Manufacturing Supply Chain Woes
Sam Gupta, Jim Vinoski and Jeff Long
Welcome to the Manufacturing Woes show. This is a show. I’ll be hosting the second Tuesday of each month to bring people together in our industry to talk about what really happens in the world of manufacturing. And believe me, it is not all pretty . Our show aims to bring together experts to share their manufacturing nightmares, train wrecks, and meltdowns and also reveal the wisdom gained from their mistakes and how they’ve learned to refine their skills and add more value to their company. I’m Sarah Scudder, CMO at SourceDay and will be hosting today’s show. I will be joined by Jim, Lori, Jeff, and Sam. All of them have extensive manufacturing experience, and I’ve asked them to share their nightmare stories with us today.
I’m excited to announce our new show sponsor, Rapid Ratings. I’ve been friends with Eric and the team for many years. They actually have a virtual supply chain conference running today. Eric, so would love to have you do a quick intro and talk about something new or innovative that you guys are working on, or how you’re adding value specifically to companies and manufacturing.
Yeah, great. Thanks, Sarah, and thanks for your help with moderating one of the panels today. Yeah, we are innovating in the space around financial risk, and we’re providing predictive insights around the supply chain from manufacturers into their tier ones, tier twos, and tier threes. It’s really about getting them to lean in and collaborate with that supplier, really understand their business, and make sure they’re not deteriorating as rapidly, you know, without really understanding what’s happening at that company. So we’re here to provide those predictive analytics and walk people through what we do and really get in front of those issues beforehand so people can mitigate risk. And so we’ve got a platform, and we are innovating with what’s called an FHR exchange, so suppliers can now join and really get insights on themselves. So it’s really about that two-way collaboration.
And Eric, it looks like I’m seeing sunshine behind you.
Yeah, here in New York, it’s a balmy 47 degrees. I’ll take it. So thank you.
It snowed in Austin last week on Thursday or Friday, I don’t think. Oh man, the entire city kind of shut down and there were absolutely no cars on the road. Wow, wow. Yeah, I guess they’re not equipped.
Was it icy?
Yeah, so Friday, in particular, because it snowed on Thursday, people completely avoided going out almost because they don’t have the infrastructure to salt the roads. So you guys are set up for that in New York, but we are not here in Texas.
Sounds like another supply chain topic right now. Thanks, Sarah.
Awesome, Eric. Thanks for being with us today and thanks for sponsoring the show. Absolutely.
Great. Alrighty, so time to kick off our conversation. I like our panels to be interactive, so please please do not be shy to put your comments, questions, thoughts throughout the show today. And I’d like to kick off by having everyone tell us where in the world they are joining us from and then if you have a word or phrase to describe your craziest manufacturing experience, would love to hear that as well. So where you are joining from and then a word or phrase, throw that in the chat for us. So, to kick us off today, Jim, I want to start with you. Let’s have you do a quick intro, and I’d like to have you share a fun or personal fact about yourself that most people don’t know. Yeah, okay. Thanks, Sarah. Appreciate the invitation to join you guys today.
I’m Jim Vinoski. I am a Forbes contributor in the manufacturing space, president of a company called Cosgrove Content that provides writing services to manufacturing 30 plus years on the floor in manufacturing, in the trenches as I like to say, so I’ve seen a lot of things. Interesting thing about me: Yeah, I’ve been a lifelong cyclist, so that’s how I blow off steam when the crazy world gets to me. I go out and get on the bike or get on the trainer and work it out. And I see a red van on your bookshelf. Yeah, there’s a special story about that that you want to share. Okay, so that actual van you’re looking at there is a toy I got when I was maybe three years old. In fact, one of my earliest memories is that they had a back seat that would pop out anytime you turned it up and down. Really cool van, but that was one fault and I remember taking it over to my dad’s office, which was right next door to our house back then, to get him to fix that seat, put it back in. My first car was a ’68 VW bus. I wish it was green and then I could put it on display here in our media room.
Well, Jim, super excited to have you with us. This show is meant to talk about all the bad stuff, the train wrecks, the not-so-fun stuff that happens in manufacturing, so I’d like to have you kick us off by sharing the absolute worst day in your manufacturing career.
Okay, so that would be a day that was kind of the culmination of months of work. I was working for a place that did soy protein isolate. We had started up a new plant that was built on the site of the plant I’d been working at. We got it up and running, and that all went well. But then I was assigned the duty of starting up a side system for drying the spent soybean grains. And it, as I found out, was improperly designed, had been mothballed for several years. It had all kinds of things wrong with it. But my boss, before assigning it to me, had committed that it would be started up in a week.
