The Coronovirus outbreak and the worldwide reaction to the pandemic will force companies to radically rethink how they operate and embrace technological investment, said ABI Research.
“To effect change, there must be a stimulation of a magnitude that means companies cannot do anything but make bold decisions to survive. COVID-19 is that magnitude,” explains Stuart Carlaw, chief research officer at ABI Research.
Bold decisions and technological investments could lead to outcomes such as:
- A more concerted and widespread move to lights-out manufacturing
- Increased usage of autonomous materials handling and goods vehicles
- A more integrated, diverse, and coordinated supply chain
- Investment in smart cities to support community resilience
- A move to virtual workspaces and practices
“Before we feel this potential long-term impact, there will be some serious short-term implications. Contractions in consumer spending, disruptions to supply chains, and reduced availability of components will create a rough sea for all boats.
“In the short-term, there will be a retrenchment in outlooks a reduced investment in modernization, as survival instincts trump the drive to prosperity,” concluded Carlaw.
The biggest impact from COVID-19 is its restrictions on the movement and gathering of people to limit the spread of the disease. This, in turn, is restricting manufacturing activities where people drive many of the build and support processes. These restrictions are slowing the flow of both people and goods, thus affecting the supply chain that supports these flows.
So far there is no noticeable impact on IoT suppliers and their operations. And it is unclear if the coronavirus will drive the next hot new IoT application, such as disease sensor arrays or connected respirator masks.
However, there will be short-term and long-term implications for the IoT supply chain for which ABI Research offers three recommendations for consideration:
- Maintain and even increase communications with current IoT customers during this uncertain time and its impact on global trade. Beyond the internal communications happening as companies prepare for more work from home activities, strategic impacts of COVID-19 and how to prepare for the future are in the early stages of discussion. IoT suppliers should influence the outcomes!
- For IoT hardware suppliers, supply chain assessments have already been in motion due to the trade war. But now is a good time to reassess positions in various IoT markets, either for potential opportunities due to longer term planning by enterprises using the IoT or for potential pricing pressures if Chinese suppliers leap out of the pandemic with lower product pricing to maintain shipment volumes. It should be noted that software and services available with hardware sales should be given more attention to buffer against price competition.
- Automation and remote monitoring will be two areas that receive more attention in 2020 for IoT services as a result of COVID-19. Healthcare will be another market where technology will be top of mind to better protect against future health crises. IoT suppliers should put more emphasis on finding opportunities and developing services for these markets to capitalize on COVID-19 after affects.