Manufacturing Responds to COVID-19 Pandemic
“The very first priority for manufacturers is to make sure that our workers, their families and their communities are safe and healthy,” he said. “Once we can ensure that that occurs, obviously we’re going to continue to ramp up production.”
—Jay Timmons, president and CEO of the National Association of Manufacturers (NAM)
By now, we have all seen our inboxes flooded with emails from every company we’ve ever done business with telling us how they are dealing with the coronavirus. We’ve been guilty of it ourselves. But beyond handwashing and physical distancing, how are companies manufacturing products in the “new normal”?
The COVID-19 pandemic has sent a huge shock through the manufacturing sector from a supply chain standpoint as well as on the demand side. Whole industries have shut down.
But the need for some manufactured products has increased, particularly medical products necessary in the fight against the pandemic, and many manufacturers are retooling their lines to produce the products in demand. For example, Ford has announced that it will be manufacturing 50,000 ventilators within 100 days. General Motors has also teamed up with a Seattle-based medical device manufacturer to rapidly scale up production of ventilators. According to the two companies, GM will provide logistics, purchasing, and manufacturing expertise, and will manufacture ventilators at its Kokomo, Indiana, facility. GM will also manufacture surgical masks in its Warren, Michigan, facility.
The federal government awarded GM the contract to manufacture 30,000 ventilators by August at its Kokomo facility on April 8. On April 14th, GM announced that 600 ventilators were ready to ship, that half the order would be ready by the end of June, and that the full order would be ready as promised.
Automakers are not alone. AB InBev, maker of two out of every three beers in the world, is making hand sanitizer from surplus alcohol in its breweries around the world. Bauer Hockey, the Canadian hockey equipment manufacturer, is making face shields. The luxury goods conglomerate LVMH has converted production from its perfume plants to sanitizer production. Even Giorgio Armani converted all of its textile factories in Italy to the manufacture of single-use medical overalls. Prada is making face masks.
Perhaps the most astonishing thing about manufacturers’ responses to the COVID-19 crisis is the speed with which companies have adapted and retooled. The GM initiative came into being in only 48 hours, led by GM employees themselves.
But just exactly how do companies boost manufacturing production by a factor of two, or even five, or ten? The answer is not obvious, and demonstrates both the fragility and the robustness of our manufacturing sector.
Few companies operate at 50 percent capacity. Indeed, few could survive very long at such capacity rates. So how have companies ramped up output so quickly in response to the coronavirus pandemic?
An obvious first place to start is by reducing the number of SKUs and converting production lines to the manufacture of SKUs deemed essential. But beyond about 2X, other factors start to intrude. The physical plant (number of assembly lines or the square footage of the factory floor) quickly becomes a constraint. So too do upstream suppliers, who also maintain lean inventories.
The experience of the Seattle-based ventilator manufacturer is instructive. When faced with the task of rapidly scaling production output, Ventec found that their suppliers were not responding to their requests for increased upstream supply. Within half an hour of Ventec meeting with representatives from GM, GM’s suppliers in India visited Ventec’s Indian suppliers, and the bottleneck was resolved.
A similar story played out with GM’s domestic suppliers. Twin City Die Castings Company manufactures pistons for GM cars. With car part production sidelined, the company was casting about for ways to keep its workers employed. The company realized that while they may not know much about the manufacture of ventilators, they knew a lot about the manufacture of pistons and cylinders to extremely tight tolerances. As a result of intermediation on the part of General Motors, Twin Cities is supplying Ventec with pistons for ventilators, enabling Ventec to ramp up output by a factor of ten.
Here at Engineered Printing Solutions, we have long been a supplier of direct-to-object product-marking machines for the medical device industry, so it was only natural that when many of our existing customers began ramping up production that they would come to us. One such company did so just last week. So too have food processing and packaging companies.
EPS is proud to be part of the effort to beat this pandemic while still keeping its employees safe and employed. We are here for you, so drop us a line, and let’s start a conversation!