coronavirus Archives - Zebulon Solutions

Manufacturing Amid COVID: US vs. China

I have spent the last fifteen years in manufacturing and supply chain, working on and off with companies in China. I’m used to expecting the week off for Labor Day in May and Golden Week in October. I know the time difference by heart. And every year I start planning ahead for Chinese New Year starting in September to ensure we aren’t short on parts or are scheduled to start a product launch when China is essentially closed for a month.

Despite my rigid preparedness, this year was different. Workers left for Chinese New Year but the factories didn’t reopen, and we were told repeatedly for our projects that there was no schedule for reopening. I couldn’t plan for this – no one could.

On one of my projects, the buyer spent their days scouring the planet looking for the specific battery needed in the assembly to keep the US production line going. On another project, we simply waited and waited for the factory to return just to confirm the manufacturability of the proposed design change on the display.

With an early Chinese New Year and Coronavirus sweeping through China, many of our Chinese partners have been out since mid-January. Only now, over three months later, factories are beginning to come back as reports of China’s cases of COVID-19 decrease. Yet, when Coronavirus came to US shores and we sheltered in place, many of our factories remained open.

Ford Motor Company converted its production line from cars to ventilators. Hunter Douglas stopped making blinds and used the raw materials to create face masks. Other factories likewise converted their production lines nearly overnight to begin our combat of the virus causing a global pandemic. Many other factories kept fulling orders to meet demand and, while there has been some drop off in orders, it wasn’t the complete shut down like we saw in China.

All of this made me curious to see how US manufacturing has fared during the COVID crisis in comparison to China. I pulled the US Bureau of Labor and Statics numbers for manufacturing and the slight loss of 18,000 jobs in March is well within a normal monthly variation. The employment numbers out of China are unclear, but practically, I know of well over 50,000 people who were out of work in the factories with whom I have contact.

In my efforts to find a comparable number between China and the United States, I think the Purchasing Managers’ Index (PMI) tells the story. China’s PMI historically hovers around 50, but for March it plummeted to a historic low of nearly 35. In comparison, the U.S. numbers have fluctuated between 47 and 53 in the last 12 months, so 49.1 in March is well within the standard variation, again pointing at a marked difference between US and Chinese manufacturing.

Going back to conversations I had with US manufacturers in 2012, I repeatedly heard how after a decade or more that several of their old customers had grown weary of dealing with China and had brought all of their business back. For nearly eight years, I’ve worked on a handful of projects that I thought were good candidates to move overseas, Asia specifically. Yet, when I’ve run the numbers, US manufacturing has frequently been very competitive, especially once freight and overhead costs are calculated.

With what happened this year with COVID, it has only bolstered my opinion that offshoring may not make the best business sense in every instance. While Chinese manufacturing still might make sense for some projects, the challenges of manufacturing overseas needs to be seriously considered. I’m wondering if it isn’t time to take a long hard look at US manufacturing before looking internationally for new products and emerging industries.

Testing in the age of Coronavirus

One year ago, I graduated with degrees in communications and writing. In high school, I reluctantly took a physics class and regularly got somewhere around 50% on the tests. The last time I stepped foot in a math class was in May of 2014.

Suffice to say, I don’t know everything that’s going on technology-wise at Zebulon Solutions.

As our marketing specialist, I do ask questions about different projects and try to understand exactly what we’re working on. For some of the bigger projects that I can see and conceptualize, I volunteer my help for menial tasks: I am great at taking apart exactly one model of an industrial printer and putting them back together again; I’m excellent at pressing buttons on an air compressor and recording the measurement results (Gauge R&R, as the engineers call it); and I’m a true pro at opening and closing test fixtures over and over again without ever seeing the results. In the time of Coronavirus, the latter is one of the few things I can still do as we wait for the state, country, and world to resume some sort of normal so we can restart more projects.

