Transcript: Manufacturing Supply Chain Woes – Jan. 2022

Manufacturing Supply Chain Woes
January 2022

Featured Panelists:
Curt Anderson, Crissa Klein, Angela Thurman and Stephanie Shrader

Welcome to our manufacturing show. This is a show I host on 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 it ain’t all pretty, believe me. Our show aims to bring experts together to share their manufacturing train wrecks, nightmares, meltdowns, and also reveal the wisdom gained from their mistakes and how they have learned to refine their skills and add more value to their companies.

I’m Sarah Scudder, CMO at SourceDay, and our show host. Our platform integrates with ERP systems for manufacturing and distribution companies, so my team and I have lived through the good, the bad, and the ugly. The founders of my company spent years in manufacturing before deciding to build our platform, which actually helps manufacturers automate purchase order changes.

I am joined by Stephanie, Curt, Crissa, and Angela today. They are going to be our panelists, and they have extensive manufacturing experience. So I’ve asked them to come prepared to share some of their nightmare stories. I’m also excited to announce our new show sponsor, Rapid Ratings. I have been friends with Eric and his team for several years, and they do a lot of work in the manufacturing space. So, Eric, would love to have you do a quick intro and tell us a little bit about yourself and then maybe specifically something that you’re doing that’s innovative and might be useful to people in the manufacturing space.

Absolutely, yeah, thanks, Sarah. Appreciate you having me join, and we’re excited to be a sponsor this year of Supply Chain Bow. I’m very excited to hear everything that’s happening. Of course, we know, you know, supply chains in the news all the time with all the disruptions occurring and lack of goods getting on the shelves and things like that. But so Rapid Ratings, we’re a predictive analytic system in which our clients gain insights into the financial health of their suppliers, whether they’re public or if they’re a private company that they’re dealing with anywhere in the world. So we’ve done a lot of correlation studies where a company that’s weak financially tends to have more problems, right? And so companies that are weak financially are more likely to ship a defective product, you know, more than two times, and also two and a half times likely to ship late. So we’ve been looking at a lot of the data recently, and you know, you really do need to continue to look under the hood with your suppliers. The other trend we’ve noticed is that in the short term, in this part of the pandemic, companies have had access, easy access, to capital liquidity. So in the short term, they might pop up in certain industries in terms of their financial health, but their liabilities and debt are being kicked down, kick the can down the road, so to speak. And so the core health, the underlying core health, still doesn’t look as good farther out that you go. So another reason to continue to look under the hood, so you don’t get caught up, you know, with those issues in your supply chain and manufacturing.

Awesome, Eric. Where are you joining us from today? It looks like you’ve got some weather there on the East Coast.

Yeah, I’m in Jersey City, and so I live in Connecticut, but I’m in the New Jersey City area for our lovely sales training kickoff this week. So it’s always fun to be back in person in New York, New Jersey area. So thank you. A little cold, though. Zero degrees with the windchill, 18 degrees without it. So I’d rather be in Austin or back in Miami or something like that.

Well, thank you so much for being with us today, Eric. Excited to partner with your team for the show. Really love the work you guys are doing in the manufacturing space.

Thank you. Enjoy today’s panel.

Thank you. Alrighty, so to kick off our conversation, would like to have those of you who are with us put in the comments. Tell us where in the world you are joining us from, and then we’d also like you to share a word or phrase that describes your craziest manufacturing experience. So where are you joining us from? Word or phrase that describes something really, really crazy that you’ve lived through in the industry. And don’t be shy. You can engage in the comments throughout the entire show. I’ll be sharing the comments, and then we also would love questions. So our panelists are not shy, so feel free to pop questions in any time, and we’ll make sure that those are addressed.

So I’m going to kick off today by having Angela introduce herself, and then Angela, I’d like you to start off by telling me how you got into manufacturing. What was your story?

Thanks, Sarah. Yeah, I’d be happy to. So my name is Angela Thurman, and I am the principal director for Thurman & Co, a consulting, a project management consulting firm in Houston. I have an extensive background in project management, primarily for regulated industries like aerospace and telecommunications. I’m an engineer, and I started my career at NASA. It was NASA Lewis then, but it’s now known as NASA Glenn in Cleveland, Ohio. So I worked directly with the manufacturers of complex electrical devices. I was working on the power management systems for the space station at that time. But prior to joining NASA, I had an interim period after graduation but before I could start work at NASA, where I had a summer, and I took an internship with a local company in northeast Oklahoma called Eagle Pitcher.

