Ten million parts went into the 30,000 suitcase-sized ventilators that General Motors
From the moment in mid-March that GM and Ventec first discussed their alliance to ramp up production of Ventec’s VOCSN critical care ventilators, the project moved quickly, as the severity of the coronavirus – and of equipment shortages – became more apparent with each passing day. Right away, the joint venture hit a hurdle: factories in India that manufactured crucial VOCSN parts were shut down because of the pandemic.
What happened next was an ambitious leveraging of GM’s supply chain as well as an array of additive manufacturing (3D printing) techniques allowing project managers to creatively improvise, over the course of about three weeks, an ad hoc ventilator parts supply chain. GM assembled and re-trained a workforce normally tapped for making engines.
The sheer logistical feat – executed prior to the Trump Administration invoking the Defense Production Act – nevertheless harkened to patriotic wartime mobilizations of the early 1940s. The White House took its victory laps. GM’s repurposed plant in Kokomo, Indiana, got its 15 minutes and a visit from Vice President Mike Pence.
With so much credit to go around, it’s not hard to see why scant attention got heaped on Southfield, Michigan-based ABC Technologies’ role producing injection molded ventilator components; or Buffalo, N.Y.-based Caplugs, which made the vinyl caps used to seal the ventilator’s external bacteria filter during shipping so no dust got in; or Arlington Heights, Ill.-based Faspro Technologies, which rendered via lasers zinc-coated structure-mount brackets; or Minneapolis-based Twin City Die Castings which made tiny pistons using custom molds that were made by Grand Rapids, Mich.-based Die-Tech & Engineering; or Ottawa-based Crank Software which updated the VOCSN operating system allowing for easier-to-use touchscreen settings.
That the U.S. was left scrambling for critical equipment has over these past Covid-19 plagued months put a spotlight on the fragmentation of the medical supply chain, and continues to force more attention, generally, on the entire global supply chain, across all sectors in every corner of the logistics space.
There is now, supply chain experts and industry members say, a shifting paradigm for sourcing materials and parts. Where something is made – overseas versus closer to home – is one branch of the decision tree. How something is made – considerations paid to automation, 3D printing and other forms of advanced manufacturing – is another. Cost, of course, is another.
Interestingly, cost analysis getting lumped in as merely part of a holistic thought process – as opposed to being pretty much the sole driver – underscores how significantly pandemic-related disruptions are altering supply chain strategies.
Cost efficiency appears to be taking a passenger or even back seat to resiliency, redundancy and flexibility.
“Over the years, the concept of ‘just in time,’ or ‘lean logistics’ became the rage,” explained attorney Ronald Leibman, partner and head of the Transportation, Logistics & Supply Chain Group at McCarter & English.
Lean logistics allowed for the creation of highly efficient, single source, or regionally dependent, supply chains with an overall goal of minimizing cost per unit, and keeping inventory levels, and related costs, as low as possible, Leibman said.
Short-term disruptions, whether owing to Superstorm Sandy or SARS, were warning signs, but they went unheeded; lean logistics remained the norm.
The pandemic changed that. “Covid-19 was the great accelerator,” Leibman said.
With a world thrown into crisis, supply chains broke apart and the true cost of single source and regional dependencies came into view. Money saved over the years having low-cost but far-flung suppliers, and limited rainy day reserves, aren’t topics that dominate conversations among logistics managers and the top executives to whom they report. Discussions these days, Leibman said, focus on “failures in the supply chain caused by the inability to adapt to a quickly changing, unanticipated environment.”
Filemon Schöffer, co-founder of Amsterdam-based 3D Hubs, a network/platform for manufacturers to share technologies, is helping to re-imagine supply chains through innovations in 3D printing but also CNC machining and injection molding. He has a bird’s eye view of worldwide trends.
One clear trend is that more engineers are leaning heavily on making components using additive technology and automation, as they seek lower costs and shorter turnaround times relative to sourcing parts from suppliers, regardless of whether the suppliers are locally based or overseas, Schöffer said.
“Onshoring” isn’t really the buzzword some would purport it to be – because the world, for all of the smoldering trade tensions/jingoism, remains interconnected; globalization isn’t going away, but it’s morphing; meanwhile, ever-improving, increasingly affordable technology advancements continue to shift the dynamics driving customer-supplier decisions.
Looking for increased reliability, UK-based Warwick Acoustics, makers of high-end headphones, shifted away from getting its supplies from China where the company butted heads with trade, language and time zone issues. Now Warwick uploads a CAD file on to the 3D Hubs platform and desired parts automatically get routed to a suitable supplier with capacity and put into production, according to Schöffer.
Toronto-based Kepler, makers of nanosatellites, at one time relied on parts that predominantly came right from the Ontario region but the rigors associated with gathering/assessing bids led to an unnecessarily protracted lead time. To tighten all that up, Kepler switched over to Europe’s 3D Hubs.