With lots of companies shut down completely, Zebulon Solutions is lucky to still have projects to work on remotely and be able to keep up some semblance of business as usual, just virtually. While my engineering, supply chain, and operations-inclined co-workers focus on the work they can continue on their projects, I am left in an empty lab with the familiar test fixtures. In the time of Coronavirus, we’ve worked out ways to test two times a week, instead of our usual four, while maintaining health and safety protocols, since testing is a solitary activity. Plus, if anyone else needs to come into the office a different day, we just get to work with our disinfecting wipes.

In an NDA-compliant nutshell, my job is to test something that should work kind of like a motion sensor, for some motions but not for others. I complete said tests by opening, closing, making noise at, and moving items in relation to the sensor. The data I record while doing so moves wirelessly to the cloud, where hordes of our customers’ engineers (or so I imagine) can remotely and safely analyze this data. Because it’s long term testing to collect and analyze a lot of data (we’ve been at this for years), I usually do a small set of these procedures every day and one of my coworkers manages the data collection for the customer.

Almost everyone in the office has been roped into this particular testing at some point or another, and everyone seems to have their own strategies to break up the monotony: podcasts, music, stretching and small workouts between testing, and multitasking with other work. I’ve tried all of these, but seven hours of testing a week makes most of it seem old. Plus, multitasking seems to cause more mistakes than they’re worth, and I’m far too uncoordinated for the stretching and squats. I may find myself going back to music or podcasts but, ever since my discounted student subscription to Spotify Premium expired, commercials between the same Hamilton songs I’ve listened to a thousand times get tedious.

Testing procedures have also changed around over the months and the current tests involve quite a bit of sitting around so my newest tactic is watching YouTube videos. That’s right, in the time of Coronavirus I sit in an otherwise empty and silent lab for three and a half hours twice a week and kill off brain cells watching strange, niche comedy, like a good millennial.

For anyone somehow in a similar situation, may I recommend the following:

The Try Guys

Since the Coronavirus panic started they’ve been releasing three videos a week plus two episodes of their podcast, which provides about three hours of content each week.

Buzzfeed Multiplayer

In particular, The Sim’s 100 Baby Challenge. Now that it’s back for Season 2, a 25ish minute episode comes out every Saturday morning and I wait very patiently until I test on Tuesdays to watch it.

Good Mythical Morning

I have no strategy for watching these in any order but there are a few thousand videos to keep me busy.

Clips from any decent comedian

Saturday Night Live, John Oliver, Jimmy Kimmel and/or Fallon: YouTube is programmed to recommend the most popular clips and ones that are most similar to other videos you’ve watched. Sometimes the all-seeing algorithms are good for us.

While testing in the time of Coronavirus still gets me out of the house during an otherwise empty week, and gives those engineering hordes working from home their weekly data fix, I can’t wait to return to my regularly scheduled work days. where I can procrastinate on moving back to the lab, talk to my co-workers, and have office snacks in between rounds of testing.

Kanban Basics and Diced Tomatoes

Growing companies often struggle with managing their inventory in the following ways:

The production line is down because it’s out of one component
Someone thought they could save money by buying in bulk, and now it takes up way too much space
The company is short on liquid assets yet sitting on excess raw materials for production
A great problem to have, but sales have outpaced the company’s ability to keep inventory on order

Much has been written in the last few decades about efficiently managing inventory. The American automotive industry has optimized its supply chain so that parts are sent to the production line exactly when needed, even going so far as to set up suppliers across the street from their factories. This isn’t realistic for most companies, but inventory management can be applied to small companies or even one’s pantry.

One of the tasks Zebulon Solutions helps companies manage is their raw material, to ensure they have enough materials to meet their customers’ demand yet don’t have too much money tied up in materials. This is frequently accomplished through a visual management system. My own pantry has benefited from setting up such a system to limit over-buying one item, say boxes of chicken stock, while running out of diced tomatoes.

I didn’t invent this system. The original concept was developed in the 1940s by an industrial engineer and businessman in Japan working for Toyota, Mr. Taiichi Ohno. He invented a simple planning system to optimally manage work and inventory at every stage throughout production, which became known as “Kanban.” Over the years, this has evolved into production lines using bins for visual management, process mapping, and taken into the software development world by David Anderson[1]. As for my pantry, I mostly use a visual management system for my raw material with predetermined reorder points, reorder quantities, known lead times, and estimated usage. Using a raw material example from my pantry, cans of diced tomatoes, we can understand how this could be translated to a production environment.