So, needless to say, the week went by, the month went by, several months went by, the system still wasn’t started up, and I was putting in 18 hours a day, seven days a week, had almost no resources. I went to the well, trying to get resources, get help, but there was no money for it, and so I was kind of left out there, dangling, and so the worst day was I was relieved of command after all that effort. Basically, they just said, “Yeah, you failed. We need someone else to take over.” And I remember going home and just sitting on the couch, utterly ruined, because I had put my all into it and got a sore kick in the pants for it.
Looking back, Jim, what would you say is one of the most important takeaways that you learned? Yeah, well, a very good one because it became an article subsequently. I left the company, needless to say, and I went to work for General Mills, and my very first startup situation there was the complete opposite because we had realistic expectations set up front, because we had proper resourcing. We had people who weren’t playing political games. They just wanted to get the job done. I had the support I needed. I had the resources I needed. I had a successful startup and wrote an article about the difference between the two. So, yeah, the learning was I should have walked away from that a long time before. People who set the expectations need to be willing to put in the resources to make it capable of meeting those expectations, and so, yeah, careful what you jump into.
Thanks for being with us, Jim, and you survived just fine. You didn’t scare yourself away from manufacturing, so that’s good.
Jeff, you are up next. Would love to have you introduce yourself and share a fun or random fact about yourself as well.
Yeah, thanks so much for having me on today, Sarah, and I’m looking forward to hearing other people’s stories and just kind of having a, hopefully, a laugh as we look back through some separation of time, right?
And so, something interesting about me is I’ve been to all 50 states, and I made that before I turned 25. So, just through a series of different trips and things, it was never planned or on purpose. Some were for work, some were with family growing up, and a missions trip here and just traveling there, and it just kind of added up, and I think I was 24 or whatever, and I looked and I was like, “Wait, I just hit all 50. How cool is that?” So, I’ve learned there are good people everywhere and there’s challenging people everywhere, so I’m in Ohio and so, sure, I’d love to have some mountains or oceans by me, but you know, as long as at least for me, I’m with good family and friends and people in a community, then it’s a valuable experience. Awesome. Do you want to maybe also touch on how you got into the manufacturing space?
Yeah, I’ve been doing this for 19 years, and I hired a, you know, a fancy consultant because I knew I could be better and better serve more and so one of the activities was to look at the projects, companies, clientele, all of that and and try to figure out like what made the most sense. And back then, I was more of a general agency, but in my heart, I kind of knew manufacturing was where it was at. Like I had a passion for it. I kind of think in that kind of engineering-type way, and it was a no-brainer to kind of put other industries on the back burner and just go all in manufacturing. And it’s been beyond an honor to kind of be in this space of manufacturing. So, every time I walk into a shop floor or talk with other manufacturers, it’s like, it’s just a fit, right? Good people, they’re making good stuff, they’re you know, helping the world. So, I can’t imagine working with any other types of companies.
So, Jeff, what happens when customers or out-of-state management can’t come to the facility to see the products and people?
Yeah, so you know this obviously was a big deal with Covid, of course, but even before that, right? I mean, travel is expensive, and just a lot of logistics. And so, you know, one of the challenges, one of the woes, you know, that I’ve experienced, especially in the last year and a half or two, a company, international company, I work with had a 400,000 square foot facility. They were going to do this big grand opening in March of 2020, obviously they couldn’t, and so, you know, they looked to me and my company for some marketing ways to do a virtual grand opening. So, we did a virtual tour as one of the things where we went into the facility, not the whole 400,000 square foot, but we scanned certain rooms, certain floors, certain things, and we have a virtual tour where somebody can go on their phone, tablet, or computer and really walk around and see the sights and then we have these little pop-up videos that explain certain parts of the facility, the machines, you know, what’s going on here, and it became this 24/7 sales system that they wouldn’t have had if Covid didn’t happen. Obviously, nobody wanted that to happen, and it was a big bummer that they couldn’t have an in-person grand opening, but this virtual tour was part of that. So, as like many things, I’m sure we’ll find out today, there’s good that can come out of the woes, hopefully.
Well, Jeff, thanks for being with us today. Thank you.