And this was a very interesting company. Eagle Pitcher was founded in the 1840s as the Eagle White Lead Company, and their paint. I am coming to you from Charlotte, North Carolina, so way less snow, much warmer, but I am a former New Yorker, so I can sympathize. My manufacturing career has spanned numerous sectors. I actually started as a management consultant for 10 years, working on strategy and operations consulting for everything from consumer goods to apparel to high-tech manufacturing and beyond. And in my current role, I am the SAP and CEO of an apparel sourcing and production agency where, sorry Curt, much of our production is overseas. This is probably the most stressful three weeks of the year for me as we approach Lunar New Year and try to get anything and everything to ship, which in the current supply chain world, getting anything to ship at the moment and actually show up at a distribution center is impossible.

But I think to answer your question, Sarah, going back to some of my consulting days, I worked with a lot of food and beverage manufacturers and process chemical manufacturers where I really started to see and start to gain some of my early interest in sustainability and manufacturing, where I saw the challenges of wastewater disposal and how a lot of the dyeing, in particular, was impacting the environment. So that changed a lot of how I was looking at products I was using in my everyday life. And probably for the funny story out of that is in food and beverage, as I saw more and more clients and learned more and more about some of the raw materials that were going into the products and or manufacturing processes, I cut a lot of things out of my diet. I do not do jello whatsoever anymore. So I had minor surgery and they said you can move on from clear liquids and broth to jello, and I said not a chance. I will keep sticking with the clear broth and water. So it has definitely impacted as well what I eat. And in my all-male house, the opposite of Curt’s, my kids are tired of hearing why mom does not buy or eat or cook certain foods anymore.

So, Crissa, we had a question come in from Ernie Hernandez. Hello, Ernie. Ernie is joining us from Florida, a dear friend of mine, a rock star in procurement. So, I’ll ask you this question first, and then Stephanie, Angela, or Curt, if you have anything else to add. His question is, how are you handling the crisis in ocean freight with your critical BOM items being delayed?

It’s a great question. Hi, Ernie. Good to talk to you again this week. I think from my case, a lot of my raw materials are overseas. So, it’s not as much a BOM item being delayed. It’s more my finished goods being delayed. But even within Asia itself, we are finding that we’re lacking ocean freight space to move goods. And ending up having, if it’s really critical and it’s going to miss our timeline, to air the goods, and sadly, the air cargo space is also super limited, super expensive, and Omicron is impacting a lot of the airlines overseas with their cargo space. Cathay Pacific, as well as some of the China cargo lines, actually shut down for a full week of air cargo the other week. So, it’s been very painful. But in desperate situations, it’s either been substitute goods or they are the goods.

Curt, Stephanie, anything else to add to that?

We’re struggling in the same way. I mean, ocean freight, the cost alone, and you don’t even have a choice but to do this, but the cost alone, ocean freight four times as high as it was a year ago. Air freight, if you can get availability, where we looked at air freight before with a just-in-time three, four, five-day window, now if you can get a plane booked within two weeks, and then get it, I mean, you could be looking at two to three weeks on what we call a “I gotta have it right this minute” air freight situation. So, it is crazy. And what I found is that my job has become—it is supply chain, it is me in the manufacturing realm—but it has become more of a really jump-in problem solver. Anywhere you touch something, you are jumping in and helping fix it, solve it, find it, get it, buy it, and figure out a way to get it here. So, our jobs have really shifted. Our responsibilities, I guess I would say, have really shifted.

Alright, Ernie, thank you for that question. And again, anyone who’s joining us today, feel free to post questions throughout, so we can ask our panelists. They have really interesting, unique backgrounds, all in the manufacturing space. So, Steph, welcome to the show. Excited to have you here with us. You started a new job, new company, moved your whole life to the West Coast. So, introduce yourself, tell us a little bit about who you are, and I’m excited to see the pink cast is no longer. We have we do have a little bit of a scar going on, but if I go this way, yes, I’m good, I’m good. I’ve had two. I guess a fun fact, random fact would be the move that I can tell you about. A fun fact would be that as soon as I moved to Las Vegas within a matter of two weeks, I was—I’m from Nashville—so I was in a boot store trying on boots. And in Vegas, like everything else, it’s a little bit glitzy, and they had a real pretty floor. Instead of a carpeted kind of floor, put a sock on, went to pull up the boot, and boom, down I went. So, broke my wrist.