Visual planning or visual management – a means of quickly looking at something to determine what is missing, out of place, or needs to move. In my pantry, I can easily get a visual snapshot of what needs to be purchased and help me not overbuy when there is a good sale, or global pandemic, going on.

Raw material – in this example, it’s the diced tomatoes. In industry, it could be anything from bolts to circuit boards, plastic resin to fans. Whatever that factory is using to fabricate or assemble their products. Since diced tomatoes come in multiple sizes and my usage is inconsistent throughout the year (making soups in the winter), it will help us look at how this can be applied in a manufacturing setting. A visual planning system doesn’t require consistent usage.

Reorder point – the point of consumption where the raw material needs to be replenished. This triggers the buyer to order more based upon lead time. Typically, this isn’t set to zero, because that would cause the production line (or my recipes) to come to a halt while the raw material is ordered and shipped. Since tomatoes can be purchased in multiple sizes, the target inventory is to have no more than 4 large cans (28oz) and 8 small cans (14.5oz). This is slightly more than what is consumed in a week, but it also allows for the fluctuation in usage without incurring an additional trip to the grocery store (or an expedite fee in industry). When 6 small cans or 2 large cans are consumed, diced tomatoes are added to the shopping list.

Reorder quantity – the amount of raw material that is purchased when the reorder point is triggered. In the example of diced tomatoes, “6” is the reorder quantity of the smaller cans and “2” is the reorder quantity for the larger cans. In industry, the person who notices the Reorder Point is rarely the same person who places the order for the raw material. The person placing the order would look up the Reorder Quantity for each raw material and place the order with the supplier.

Lead time – the time between when a raw material is put on order and when it ships. Using the example of diced tomatoes, I grocery shop once every 7-10 days. The reorder point is established based upon how many cans would be consumed in a worst-case scenario, 10 days. If a recipe emergency occurred (oops, Auntie is coming over for dinner, what now?) and the demand for diced tomatoes suddenly increased (making the tomato-based soup she loves), I could process an expedited order and make an unplanned trip to the grocery store. In industry, a phone call to the raw material supplier could shorten lead time and sometimes a fee is levied on the unit price for the expedited delivery.

A second consideration is lead time increase. Especially relevant recently, where certain items have become suddenly unavailable, at the grocery store. What happens when the lead time increases from 10 days to 14 or even 140? This type of increase in lead time is not uncommon in industry where capacitors, for example, increase from being readily available to 52 or 86 weeks of lead time due to a major cellphone manufacturer placing ‘intent to purchase’ orders in the supply chain. For my tomatoes, it would be prudent to increase the reorder point (buy cans earlier) or the reorder quantity (buy more cans) or perhaps both if there is a substantial disruption to the supply chain, like we’ve seen recently.

While I’ve used tomatoes in my example, Kanban can apply to any inventoried item, whether in industry or a household, that is regularly consumed and purchased. A visual management system will help you keep a cool head when rumors of material shortages or unavailability occur. If you buy based on your actual usage, lead time, and reorder points, you should be able to prevent running out of items while maximizing your liquid assets….and your trips to the grocery store might be a little less chaotic.

[1] https://www.digite.com/kanban/what-is-kanban/

How to virtually qualify a supplier

In my 20+ years working in supply chain, I’ve visited hundreds of suppliers in multiple states and countries. Qualifying suppliers is essential both in building a relationship with the supplier and ensuring that customers’ needs are met. But what happens when global travel restrictions shut down trips to qualify a new supplier? Like many other jobs in the work-from-home era, qualifying a supplier has now become dependent on virtual assessment.