My friend Sam, I think I’ve lost count now of how many panels we’ve done together. It looks like your background has changed a little bit too. Yeah, it’s changed a little bit, and today is not the best day for bandwidth. Streamyard is not cooperating, and I’m hoping that’s going to be on my side. I don’t know if you guys can hear me okay, but you guys are definitely breaking up. Okay. Lori, who’s supposed to be on the panel, she’s having problems getting into Streamyard as well, so maybe they’re having some issues today.
So, Sam, would like to have you start off with an intro and a personal or random fun fact. Okay, so people who don’t know me, I am Sam Gupta. I am the principal at ElevatIQ. I am also a podcast host called WBS Rocks. I have been doing this for roughly 20 years. I have led many different ERP and digital transformation engagements as part of ElevatIQ. We are an independent ERP consulting company. We get involved with our clients much before any ERP conversations are going to start, so we are going to help them with business process redesign, system procurement, you know, any sort of you know project recovery that might happen because they were committed on the technology and tools. Now, the fun fact, which is what you guys are looking for, so a fun fact about me as you guys know, that you know, I think we were talking on social media, that I have the unique ability—I think my family does as well, so maybe not unique—I have the unique ability to be able to sleep and not nap, sleep while standing. Okay, so I don’t know whether you are going to be jealous about me or concerned, but that definitely lives in our family, you know. So, that’s the fun fact about me.
So, Sam, we need proof. We need to have your wife make a video and then post it, and I think you may go viral. Yeah, we need to do that, and I remember one story from the childhood where I was really exhausted. I went to my room inside a hotel, and everybody was sort of trying to wake me up. They were making loud noises outside the door, but you know, I would still not wake up. Then they got concerned. Maybe I was under the influence or something. They started pouring water. You know, I still would not wake up. Okay, in the room, and then finally, I don’t know what happened. I woke up, I opened the door, I sat down, and I was like, “Okay, why is everything wet all of a sudden? What’s happening here?” So, that’s how sound my sleep, sorry.
So, I’m gonna infer that means that you can sleep on airplanes as well. Not these days. I guess I’m getting older, but, you know, I could definitely sleep when I was slightly younger. I’ve never been able to sleep on airplanes and admire people that are able to.
So, Sam, my question back to you now: What is your biggest nightmare story with a bad ending? Oh boy, so years and years ago, I was working in paints and coatings, and we had a gallon paint line that we were doing manual labeling on. So, I was tasked to go out and find an automated labeler to get labor savings, and I went with the name brand company you’d all recognize. Thought I was in good shape. Inspect the machine, ordered it, and it came time to go check it out, and I found out that it wasn’t the mainstay part of their business. It was this little outfit they bought out up in the Bronx, New York, so I traveled up there to check the machine out, and it was pretty rough. We got it working enough to say, “Okay, we think it’ll go.” So, we shipped it down to my plant, and it just wouldn’t work there, and you know, I worked on it for a while, had them coming back and forth, working on it, and you know, weeks and weeks and weeks went by. Obviously, we paid big money for this thing, and we were expecting savings we weren’t getting, so my bosses weren’t too happy with me. Just very frustrating, and in the end, we wound up ripping it out and sending it back. There was no fixing it, so what happened? Manual labor continued with the labeling, or did you guys find an alternative? We went out and found an alternative. This time I went to the company before we ordered the machine and made sure we were getting what their promise was, and it all over time worked out in the end, but it was a year of loss savings that we should have had that that first company cost us. A good example of technology doesn’t always work the way we want it to. Too true, yep. I’ve been blessed to work with some really, really good machine automation companies, and that one stands out because I’ve had such good success generally. Yeah.