And so I am just now at the end of December, actually, out of casts, out of what feels like a broken, wounded person, you know, where you can’t. It was my right hand, so I started a new job, told the boss two weeks into it, “I can’t type.” So, it’s been interesting. But I did, uh, a fun fact, I did give up everything that was my career life in Nashville, Tennessee. I had been with the same company almost 15 years and decided that my career was not going in the path that I wanted it to go as quickly as I wanted it to go. So, I had a random opportunity to move to Las Vegas, of all places. And so I took the leap, sold everything I had—you know, what my kids didn’t want, I’ve got two kids back in Nashville—but sold everything else and said, “I’m going to Vegas.” So, I am in Vegas. It can get a little lonely now that I’ve been here six months at times. The house, you know, the empty house, is a little… a little quiet. But I’ve made a lot of friends and, as we all know, in the serious aspect of things, when you’re in any type of manufacturing that includes global, a global-type portfolio, there is no really being bored. So, I may be lonely in my quiet house because I don’t have my kids running in and out and my normal friends, but there is no end to the amount of work that we have. To the point that you can easily become burned out or a workaholic, which is a total different show, based on what’s going on now. It was bad before, but now, through the COVID and hopefully coming out of some of it or learning how to adjust to it, the work is never-ending. It’s a whole different structure of work.

That’s me. So, thank you, Steph. So, my question for you is manufacturing needs to be flexible in order to roll with the times. Things just happen, and you can’t plan and predict everything. During the COVID times, name one manufacturing change that should have been made at one of the companies you worked at that wasn’t, and then how did that turn into a nightmare or train wreck?

Okay. Take myself off mute here. So, at the company that I am at right now, which I’ve come into Vegas in the gaming industry—which, go figure, huh?—but I’ve got a great gig in the gaming industry, and my actual title is Senior Director of Strategic Sourcing. But, again, we touch on all of the supply chain, and my background is diverse within logistics, planning, and everything that touches this. I’ve always worked in a setting that I’ve been really hand-in-hand with our manufacturing and operations groups.

One of the biggest issues that I can see right now, and I’ll speak to our times that we’re in right now—normally, it’s not a major crisis if you are not working within your manufacturing group, whoever, whatever department does it, to update your system, your ERP system. We all know that ERP systems kind of dictate our MRP plan and what we’re going to buy and when we need it and what safety stock we’re going to keep. But where we have, I would say, missed the boat in a way or found an opportunity to understand things better, is if you don’t go in—such a small thing—but if you don’t go in and change or update your lead times, COVID messed up our whole lead time scheme. So, what you knew to be 20 weeks on a part coming in from overseas or even down the street, everything was changing. It was changing so rapidly that it was almost an oversight that who has time to even think about what to put in the system, let alone, you know, physically go in and manually update all of these parts? Just forget about it. Let’s just order, get it in, put it on the boat, put it in the air, gotta have those parts.

But what we’ve come to find out is by not changing and updating the parameters in our ERP system, and specifically lead times. We have really missed the boat, per se, because we’re not given a nut, we’re not giving ourselves enough time to be able to plan, and we’re reactive instead of proactive. And it has just caused the biggest, biggest debacle that you can imagine. So what we’ve decided is you have—and it’s almost that fear of, well, we don’t know what the lead time is, so why even mess with it, just get the parts now? Come together as a team internally and decide, what are we going to make our lead time? If it’s 20 weeks, great, we’re going to go with 20 weeks. But now we know that it could be 24, 40, 60, 52 weeks on electric parts that we are buying for PCBAs. So when you get to that point, you’ve got to come to some consensus on what are we going to use? What’s the longest lead time, maybe, that we put in? Just come up with a plan and take some action instead of taking no action, thinking, well, it’ll get better in a couple of months, because two years into it, it hasn’t gotten better, and we’re still in that, “Oh, we’re going to have the part in 20 weeks.” Well, we’ve known now for seven months it’s really about 42 weeks. So we’re not placing orders in time and not therefore getting the orders in and resulting back to an air freight position.

