by Freedonia Industry Studies
March 18, 2020
Manufacturers are seeing supply chain disruptions, changing demand patterns, and staffing crunches due to social distancing and illness.
As a result, some are using available capacity, materials, and skill to redirect. For instance, in the UK, the Department for Health and Social Care sent specifications for how to make ventilators to more than 60 manufacturers, including motor vehicle and aerospace firms such as Rolls-Royce, Airbus, Jaguar Land Rover, Honda, and Ford. Many of these firms had already reduced or curtailed their regular production operations due to reduced demand or challenges accessing key components.
Companies are being asked produce components or to make staff available to assist specialist firms, and to shift their own production capacity, if possible.
The challenge is that these vital pieces of equipment are complex machines that are produced under strict safety regulations. However, specialist manufacturers, engineers, and government agencies are working out a basic, functional version that is cheaper and easier to produce.
It typically takes 2-3 years for a ventilator to pass regulatory muster and be approved for use. However, specialists could work with auto manufacturers and others that have advanced manufacturing facilities to adapt their operations to suit current designs.
Manufacturing firms have long used joint ventures to adapt to changing conditions, improve technological capabilities, and expand production capacities. Companies will need to dive into such operations in more depth. Considering how current capabilities align with the needs of other businesses and how current needs in industry and health align with their operations would be the way to start.
For more information, see The Freedonia Group’s extensive catalog of off-the-shelf research. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.