So, Jeff, question back for you now: What are some ways that manufacturers can automate part of their sales and marketing into a repeatable system and reduce the chance of a salesperson or distributor going way off script? Yeah, so let me tell you a story. All right, so here’s the woe, and then I’ll turn it into a positive here. So, I was brought into a company to meet with the president and some of the top salespeople, and the president kind of gave me the inside scoop of can you talk to the salespeople and just kind of encourage them in certain ways, you know? Anyway, he filled in the gaps, so, you know, I asked the salespeople some of their top people, I said, “Okay, how are you getting leads? How are you communicating them? What’s the process? You know, just kind of give me the 360 here, what’s going on?” And they said, “Well, I mean, one of our kind of top tactics, our top strategies, is we go on LinkedIn, we do a search based on whatever, you know, qualifications. We reach out to those people, and I might say, ‘Hey, my name is Jeff. I’m working with this company. Our products are great, our people are awesome. Here’s my brochure.’ You know, almost like a, ‘Do you want to buy from me?’ And I just kind of, I just kind of paused. I’m like, okay, I mean, how’s that working for you? You know, are you getting a lot of sales? Knowing that they weren’t, you know, that’s why I was in there, and you know, there’s kind of this awkward silence. Well, I mean, you know, it’s kind of hard to quantify them, you know? And it’s like, okay, well, I think one of the reasons why is you know, you’re just kind of doing a, a data dump, a virtual cold call, and nobody responds to that these days, right? So instead of just saying hey, prospect who doesn’t know me or my company or products, do you want my brochure? What if you know we created certain videos? We call them video value bombs, where we answer specific questions, we talk about specific objections that they commonly get, and we almost build a repeatable system that their salespeople can use. That’s it’s kind of approved by management, right? But it also takes into account the specific customizations that maybe some of the top salespeople would deliver, and then on top of that, we can use that, we can leverage that 24/7. Right, so you can put it on your website, your social media. We have a list of like 40 different places that these companies can post and repost and share. You know, all day long. You know, one of my favorites is your email signature line. Right, it’s free marketing. So why not have a little blurb on there about, ‘Hey, check out our latest, you know, quick tip videos on insert problem and how we solve it.’ No sales pitch. You know, it’s just a value add. So, you know, when I proposed that to the president and some of the people in the room, you know, it was like, ‘Oh, that’s actually a strategy, a plan, something that’s repeatable, versus just reaching out, kind of virtual cold calling, being like, ‘Hey, here’s our, here’s a brochure. Buy from us.’ And it just didn’t work. So that was one of the woes that happened, and then how we were able to overcome that.
Jeff, do you find most manufacturers struggle with sales and marketing? They do, and I’ve worked with, you know, some multinational $120 billion, you know, in year, a year in revenue, and, yeah, many do, right? They’re great at their products and the engineering side, the tolerances, some of their SKUs, all of that. And some of their salespeople know their products front and back, but they struggle sometimes with new sales and marketing, right? That’s what my company does. We help with what’s working now, not what worked 20 years ago, when I first started, but what’s working now, like post-Covid or during Covid, whatever. Um, and so, yeah, there’s always opportunities, and that’s one of the reasons why I love working with manufacturing. They love their products and they’re great at it, but I think we can tweak a couple of things to make it more efficient and effective. You know, they’re lean in the facility, but they’re not lean in their marketing and sales.
Sam, question for you: Why is business process design and visualization a key step to avoid financial risks and business catastrophes? Yeah, so one of the things, and the way I like to compare any of your people, process, technology, with your, you know, football field, so if you actually compare this with the football field, you know, on the football field, you sort of need to know what you are doing, otherwise, as we all know, the team would not go anywhere. You have the designated set of responsibility for anybody who sets foot on the field, that we all know. In case of football, in companies, not so much. As we all know, companies are made up of three different things, that is going to be your people, processes, and technology. Now, companies typically do a very good job in finding the roles and responsibilities of people. They’re not too sure, you know, how much they do, about these systems, because in case of systems, also, you need to have the exact architecture defined, and you need to have their roles and responsibilities, and how they are going to be connecting with each other. So now, when you look at the business outcome, when you look at the financial risk, this is all interplay of these three different elements. Now, I’ll tell you one story where you know, because of the coordination, it’s a very sad story, and as you know, I am a podcast host, I get to hear a lot of different interesting stories. Now, just because of the process collaboration, what happened is there was a lot of confusion in terms of who does what, you know, who does the first step, then the next step. So what was happening on this manufacturing floor is they were trying to repair a machine, the person was inside the machine. Now, your, you are going to assume that the next person who is doing anything in that machine is going to have some sort of sequential workflow, controlled by some sort of intelligent system called software, okay, or by some sort of method. In this particular case, these guys sort of didn’t know what they were doing on a football field. So what ended up happening is the other guy who was supposed to be operating the machine, he actually turned on the machine, and what happened is there was a person inside that machine. Can you believe this? Now, we are talking about business disruption. We are talking about real life here, just because of the clarity in your roles and responsibilities, in your processes. If you don’t have that understanding, whether you are talking about the interplay of just people or systems or people and systems, these three things are equally required. Unless you have that, you are going to face a lot of issues, and this we see time after time. In this particular case, you know, this is obviously extreme, these things don’t happen on a daily basis, but you are definitely setting on that risk. So you need to have far better clarity in your people, but make sure you don’t treat your systems as your black box, because that’s where the intelligence is, the way the intelligence is going to be on a football field with the quarterback. So, Sam, earlier today I moderated a panel for the Rapid Ratings conference, and we talked about risk, and your story would have been quite a good extreme example, of about the importance of companies getting risk under control and having systems and processes in place for that. Yep, so Jim, I actually am going to throw you kind of a curveball here and talk a little bit about design process.
