I Just Secured an Order for 5 BILLION Masks!

Did you believe the title? C'mon be serious, for one moment you want to know how I did it. If you're curious or want to know more then this article will give you some insights into the PPE and healthcare related industry during #COVID.

I don't know if you do what I do, it's when frustration mounts I often write? This time my frustration ended up with a final post on a whatsapp group after another 5 billion mask order was "SOLD!" After which I left the group and a few other HELP the WORLD COVID groups.

While this is not a full commentary about the industry, maybe this will help anyone who's a decision maker to think differently and smarter.

This is what I posted....with a few edits for clarity

I just was told that they (the Whatsapp person) knows personally of a 5B piece order for #N95 certified 3M masks. I'm fed up so this will be my last post here in the group because what I'm reading shocks me...

It shocks me because smart people are acting stupid. Why might I believe this? It's because this month 3M's CEO outlined publicly their production capabilities to the world and it's impossible to hit 5B masks sold.

3M Chief Executive Mike Roman in an interview unveiled that 3M and their subcontractors could manufacture in the US 50M pieces per month and that 3M has upped capacity global capacity with the expectation by mid-March to produce 35M in the US and 100M masks globally.  (Article if you have WSJ access 3M CEO on N95 Masks:'Demand Exceeds Our Production Capabilities').

The article also stated that HSS had already ordered 600M masks to be distributed over an 18 month period and that was a LARGE ORDER!

All these orders are for the 3Ms most cherished product on the planet. It's not because the product is that much better, a 95 mask is a 95 mask. It's because 3M has done an awesome job branding and as a result have become a trusted product. The belief/trust translates to, "If I purchase masks from 3M I won't end up with 600,000 faulty masks" which is exactly what happened to the Netherlands who ordered from China which ended up being faulty. (Article)

What the CEO didn't talk about was the production of the product is not just manufacturing, it's raw materials, mask materials, and then manufacturing to meet the certifications. He didn't talk about the fact that there were approximately 8600 companies in all of China manufacturing products from PPE to ventilators prior to December of last year. Into 2020 36,000 companies registered to produce similar products.

He did not talk about the traditional timeline for certification or that these fast track certifications are given as sloppily as the US's bumbling failure to deliver emergency relief funds, websites servicing COVID19 around the world crashing, governments such as #Brazil playing Russian roulette with it's citizens.

Typically certification used to take 3 months+ for CE and FDA.

Do you really trust these organization to properly give our certifications if NO ONE IS FLYING to inspect or to identify errors in the system when the world is in lockdown? What disturbs me is the FDA is under the Trump administration whose team ordered over $60M dollars worth of product from an engineer who never sold any product because he tweeted to a president that he could help!!! The product ordered was never delivered.

Back to the masks...I'll add there are not enough mills or equipment in the market to produce the goods. A mill might take 3-8 months to get a lineup and running and this is throttled back because the production of high speed automated equipment may takes 4-6 months to build. 

A manufacturer of high-speed mask-making equipment also needs a complete supply chain that does not exist today due to COVID restrictions including lockdowns. Equipment manufacturers need...screws, plates, springs, milled pieces, coating facilities, they need shipping capabilities, electrical lines dropped, permits created, training....and people around the globe to deliver quality materials.

So if someone has an order for 5B 3M masks this would consume a global capacity for years!! The US placed an order for 150M+ masks with 3M at about the time 3M's CEO made is a public address.

Now think, if there are 193+ countries in the world if just the 1st world countries each ordered 5B and 5B and 5B or 1B, 1B, 1B...OMG, this is not possible to manufacture...plastic straps, sewing machines, dye makers, operators, etc. It's NOT logistically possible to have ramped up in 3 months to this scale. Even if global non-3M product was added and the world figures and if the world could produce 300M masks, a 10B mask order would be FULL for 33 MONTHS!!!!