The ramifications of manufacturing’s truly global village can seem like an industrial saw with carbide-tipped blades: they cut through everything in both directions.
To support its ventilator-making partnership with GM, Bothell, Washington-based medical device maker Ventec needed to update user interface (UI) software; this involved partnering with Canada’s Crank Software, which, in turn, to support those efforts, needed to upgrade real-time computing hardware, resulting in a partnership with India’s iWave Systems Technologies.
“We are seeing firsthand how companies are refocusing strategies and adapting to create more flexibility,” said Davy Brown, Chief Technology Officer-industrial solutions, at electric sensor maker TE Connectivity
Some compounds, ores, chemicals, plastics, whatever, may no longer even be available, so manufacturers may need to plan to purchase raw materials that potentially cost more or use different materials altogether. And so the global supply chain, as ever, remains stubbornly, indeed staggeringly, amorphous, with the things that comprise things getting shipped around the globe, many times over, among developed and developing countries, and ultimately pieced together in some other location, becoming finished products that are then exported and the journey around the planet starts again.
Over the past 40 years, much of manufacturing production worldwide has been organized into global value chains (GVCs). Covid-19 as of this summer had roiled GVC hub regions, with serious implications for international production networks, according to a team of researchers at the United Nations Industrial Development Organization’s Department of Policy Research and Statistics.
However, China’s exports rose for the fourth straight month in September, signaling for the GVC gargantuan a return to full manufacturing production, Bloomberg said Oct. 13.
Still, the pandemic, coupled with trade and geopolitical tensions, has amped up the pressure on firms to consider diversifying their supply chains away from China, Rabobank analysts said in July. “We find clear indications that U.S. supply chains have started to shift away from China,” they said.
And that’s based on data collected prior to the pandemic. U.S. imports from China fell by $88 billion in 2019. At least $20 billion worth of that production could have moved from China to the U.S., according to the Rabobank analysts, Michael van der Veen and Ralph van Mechelen.
Among the biggest beneficiaries of the away-from-China supply chain shift: Vietnam, Taiwan and Mexico, they said.
Many products are made domestically, “onshore,” with supplies that come from “offshore.” This is largely the case on each continent, regardless of which ocean might lap up against it. Even if companies start to “re-shore,” it would take decades to unravel such a densely interwoven tapestry.
Consider one the best-known symbols of the American spirit – the Harley-Davidson
In 2008, Newell Rubbermaid closed down a Dewitt, Nebraska-based factory that made the iconic Vise-Grips brand of pliers and moved the operation to China. The move put the squeeze on some 300 workers. And it crystallized the harshness of bottom-line-driven conglomerates in the grip of executives able to stomach being perceived as heartless provided they could argue that their actions were in the service of maximizing shareholder value.
Ten years after the Dewitt Vise-Grips plant shuttered, in a semi-sweet footnote, Annandale, Minnesota-based toolmakers Malco Products refurbished it for production of its Eagle Grip pliers. However, only a small fraction of the lost jobs were restored. Malco’s HVAC tools are its biggest sellers, mostly in the U.S. Whether there are ever to be more jobs created in Dewitt could hinge on the company’s continuing efforts to sell more tools – in Latin America and South Korea.
Right now, no Minneapolis-made product has brought more attention to the complexities of the global supply chain than 3M’s
“The U.S. will likely be struggling simply to keep health care workers safely stocked up for at least a year,” said science writer David H. Freedman.
As Frontline recently exposed, there were repeated warnings over the past decade about America’s overreliance on foreign-made protective gear, but they went unheeded.
In addition to blaming its predecessor, the Trump Administration blamed 3M.
But 3M is on track to produce 2 billion masks this year. And more than half of them will be made in the U.S.
Honeywell, meanwhile, is building up capacity so it can make 250 million masks per year, Freedman said.
Recently set up, a new manufacturer, Miami-based Maskco Technologies, is seeking to make hundreds of millions of masks per year – using machines made in China.
Ventec Life Systems, meanwhile, continues making ventilators at plants in Bothell, Washington and Kokomo, Indiana.
Following the delivery of the 30,000th ventilator to the federal government at the end of August, the full order having been completed in 154 days, GM formally turned over operational control of the company’s Kokomo ventilator manufacturing operation to Ventec.
“We helped our country through rough times,” said J.C. Barnett, group leader at GM, in a statement. “We have done our part. And it was the right thing to do.”
Everyone involved in the project, GM said, deserves credit. A list of 90 parts supply chain contributors is here.
“We’ve been in business a hundred years and this might well be our biggest moment in a hundred years,” Twin City Die Castings CEO Todd Olson told NPR earlier in the year about making tiny ventilator pistons in a time of peril for the country.
Ian Cartier, robotic technician: “We came in with the attitude that for every challenge we were handed that day, that we would face it, fix it and overcome it.”