So, one of the things that is really important for manufacturers to remember and think about is the actual design process before something actually goes into production. And there can be a lot of challenges and issues with that.
So, I would like to see if you have a story or example that you could share. If you either had a client or a company you were working for that had grief in the design process before actually getting to the manufacturing stage.
Yeah, so one of the stories that we hear all the time on the podcast is going to be the classic disconnect between your engineering department and the operations. You know, they very rarely talk to each other. When you are in the engineering department, any of the changes that you are going to make to your production floor obviously, you know, those are going to be far more expensive. Now, when we look at the classic thread that actually travels in the organization, obviously that’s going to be either bill of material or some form of bill of material. Now, if you look at these companies, if you pay attention to their skew definition – okay, and I see this on a daily basis – there is no consistency between how the engineering department perceives this queue versus how customer service is going to perceive this too, versus how your operations are going to be perceiving this queue. Now, if you really think about it, these people are living in the same organization, but they are speaking different languages. Okay, both or all of them are going to work together when they are going to speak the same language. So, in this particular case, the question that you asked related to if I see any issues in the engineering, obviously, you know, if your skills are not going to be aligned, we see a lot of issues. You know, because whatever engineering is going to produce, the operations are not going to be able to understand that, and because of that, there are going to be a lot of downstream issues which manufacturers typically don’t track and they are going to take significant financial hit. You know, because they should have resolved these things in the engineering phase by improving the collaboration, but you know, it’s very standard that they remain siloed. Thank you, Sam.
Jim, do you have a story or example that you can share about grief in the design process?
Yeah, so I was with the old play when Greek yogurt hit, you know, when Chobani came along out of nowhere, and all of a sudden, nobody wanted regular yogurt anymore. Everyone wanted Greek. So, we were under pressure to get in that business really fast. It became this combination of the design of the product and of the machine, because things were going so crazy. You couldn’t get the standard machinery to make Greek yogurt, and so we were looking for alternatives. We wound up designing our own separate process to get into the market. And along the way, had to come up with different ways to get the protein levels, to get the consistency, the nutritionals that you kind of had to have to compete in the Greek market. And so, it was just this mad scramble of ‘Yeah, we’ve got to get the product right, then we’ve got to get the plant system that’s going to make it, well, and do it in a big hurry.’ And we managed to get it done, but it was a couple of months of absolute craziness.
So, Jim, we have a question that came in from Ernie. Hello, Ernie. Ernie is joining us, I think from Florida today. I think he’s home this week. So, I’ll throw this over to you first and then to Sam to see if you have anything else to add. His question is, ‘How do we make sure risk is included in selecting supplier partners for manufacturers?’
That’s a great question, and you know, you’ve got to think about the different kinds of risks, right? There’s the risk of getting the right machinery, like I was just talking about, delivering on the product that you have to deliver. Look at what’s happening today. There’s also the risk of where you’re getting it from. If you’re single-sourced, is it going to get there in time? Is it going to meet your launch needs or your delivery needs? You know, I love the FMEA process, so failure modes effective and effect analysis, where you just run through early in your process all those risks that you can quantify and come up with backup plans for everything that you identify as a potential risk. That way, at least you’ve got some homework done if the unthinkable happens and you get derailed in your planned efforts, you can go to that backup plan. Sam, anything else you want to add about Ernie’s question?’
Yeah, the only thing I would like to add is, you know, the traditional methods of measuring the risk obviously, they don’t cover us for the risks that we are seeing at this point in time in the market.
