent of companies adjusting travel was down notably. While the respondents are different companies each week, the magnitude and direction of the change seems significant and could indicate that portions of the country are feeling more comfortable with some type of travel. Also, 40% of manufacturers adjusted contingency/backup plans, which was down from 54% the week prior. Fewer manufacturers adjusted hiring/recruiting practices the week of April. The percent of manufacturers making the other adjustments surveyed was relatively unchanged.

Adjustments to travel and budgets/spending had more of a major impact on manufacturers during the week of April 6th. The most substantial change in impact was hiring/recruiting. Nearly 75% of manufacturers said this adjustment was having a major impact compared with 56% the week prior

A slightly higher percentage of manufacturers were open normal hours in this week’s survey. This increase came from a combination of fewer manufacturers on reduced hours and slightly more manufacturers that were closed. Also, there was a small increase in the percent of manufacturers using its normal level of staffing.

Regarding the medical industry, the percent of manufacturers that had been serving the medical industry and increased that service was 15%, up from 10% the week before. This was the second week in a row that this increased. Also, there was a very small increase in the percent of manufacturers that began serving the medical industry due to COVID-19. 

Gardner Business Media - Strategic Business Solutions