The first step for qualifying a new supplier is to do your research. You’ll want to check the reputation and qualifications of the supplier through both personal references and any online presence. When I am looking for a new supplier, I reach out to my personal contacts for recommendations. From there, I scour the websites of potential suppliers for videos and substantiated information that can prove the supplier’s worth

After researching the company, I’ll send out a request for information (RFI) to the suppliers I’m interested in for a more thorough vetting. Exactly what you put in an RFI depends on the needs of your company and product, but some top priorities to investigate include:

What does their customer base look like? How many customers they have for each facility will give you an idea of whether they have the experience for your project.
Ask what type of industries they primarily focus manufacturing on. Is it similar enough for your products?
How many employees do they have and what will be the make-up of their new product introduction (NPI) team? These NPI employees will be the ones responsible for your product, so you want an idea of what to expect.
Do they offer turnkey solutions? Some companies prefer to have more control over their material and IP. A hybrid option would be to have some material provided by the supplier, some by the company. Or full turnkey, meaning the company would rather have all material purchased and monitored in one place.
Request sample documentation. Ask for quality reports, first article inspection (FAI) reports, and relevant ISO compliance certifications and expiration dates.
Ask for customer references and D&B numbers to check on supplier reliability and financial status, to validate the information the supplier is giving you.

An RFI is standard in any supplier qualification but without being able to do an onsite visit of the facility in person, there are some additional request and questions to consider:

Ask to set up a virtual video tour of the facility. This is most likely new to some suppliers, so they may not have this as protocol but asking to set up some sort of walk around on a video call can aid in seeing what is on their manufacturing floor. Here’s a good example.
If you can’t get a full video tour, ask to see current photos or a quick video of their production floor. You want to get an idea of the size of the facility and how much of that real estate is taken up.

Be specific, both so you can both focus on what’s unique about your products and needs, but also to get past any tendency to just show you their stock marketing photos. For example, don’t just ask for Statistical Process Control (SPC) charts, ask for a photo of where they are posted.
Find out if the supplier has the capabilities to work with customers speaking a different language. If the supplier or customer is in a different country, their first language may not be English. Find out what procedures are in place for translations and translators. If they’re in a different time zone, make sure there is a time that works for both parties for any conference calls or virtual meetings.

Although Zebulon Solutions has worked with suppliers all around the world, it hasn’t always been possible to visit each location in person for other, boring reasons. It can be done. So, while today’s travel restrictions are certainly new and daunting, it isn’t impossible to find ways to work with new suppliers without in-person meetings. Physically seeing a facility is almost always preferable, but we’re fortunate that technology can make any gaps a little smaller.

This is new to all of us so do what you can to get the information you need, ask lots of questions, be patient with suppliers as they navigate their new roles, and maintain your social distancing as best you can.

The Supply Chain of Toilet Paper

Let’s talk toilet paper. We all know there’s a shortage, but where does toilet paper come from? What is its supply chain and how is it made? As a company full of supply chain and engineering professionals with spare time on our hands for a change, we want to know.

Like every product, it starts with raw materials. Toilet paper is made from wood pulp, along with water, chemicals for extracting, fiber and bleach. Yep, it’s that simple, trees. Which are a very renewable resource, so that’s good too. Both softwood and hardwood trees are used primarily from the USA, Canada or Russia. Also good. The pulp is processed, sprayed onto wire mesh to dry and then scraped off, rolled, cut into long strips, squared and finally cut to sized rolls.

Where are these paper manufacturers? There are several giant paper manufacturers in the USA. The majority of our toilet paper manufacturing is right here in the USA, in towns like Clatskanie, OR and Mehoopany, PA. More goodness. Of course there is likely a long string of warehouses and distributors between the factory and your neighborhood grocery store, which is undoubtedly being compressed right now.

Note, contrary to what you might have read on the Internet, this won’t actually lead to clear cutting of forests or similar devastation. Toilet paper doesn’t fluctuate in demand whether it cold or hot outside, or if it’s Christmas or Valentine’s day. It’s a stable product. Remember, the end use of toilet paper hasn’t gone up (hey maybe it’s gone down as people use fewer squares), it’s just that the inventory has shifted from warehouses and stores to people’s closets.

This will, however, lead to the bullwhip effect, where at the end demand will actually drop and there will be a glut. But that’s just how supply chain works.

And hey, maybe even a few of those excess rolls will end up back in trees. Ironic, or what?