So, even if you are, let’s say, going to be covered from multiple suppliers, okay I have a critical component and I am going to have multiple suppliers that are going to be supplying, but they all can have their own risk that they might be sitting on. So, the more visibility that you have in the supply chain, obviously, that is going to be beneficial. We are seeing some of the newer trends, I would say, in the risk category. So, as we all know, the traditional methods of measuring these suppliers was, okay, we are going to go, we are going to go to Hoover’s data, we are going to find, you know, a bunch of metrics from there and then we are going to assess whether the suppliers are credible or not. We all know that, you know, as salespeople, we have tried utilizing that data, but that doesn’t go anywhere. So, we all know the quality of Uber’s data. Now, if you look at, you know, how times have changed from the supply chain risk perspective, there are a lot of different factors. In fact, last week during our happy hour, we were talking about the overall cybersecurity risk. And the cybersecurity risk is not really of the exposed endpoint in your facility; it is also going to be how your suppliers are actually trying their way inside your systems. And now, you know, if you have created a little hole in your ERP and you are actually trying to let them in in your systems, you don’t even know that they have access to your data. So, those could be some of the risks that nobody knows, and the only way you are going to know these things is when you have really, you know, deep clarity, number one, in your supply chain, but most importantly in your systems as well, because that is always going to be the black box for most companies. Yeah, cybersecurity is a real pain. I just had to get a new credit card, and not fun when you have all your electronic payments and everything tied to it, and you have to go cancel, and you forget, and stuff bounces. So, it’s not fun, and dealing with that from a manufacturer’s perspective is a big deal. So, Jeff, you bring a different perspective to our discussion since you actually help manufacturers with sales and marketing. So, what frustrates you most today about working with manufacturers? I’m a pretty positive guy, so I’ll rephrase the question so my tiny brain can think a little better. So, what opportunities do I see? There we go. Now, I mean the opportunities are endless because technology is changing, obviously, the world is changing. So, you know, my specialty is helping companies with their sales and marketing, kind of getting more from less, right? So, I think it’s a lot of, from a marketing side of things, it’s less about how can we. In fact, I have another marketing friend that talks about wee-wee, right? Does your marketing have too much wee-wee on it? Right? Is it all, ‘We do this, we are great at that, we offer this, our great’? You know, or is it customer-centric? So, I think a lot of manufacturers are still talking about how great their people, products, company history is, which is great, but everybody says that, right? So, how can you separate yourself? So, I think it’s a couple of things. It’s telling better stories, being customer-centric, creating content that is customer-focused. I saw a stat the other day. It was like 72 percent of B2B buyers are researching, you know, online before they ever talk to a salesperson. So, does your manufacturing website have content that people can find 24/7 that answers frequently asked questions, that shows setup, safety, installation, teardown, all of those things that they’re already asking, right? No longer can we kind of hide behind, ‘Well, just trust us,’ or ‘You’ll see once you know we ship you the product.’ Right? It’s the information’s out there. So, I think to kind of summarize the opportunities is manufacturers have to be thinking more like the customer than ever before. And I get it. There are distributors and channel partners. I mean, there’s multiple ways to just direct that, so I don’t want to muddy the waters there, but we have to think like our end user or who’s ever taking our products and making the end users’ products. We have to think a little more strategically than we have had to in the past. So, let’s just say I think there’s a lot of manufacturers that could use a website makeover. For instance, I’m walking through and experiencing the shopping experience as a customer and getting to the checkout page and having a field where you have to put in a purchase order. Yeah. Yeah. Yeah. So, yeah, I deal with this all the time, whether it’s an e-commerce site or even just a non-e-commerce site, but again, it’s thinking customer-centric, right? We just revamped an e-commerce site because the platform. I mean, it was maybe five or six years old, which sounds like, ‘Well, that’s not that old,’ but in e-commerce land and technology land, it’s ancient, right? So, we had to rebuild some things to make it more stable and secure. And we talked about, okay, let’s look at Amazon. What are they doing? How can we duplicate some things? Because that’s the gold standard. And so, you know, simple things like adding tracking or a live chat where somebody can interact directly or just some of these. Even like I’ve talked before, can we automate part of the process? Showcasing your products, whether that’s photography or videos, you know, setup, safety, installation, all of that stuff. Make it more accessible 24/7 so that when they are ready to make that purchase, they have your information. They’ve seen that you’re the expert, and they’re ready to buy. So, since Jeff is the optimist here, Jim, I’ll ask you, can you maybe share a train wreck or nightmare story that actually has a happy ending? Okay. Oh boy. So, also in Yoplait, we were launching… You guys have seen the yogurt cups with the overcap with granola in it. We were launching one of those products, like, start, like they have at Starbucks, right, on top, right? And so, we had decided that we were going to farm that out to one of our contract partners, and they were building a new plant. So, they’re like, ‘Yeah, we’ll add space for that in our new plant. We’ll get a line committed to you.’ Everything was going gangbusters, and we got about a month from start ship, and they were going through their initial testing and found out that their systems had been contaminated with yeast, which in the cultured product world is not good. That meant, I mean, literally, I got a call from my contract manager, telling me that. And I said, ‘Okay, so we’re not making this launch,’ and I hung up with him and then I called him back and I said, ‘Okay, so we’re not making the launch. Now, let’s get together and figure out how we’re making the launch.’ So, we got our team together, and it was days and days of finding production capacity to fill yogurt cups. Fortunately, we had the overcaps from a different supplier already on hand because they had a longer shelf life. Finding plants we could plug little lines in to fill the capacity of the big line we had to replace and traveling all over, getting quality checks, making sure everything’s set up right for a food production situation. And somehow, I mean, it involved three different plants that the contract company had available capacity at. We took a pilot plant filler from our lab in Minneapolis and flew it down to our plant in Tennessee and ran that to fill cups. And established a hand assembling and cartoning and palletizing operation in the refrigerated warehouse there in Tennessee. And we made the launch.
