The COVID-19 pandemic exposed weakness in manufacturing supply chains both nationally and in New Jersey but also surfaced potential solutions, according to a panel of business leaders and experts convened by the New Jersey Manufacturing Extension Program.
The discussion, titled Boosting Supply Chain Resilience, was held virtually on Oct. 5 as part of the NJMEP’s Manufacturing Day event. Moderated by NJMEP Chief Operating Officer Robert Stamara, the panel also included Unionwear founder and President Mitch Cahn, Hatteras Printing founder Bill Duerr and Douglas Yorke, the director and sector lead for Advanced Manufacturing at the New Jersey Economic Development Authority.
Stramara noted that at the outset of the pandemic, it became clear that many of the products the health care system need most were being made overseas. Domestic manufacturers had to quickly pivot from their ordinary business to producing personal protection equipment and other gear. Cahn and Duerr both described how their companies used materials they had on hand to make new products.
The larger issue, though, is what to do in the future. “We have been exposed as having no idea where our supply chain disruptions” can occur, Cahn said. “People who run manufacturing companies are going to have to change.”
Cahn referred to the theory of constraints, which holds that bottlenecks develop in any system and that the same holds true for the economy as a whole. “We have to become better at predicting consumer behavior,” he said. “We have to be better at predicting reactions to regulations and black swan events.”
Cahn’s experience, and that of Duerr — who noted that as a business that typically only makes products that customers approach them to make, Hatteras was forced to get into product development — underscored the need for flexibility. Yorke picked up on that theme by noting what the NJEDA can do to help. “Flexible thinking and flexible equipment will make us more competitive,” he said. The state agency can help even small businesses understand how advanced equipment can make their businesses more agile and that it can be affordable.
Being flexible, though, requires “over-communication early,” Duerr said. “Leadership really needs to be in tune with the rest of the company and communicate across the company.” He urged executives to share successes with employees and suppliers.
Yorke said the pandemic also served to hammer home the importance and intricacy of manufacturing supply chains, an awareness that was not widespread previously. “If you’re a pharmaceutical company, you can make all the pharmaceuticals you want, but if you can’t get bottles to put them in, who cares? If you can’t get labels so you know what’s in the bottles, who cares? And if you can’t glue to put the labels on the bottles, who cares?”
In addition, the pandemic highlighted the increasing relevance of reshoring; that is, bringing manufacturing capacity back to the U.S. from overseas. Cahn said leaders should assess the cost of importing not only to an individual company but also to “the entire economy when there is a crisis.” He cited statistics suggesting that 30,000 people may have died from COVID-19 because the U.S. did not have sufficient supplies of ventilators or PPE.
“You also have to consider the cost to your reputation if you continue importing when you could be manufacturing domestically,” Cahn said. He noted that Unionwear’s products — baseball caps, backpacks and other items made for promotional purposes — are more expensive than those of other companies. But many buyers want to put their logos next to his “Made in America” label. Unionwear has earned national recognition for its reshoring efforts.
If leaders make the right choices, Cahn suggested, in the next crisis “domestic manufacturers will come to the rescue.”