Lessons Learned?

This whole Covid experience should have educated us as a people and as a country. There are loads of folks pointing to the political and control things we should have done, or did, or didn’t do. I’m not going there, though. As an engineer I am more interested in looking at what we could have learned tactically.

All in one?

First, there might be value in NOT consolidating. In the last few months I assume many state government folk have realized that if their state had at least one company that manufactured toilet paper or N95 masks, they would not have the kind of trouble they have today. The Governor of Maryland had to reach out to South Korea to get medical test kits. I bet Maryland is now looking for companies to locate in the great state of Maryland to manufacture disposable medical equipment. Maybe this is an opportunity for manufacturers to expand their footprint after decades of consolidation. There is no shortage of one-company towns in the United States who would love to have another manufacturing center.

Subsidizing?

Second, there might not be as much value as you think in moving commodity manufacturing offshore. Back to the test kits, the availability of a cotton swab because the vast majority are made elsewhere for economic reasons should now be a red flag. I get it, nobody wants to pay more for a swab. Again, this is a good lesson for our leaders. Lots of governments, including ours, subsidize critical infrastructure. We subsidize oil, corn, dairy, and housing. If we can’t figure out how to cost effectively manufacture commodity medical supplies, maybe we should look at what that subsidy would cost. This pandemic won’t be the world’s last (I hope – jeez!).

To CM or not to CM...

Third, and last from my desk, is the notion of outsourcing. Companies that develop processes for manufacturing specific product, say Ventilators, often move the production manufacturing out as fast as possible to a contract manufacturer. This can be a great tool to clear your R&D folk to get to work on the next best thing, but it misses the chance to expand the company capability. Unless the product is going to be sporadic, where the lot size is huge and the lot frequency is low – say IC chip production – there’s a better opportunity to invest in a facility dedicated to production. It usually doesn’t need to be huge, often the facility can be leased and running with little modifications; put your facility and manufacturing engineers to work!

Swing the pendulum.

Since the 1980’s I have watched the business model of slash and consolidate in the United States remove our manufacturing capability. The never-ending quest for short term gains in a quarter by quarter industry is not something of which I am a fan. The finance folk with their strategic wisdom to increase margins have benefitted the business leaders. This experience might help those business leaders find ways to return the favor. Maybe we were too spread out in the last century, I’m sure there was some waste in the way we did things. The pendulum has swung to the other end of the room, and here is a chance to bring some of this home again.

-o-

David West is a mechanical engineer with over twenty years in engineering management and building teams. He has consulted with, or worked for, companies in Production Manufacturing, Pharma, High Tech and Med Device.