To this day, I have no idea how, but we did it, and the coolest thing is, you know, they worked through their problems on the on the line that it was intended for, and we wound up moving production there after a few months, but the thing went so well, we ran that cobbled together system for over a year to help with the demand.
Awesome story! I feel like we need a yogurt plaque or something on your face.
I think so, yeah. Celebrate your big win, absolutely.
So, Sam, we work with a lot of manufacturers and a huge, huge challenge they’ve had are supply chain issues across the board. First, smile manufacturing, last mile, you name it, there’s been a problem. Why do manufacturers require a deeper understanding of their supply chain to avoid business problems?
Okay, so I am going to have a very interesting story here to be able to share, and again that slowly comes from the podcast because I get a lot of interesting stories there. So, one of the things that a lot of my manufacturing friends might be able to relate to is this trend called just in time. Everybody wants to go just in time because they are trying to save money. It makes sense; you know they are going to have a bunch of smart MBAs, they are going to analyze the process and then they are going to figure out, ‘We don’t need any of the inventory.’ Okay, just move out every inventory from the warehouse, we don’t need anything. One of these days with one of the manufacturers, what happened is they were trying to run the plant, but all of a sudden a critical component called gear breaks down. Now they were thinking it’s a piece of gear, okay, I can buy from anywhere, what’s the big deal? Okay, they go and call the supplier. There aren’t a lot of gear manufacturers that might be able to create gear. Okay, so in this particular case, the plant was shut down for two weeks. Now these guys were trying to negotiate with the gear manufacturer, ‘Hey buddy, can you produce this probably in two days because we are completely down and we don’t have a way to resume the operations?’ Now, my buddy says that, you know, this is what it takes, I have no way to produce this before two weeks. So now what I am trying to say is just because everybody is trying to do just in time, just in time, they make sense in a lot of different cases, but it is not going to be in every case. So having the deeper understanding of your supply chain, how your supply chain affects each of the operation, and again that goes to the fundamentals of how your skills are structured, how they progress through the business operations, how they are going to affect your life as you are interacting with all of those, unless you have that deeper understanding, and that deeper understanding resides in the classic black box called either the ERP system, PDP system, these are the systems that you are thinking, you know what, I’ve got my IT guys, they know how to do this, they’ll figure it out. No, they know how to code, they don’t know how to run the business. If you want to run the business, you have to have the deeper understanding of your supply chain, and that is only possible when you have that documented understanding on a piece of paper that is transferring from one employee to the next. They have deep understanding in their head, and you know, along with the system understanding, plus the process understanding that they are living on a daily basis.
So, Jim, a lot of talk has been happening about last mile, so getting manufacturers’ products to the end customer or to the distributor, but I actually argue that the first mile is even more important. If you can’t get your parts or products or material, the last mile doesn’t matter. Do you have a train wreck or nightmare story that you can share that’s related to the first mile, where you missed a part and your production line is shut down for two weeks, type of story?
