Kearney explores the repurposing of production to combat corona

A number of consumer goods manufacturers and other companies have begun to evolve their production lines in response to the coronavirus pandemic. The WEF in association with management consultancy Kearney have explored this shift and what is required to undertake the change.  

Consultants from strategy and management firm Kearney have in partnership with the World Economic Forum highlighted a number of companies from around the world which have repurposed their production lines to contribute to the battle against the coronavirus pandemic – delivering a win-win in many respects. While doing their bit to aid society, companies can also protect their own workforces, build their reputations, as well as perhaps stem some of the losses.

One such example is the world’s leading luxury brand LVMH (Moët Hennessy-Louis Vuitton) – which operates in an industry now facing a $120 billion black-hole, but has since the viral outbreak begun switching production lines from making perfume to producing sanitizer. Among other instances, industrial companies have been pushing out hygiene masks, distilleries are producing disinfecting alcohol, and quarantine centers have sprung up in luxury hotels overnight.

In addition to being good corporate citizens and keeping their staff employed, the move to repurpose also helps certain companies to keep their production lines up and running during a time of especially low demand. Yet, as noted by the experts from the WEF and Kearney (Strategic Operations senior partner Per Hong and associate Falk Weber), companies must of course overcome the varying levels of complexity involved in making these shifts.

“One question that always comes up when talking about repurposing is how easy or difficult it is for companies to actually repurpose – especially in manufacturing. To answer this question as it relates to coronavirus, it is crucial to understand that there are different levels of repurposing, with the time required to execute increasing from each one,” write Francisco Betti and Thierry Heinzmann of the WEF – the latter who is currently on secondment from Kearney.

In respect to addressing needs during the pandemic, the three levels of complexity in repurposing described by the authors are firstly the production of simple hygiene and protection products (like masks and disinfectants – with electronics company Foxconn an early example in making their own masks); the production of standard medical devices (such as standard ventilators); and then the production of more advanced medical devices, including complex ventilators.

As a rough guide, repurposing for products in the least complex category is estimated to take under a week to two weeks, with internal company and supplier collaboration required, moving through two to four weeks for the medium category with regulatory approval also likely involved. As to the most complex category, a shift may take up to two months and at least one, with the added need to collaborate across companies in addition to regulators and suppliers.  

The authors also note the tremendous potential for the concept of repurposing to move beyond the manufacturing sector, for example as has been seen with sections of the hotel and accommodation industry opening up its doors for quarantine needs. Elsewhere, retail entities have also started shifting personnel from bricks n’ mortar to digital customer support roles, and as the contributors conclude; “Extraordinary times call for extraordinary measures.”