Repurposing as a response to combat the COVID-19 pandemic – a case of an automobile component manufacturer

Abstract

The uncertainty of High Impact Low Frequency (HILF) events is a test of the resilience of mankind. The recent COVID-19 pandemic has agonized the systems worldwide shattering the health and economy. The automobile industry was among the major affected worldwide due to dependency on labour, network structure, and nature of operations. Yet, the industry could operate to cater to healthcare equipment demands using repurposing, an adaptation strategy. Given this, the present study quantifies the losses in production and Value Addition (VA) in the industry and investigates the effects of adaptation at a firm level. To compute the losses, a non-pandemic scenario was enacted using Seasonal Autoregressive Integrated Moving Average (SARIMA) to present the IIP and VA values in the absence of the pandemic. The VA Losses were computed as the difference between actual and forecasted measures. This was followed by a firm-level analysis of the effects of repurposing using a scalable Discrete Event Simulation (DES) model. Using two scenarios, an automobile component manufacturing press shop that handles 114 jobs using 28 machines was chosen to understand the benefits of repurposing raw materials to produce ventilators and oxygen support equipment. Results indicated a VA Loss of INR 198.46 billion during the initial phases of the pandemic from March to July 2020. Scenario 2, which contributed 5% of raw materials every month and repurposed after fulfilling demand, was effective. An additional 321 and 864 additional ventilators or oxygen concentrators were produced in Scenario 2 than in Scenario 1 over the 14 months. Firm-level implementation evidences the benefits of operationalizing the adaptation strategies. More insights for managers and policymaking have been discussed.