Manufacturing Supply Chain: Do you hear the sound of “Workforce Recession”?

Workforce in Manufacturing Supply Chain

Workforce Recession is the term unheard of and yet is upon us. It is a new phenomenon that is causing a stir across industries and is laying the foundations for new norms.

Norms of yesterday will never be the norms of tomorrow! COVID-19 has changed the rules of doing business. The startling spike of business evolution, since the breakdown, brought upon us has been unprecedented. Standing up in the face of the pandemic situation is not easy as COVID has made industries go weak on their knees. Especially, the discrete manufacturing where the impact has been felt the most is being challenged with status-quo. With continuous innovation, the thrust of digital, robotics, connectivity, automation, and so on, the blue-collared human valuation has seldom been appreciated.

In the pre-COVID era, workforce (blue-collared ones) was taken for granted as a replaceable commodity. We almost started believing that Supply Chain can evolve into a human-independent process.

“We almost started believing that Supply Chain can evolve into a human-independent process”.

However, post-COVID, it is this thought which has been shattered and dusted to the ground. Migrant workers, which constitute a key portion of the skilled workforce, have moved out of their work cities causing a huge disruption to the well-established processes. Drivers, the second biggest community has almost brought the supply side to halt.

It may not be surprising to see that even after having achieved significant manufacturing automation, dependency on the workforce

is still deep-rooted. For instance, all logistics movements need commercial vehicle driving skills. We are still far from futuristic versions of autonomous trucks. Similarly, loading and unloading using a pallet truck is significantly workforce dependent. At the production site too, most of the touchpoints need workforce interventions.

Although, new emerging technologies under Industry 4.0 umbrella have propelled the digital information flow, yet digital information generated in factories is processed and again consumed by the same workforce, to achieve agility in operations. The workforce community is the biggest consumer of digital information.

“The workforce community is the biggest consumer of digital information”.

In logistics specifically, it was reported that 3.5 lakhs trucks had been stranded on the road and out of which many have been abandoned. Around 30,000 drivers and helpers abandoned the truck and left for their homes leaving property worth of lakhs at risk. To add, there are scenarios where trucks reaching destinations are faced with the challenge of the workforce unavailability to unload and hence stuck at the unloading yard, hoping that the workforce would be arranged, and the drivers would return to their homes.

Financial or Workforce Recession: What outweighs the other?

One of the biggest advantages we have had over other countries is the workforce.

Over the past two decades, we have been through financial challenges multiple times and at least know how to contain the spill. Even with the natural calamities, we have had some level of preparedness, knowledge, and experience to deal with the situation. However, what COVID-19 brought upon is unprecedented.

Manufacturing units were shut down, leading to job loss, which led to cash crunch, leading to non-payment of bills/rents eventually leading to vacating work locations. With almost no support from the employers, the outrage has led the workforce to eventually move out of work cities. The resentment is so high that denial, by the workforce, to come to jobs is also now getting accounted for the financial crisis. The plight of the workforce was invisible as was the virus.

“The plight of the workforce was invisible as was the virus!”

Other than organizations that have trade unions or have a more organized structure of management, most of the manufacturing tier-II and beyond is very informal. It is this informal sector which employs the highest number of workers and is facing the brunt too.

In virtual conversations with Joy Prakash Somani, Infosys Consulting, he mentioned, “This is the time when the CSR budget should have been promptly used towards the welfare of the workforce but the short-sightedness led to the disgruntled workforce leave the work locations and hence the catastrophic damage. The gaining of trust is the biggest battle, now, that has to be fought by the manufacturing sector to get their workforce back”.

According to the Union Home Ministry, there are over 21,000 relief camps set up across the country where more than 6.6 lakh destitute people and those stranded because of the COVID-19 lockdown are sheltered. Further, It has been reported that one-third of the migrant worker could be infected with COVID-19 putting infected workforce numbers at a higher side.

Challenge now is – what would drive this migrant workforce back to the job?

Somani discussed that to draw a strategy we could start by asking some key questions:

What steps could manufacturing organizations have taken to demonstrate empathy towards the workforce under COVID-19 scenarios?

• Do we need organizational forums like CII to come up with formal procedures, policies, guidelines to address informal sector employment needs?

• Would it be possible to declare actions and activities by organizations towards workforce welfare, under disaster/ pandemic, be classified as CSR?

• Should organizations working with MSME vendors, which provide a critical workforce, have processed MSME payments and dues rather than holding it?

Manufacturing industries are faced with a double whammy. Getting the migrant workforce back to the job would mean:

  • Using working capital to pay the wages – especially when there is low demand
  • Providing safe work environments in line with COVID-19 safety guidelines – need to invest capital to restructure manufacturing operations or plant layouts.

It is not as simple as it sounds. The biggest action they must take is about “corporate ownership” and provide “assurances”. The CSO (Corporate Social Ownership) in true form is an evolution from the current CSR as it imbibes bottom line ownership of the overall process. Large manufacturing organizations should lead by example and with the help of government MSME sector should equally endorse it.

COVID-19 has taught us that we are not only dealing with an invisible enemy but also have less empathy towards the workforce – the invisible people in the value chain. While the virus as an enemy could be fought with, the invisible people in the value chain must be taken care of while ensuring their safety and health. The workforce is a bloodline of every sector and their exodus is painful. Systems and machines are the enablers for the impeccable delivery of the process however, unequivocally, humans are foundational pillars of the Supply Chain process and are responsible for its functioning.

This article has been authored by Jagmeet Singh, CEO of Axestrack – a digital logistics platform managing 1,10,000+ vehicles.

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