It's also terrible how many people have chased product on the ground that does not exist. It's all math, just math, The below is from a photographer environmentalist posted in April. HOW in the world can there be this many masks sitting on the ground someplace.

Imagine you owned a business, and you could produce 100M masks per month. The same masks you used to sell for US$1.30 are now worth US$3.00+. Would you have not sold them as a production run? Or would you have just kept on building up inventory until one day you announce to the world, "We now have 100M masks come buy from me!" No freak'in way!! That's $170M profit sitting with vendors to pay and a huge windfall.

Now let's expand your thinking to the list, do you really think 400M (total of image) masks are sitting around in warehouses waiting for customers? Where owners and leadership are saying, "No, no, no, don't tell anyone, don't ship anything, we want to wait until we have 400M masks, then we will sell them" The Chinese are under a socialist consultative democracy, however, they are capitalists (and opportunists) meaning many Chinese own their own businesses.

Besides, China's getting hit hard from leadership around the world because of faulty products and given China's desire to be the world leader this does not look good poor products could hinder negotiations.

A few days ago 89M masks were confiscated for poor quality. (Article Link)

Let me add this, IF YOU SOLD product from the many shoddy factories, because as you tell everyone, "YOU want to help..." YOU might have killed somebody. Think about what I just said, If you sold from any of the potential 1000s of illegal or fake non certified factories and someone died, or worse yet many people died, then you contributed. Yes, you. You know who you are, you're so quick to tell everyone, "Let's help..," followed immediately, without taking a breath you then add, "What's my cut?"

Helping is FREE or marginal..it's not huckstering for your commission. That's capitalism and be honest it's self serving if you are not checking out your factories and to be honest with yourself, most people selling product are not. All you want to know is, "Do you have POF (Proof of Funds), an LOI, is this an L/C, can we do escrow...?" 

Personally, I only work with one set of factories for ventilators and other PPE. Factories that has been manufacturing for years CE/FDA. If I lose an order so be it. I need to sleep at night. 

You do your own math. PLEASE do the math. 5 billion is impossible and so to are many of the deals being proposed. Please do your DD (Due Diligence)...Then take a breath and bring civility to your life, sleep a little, love your family.  

Lastly, my thoughts are, this is going to easily run into 2021. Ebola vaccine took 5 years to develop a vaccine. Let's hope with the world partially working together, because we as a global community are far from working together, we can solve this faster.

Be safe.

End of post

Leadership, decision makers need to think, to connect the dots, to see human behavior, the think. I hope you can see the lessons and thinking within the frustration I've experienced and maybe it will help you. If you'd like to reach out, love to hear from you. I always reply!

Be safe!

NOTE: In case you didn't realize this from the beginning a 5 billion piece order would be a minimum of a US$20,000,000,000 purchase order at $4.00 per mask. Anyone writing L/C or is this an all cash order???

David Goldsmith is the award-winning author of the bestselling book, Paid to THINK: A Leader’s Toolkit for Redefining Your Future and the Co-founder of the Goldsmith Organization, a world leading provider of coaching and strategic advising, serving executive-level decision makers including many from Fortune 500 companies working with over 300 industries, been an entrepreneur since university. He is the founder of the Project Moon Hut Foundation, a six-year effort with NASA to improve life on Earth through the accelerated development of an Earth-and-space based ecosystem. David is also Co-founder of Buzd, LLC, and an adviser and stakeholder in several other cutting-edge startups from around the world.

David is the recipient of the Hollywood Producers’ first ever Global Visionary Disruptor Award for his work with the Project Moon Hut Foundation. During his twelve years of professoriate at New York University, he received the university’s Excellence in Teaching Award. He was also named by Meetings Magazine as one of its 26 Hottest Speakers. 

He's lived in Asia, Europe, and the US bringing a world view

For more, email [email protected]

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David Goldsmith

Goldsmith Organization New York & Hong Kong, Project Moon Hut Foundation

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