In March, the Institute for Supply Management (ISM) Purchasing Managers’ Index (PMI) outperformed recent projections, inching downward by just one percentage point last month. The index was slated to fall from 50.1 in February to 44.5 in March. Instead, the decline was less pronounced, with the index finishing at 49.1. Shortages of critical supplies used to treat COVID-19 (coronavirus) patients have mobilized a range of manufacturing industries to churn out new products.
As the coronavirus escalates, procurement teams facing product shortages and delays may need to consider some unconventional solutions. Here’s a list of industries that are transforming their production lines to serve medical facilities and others in need:
The automotive industry was one of the first sectors of the global economy crushed by the coronavirus outbreak. While the virus continues to take a massive toll on automakers, some plants have managed to remain open by supplying life-saving devices.
General Motors (GM) led the mission, contracting with Ventec Life Systems, a small ventilator supplier in need of support. With GM supplying critical components to Ventec, its previous output of 200 ventilators per month will increase tenfold. As production ramps up, they hope to eventually hit 10,000 per month.
Ford Motors has jumped on board, working with General Electric to build ventilators. Beginning in mid- to late-April, they plan to produce 50,000 ventilators in 100 days, supplying 1,500 by the end of April, 12,000 by the end of May and 50,000 by the beginning of July. As of April 6, Ford has also produced and shipped at least 1 million face shields for healthcare staff and are working on providing respirators, too.
2. 3D Printing
Versatile 3D printers are helping fill in gaps while mass manufacturing operations scale up. Following in Italy’s footsteps, 3D printers are churning out ventilator components and other critical supplies. Due to the crisis, nasal swabs from Italy, a leading producer, are in short supply, prompting domestic 3D printers to pick up the slack.
Markforged has developed testing swabs that are currently involved in studies at UCLA, UCSD, Harvard and other leading institutions. The MA-based manufacturer of 3D printers is currently able to produce 10,000 swabs per day with hopes of reaching 100,000 swabs per day depending on demand. The company has also produced at least 300 face shields for local hospitals and first responders.
Protolabs is waiving fees on expedited orders of critical components for ventilators, as well as test kit supplies and PPE products. Recognized as a leading on-demand manufacturer with 3D printing, CNC machining and injection molding systems, the company has already completed a production run of 10,000 parts in just 24 hours.
HP has delivered at least 1,000 parts to local hospitals. The company is working on hands-free door openers, mask adjuster clips, face shields, test swabs, face masks and ventilator valves. Its printers can produce roughly 50 to 70 masks daily.
A Formlabs initiative to match healthcare providers to 3D printers is underway. In addition to printing nasal swabs and working on an adapter to turn snorkeling masks into respiratory protective equipment, the company is locating Formlabs customers that are willing to use their printers to help address supply chain shortages and other healthcare needs.
3. Fashion & Beauty
Apparel manufacturers have long been offshoring their operations, but the remaining factories in North America are coming together to support healthcare workers. A coalition of 11 brands have shifted their production to include PPE. Meanwhile, with safer-at-home directives slowing demand for cosmetics and personal care products, operators are finding new uses for their ingredients.
Hanes, Fruit of the Loom, Gap and other apparel manufacturers will use domestic and Central American factories to produce up to 10 million face masks per week. The clothing companies began production without a final U.S. government contract, quickly volunteering their resources rather than waiting for orders.
Separate from the coalition, Brooks Brothers and Nordstrom are stepping up to help the cause. Brooks Brothers plans to use plants in New York, Massachusetts and North Carolina to produce 150,000 masks per day, in addition to making gowns for health care workers. Nordstrom has committed to sewing more than 100,000 masks made from surgical wrap.
John Paul Mitchell, L’Oréal and Proctor & Gamble have experience using alcohol in beauty products, but their latest production runs will repurpose the ingredient. John Paul Mitchell’s first run of hand sanitizer will yield 20,000 units to be donated to healthcare institutions and first responders. Once fully operational, Proctor & Gamble plans to produce at least 45,000 liters of hand sanitizer per week under the Safeguard brand, through which they’ve previously offered less powerful sanitizers.
As U.S. coronavirus cases grow in number, a long list of manufacturers are shifting gears to support hospitals and healthcare workers. Buyers in need of ventilators can watch major companies like Remington, Dyson and Tesla, which are in various stages of ideation and production. Along with industry leaders like HP and Markforged, 3D printing startups may be viable options for buyers. Distilleries like Fifth Generation (maker of Tito’s Handmade Vodka) are also undergoing a massive transformation as they crank out hand sanitizer products. While mass production is the end goal for the newly transformed manufacturing giants, small-scale local providers have been of service to neighboring hospitals and local police departments. As hospitals’ stockrooms empty out and major medical supply companies run short, procurement departments may need to get creative, forging unlikely partnerships with local manufacturers.
By: Kim Bucci
Sign up to our newsletter
Solving the Warehouse Staffing Crisis
Surging e-commerce sales are driving record gains in warehouse employment, a trend that will only intensify heading into the holiday season. ProcurementIQ outlines strategies to mitigate the labor shortage risks that are poised to emerge.
Building the New Normal in Procurement
The rise of the coronavirus has turned procurement on its head. Which practices will manage to break the surface?
Financial Matters: Understanding Financial Statements
Companies’ financial statements are packed with numbers and figures that may seem confusing at first glance. While taking a templated approach to analyzing financial statements is an easy way to help procurement staff evaluate such dense documents a one-size-fits-all approach could cause procurement staff to misinterpret outliers.