So actually, I’m going to go back to that same story I just told, because we were really lucky in that regard. So we had decided early on that we would use standard size yogurt cups to design this product around. For various reasons, they’re easier to get, cheaper, and everything. When we ran into our problems, if we had gone with what our marketers wanted to do and had a unique shape or size of cup, we would have been dead. Because what we wound up doing was going out to these other locations that had similar fillers that could fill that standard size cup. You know, our pilot plant machine filled standard size cups, and so that’s something, you know, going back to that risk question, to think about is, what is the added risk of doing something different? You know, there’s obvious benefits, too. The marketers wanted it for a reason. It stands out on the shelf, it differentiates itself. But boy oh boy, you know, I just think about it was a nightmare enough if we had a custom design, there would have been nowhere we could go, and that would have been a month at least late getting that product on the shelf, which, as anyone in the CPG world knows, that would be a disaster.
Jeff, worst marketing story you’ve seen or experienced for a manufacturer, a total marketing fail?
Yeah, it’s a big deal but kind of a simple thing, right? So I was working with this company probably last 10 years and early on, as we were doing an audit for their SEO for their website for their marketing, we found that the terms used on their website were terms that were kind of invented internally but nobody really knew what they meant externally, right? So if you’re doing an SEO search or audit, these terms aren’t coming up. If you’re creating content or doing anything on marketing, these terms meant nothing, but here they are, front and center on the website and the menu and brochures and marketing and everything like that. So thankfully, somewhat of a simple fix, right? We changed their website, we changed some of their content, we just changed some of their messaging, and we’re able to turn that around. But it was like this light bulb moment, you know, where everybody was like, ‘Oh crap, how long has this been happening?’ You know, like this has been a part of our marketing for so long, they didn’t even know how it really started or who kind of invented these terms that weren’t industry standard. And it wasn’t like they were trying to create a new brand or make it well known, it was just kind of like somebody picked it internally and went with it. So we changed all that, we revamped it, we even updated their online RFG to make it more simple and easy, you know, customer-centric and help the user experience. So, yeah, kind of a simple thing, but it made a big difference, and now we’re just crushing it on the SEO side with some of the content marketing we’re doing because we’re using terms that people are using and searching every day.
To close out our conversation, I’m going to ask each of you to share the biggest challenge that you think manufacturers face in 2022. So, Jim, I’ll start with you.
I think the biggest challenge ties with the biggest opportunity, and that is the world has gone nuts. We sent a bunch of production overseas, and now, you know, going back to Sam’s point about just in time, it’s harder to get just in time when it’s coming across an ocean from a different country. So the biggest challenge is how do we grab this opportunity? How do American manufacturers position themselves where they solve all these challenges for their end product makers, and they do it in a way that’s competitive, and that obviously we struggle because we have higher priced labor, we have tighter safety and environmental regulations, so man, figure it out. You know, whether it’s automation or new work processes or what, strike while the iron’s hot. This could be a golden year for manufacturing.
Sam, biggest challenge?
Okay, the biggest challenge that I personally see in my experience is going to be the walls that we have created inside the manufacturing organization. So that is going to be the information silos that most companies, most manufacturers are living with. So you know what needs to happen is really break those information silos. No, this is not the inventory problem, no, this is not the supply chain problem, no, this is not the e-commerce problem, no, this is not the finance problem. It’s everybody’s problem, guys. So the more you share, the more you collaborate, the more you explain that okay, what is happening on the other side of the table, whatever actions you are going to do here, you know, that’s going to impact somebody else. So if you can really break that down and invite everybody on the same table at least from the knowledge sharing perspective, that’s where the real opportunities lie, that’s where you are going to have far more solutions from your supply chain risk perspective for whichever problems you might be facing at this point of time. Thank you.
Jeff, biggest challenge?
Yeah, and I’m going to take it, of course, from the sales and marketing side. That’s my expertise. You know, I’m not making the parts, I’m helping market and sell them. I think it’s how to get more out of less, right? And, Jim, you kind of hit on this, and you know, so it’s yeah, we know that finding good people is hard, so how do we leverage the power of technology to help improve our marketing and sales, do it more efficiently, more effectively, hopefully spend less to get more? Those are huge challenges, but there’s tremendous opportunities because so many manufacturers are still stuck 10, 20 plus years behind, and they’re not innovating on their sales and marketing like they are on other parts of their facility and their product deliveries. Awesome. Well, I want to thank Jim, Jeff, and Sam for being with me today. Feel free to reach out to any of us on LinkedIn if you’d like to talk more about manufacturing woes or some of the crazy things that we’ve all lived through. Our next Manufacturing Woes show will be March 8th at 1 Eastern Time. If you can’t join live, we always do record the shows and share them after. And with that, I’m going to wish everyone a wonderful afternoon.