So, we’ve had to really look at some of those small little things that you would overlook because everybody’s busy, we’re all reactive now, and you would just say, “Forget updating the system, we’ll come back and do that later. We don’t know what it is anyway.” This vendor changes today from 20 weeks to now it’s 22 weeks. We can’t be doing this all the time. We don’t have the resources to update everything all the time. You better find time to at least come together and make a consensus on, “Here’s our lead time, here’s our safety stock.” Now based on—nobody runs just in time anymore. If you’re running just in time, I want to come work for you and figure out what business you’re in that can do that. So that’s what I would say. Those little things that you overlook can cause some of your biggest dilemmas.

And I would say, looking at technology so you can automate some of those little things that, “Oh, an email’s missed,” and it’s, uh, someone posted in the comment, a 10-part shut down a production line for two weeks, right? If that miss hadn’t happened and that had been automated by technology, how much money would the company have saved? So looking at efficiencies and how you can do more with fewer resources, I think, is really important.

Crissa, we had a question come in from Janet Miller, and I wanted to see if this is something that you could answer. Wanting information on paper shortages, or Curt or Angela, any insight on the paper shortage situation?

All right, Janet, you struck out with our panel. We are not paper experts here today. Keep coming back to us; we’ll try to tackle another question.

All right, so Angela, the next question I have for you is, um, talk about a time when a supplier’s decisions impacted a manufacturing line that you were actually involved with.

Yes, yes, I have a perfect example. So, I’m thinking about a supplier that made the decision to relocate their dock, and that would lean out their manufacturing line. And on the surface, that sounds like a great idea. But what happened was they failed to follow the process, the notification process, with the company that I worked for at the time. And ultimately, it just created havoc. Because think about what happens when you’ve got deliveries to the dock and there’s no dock, because what they actually did was to shut down their existing dock while they were building a new one.

And they redirected all deliveries to the local UPS store. So, the company that I worked for shipped parts—electronic, complex electronic devices—which were in the aerospace industry, so this is very highly regulated. You have to keep track of the chain of where the products are physically located. And so, to have all of our products that were sent back for repairs redirected to the local UPS store was not a good thing. And so, in the aerospace industry, it’s typical that when an airline returns a part for repair, there’s generally an agreement about how long the turnaround time for this repair will be. Generally, it’s somewhere between 10 and 15 days.

So, when our parts were redirected, that introduced a delay in getting those parts to the repair station. For one, we lost the traceability for where those parts were. And sure, there was somebody at the UPS store, I’m sure, who signed for their delivery, but our supplier was making like a daily or maybe twice-a-day run to the UPS store to get all the parts from all their customers, and then bringing them back and inducting them into the repair shop and so forth. So, instead of having that immediate induction into the repair station, there was a delay.

And it was awful. And what happens in aerospace when you don’t meet your customers’ turnaround time, penalties are imposed, and you also get penalized for failure to meet your median time to turn for reliability and all of this sort of thing. And it just snowballed. And so, because of the supplier’s good intentions, then the decision that they made, we just had a terrible time. And this was across multiple parts.

So, I think maybe I froze up there, sorry. We can still hear you, okay, thank you. Your train-wreck part story. So, we’ve got a few questions that have come in from the audience. Curt, I’m going to see if this is one that you would be comfortable making since you do a lot in the e-commerce space. So, Nikki’s question is, any thoughts on how online marketplaces can help with transparency, finding new suppliers, in-stock products, substitutions, etc.?

Absolutely, I’d be happy to. So, Nikki, welcome, happy Tuesday, happy new year. So, awesome question. Anyone that’s willing to listen, Sarah, I am so bullish on marketplaces for small manufacturers. And my preach, my ideal clients, a lot of them are custom manufacturers where they’re like, you know, “Hey, we don’t have a proprietary product or a finished good.” So, I’m throwing more of my marketing hat and then I’ll hit Nikki’s question. From a marketing standpoint, if you have a finished good, proprietary product, boy, I couldn’t encourage you enough to be on—you know, here’s a scary stat. So, there’s a—I have a nice deep bench of other subject matter experts with our marketing team, if you will. Brian Beck, he’s out of LA, wrote a book called “Billion Dollar B2B E-commerce,” and he is phenomenal. Strongly encourage that book, connect with Brian on LinkedIn. He’s speaking for us at Temple University this month, and he is just phenomenal. And he should share some scary stats. Seventy percent of all product searches start on Amazon now.

We could say, “Hey, that’s socks and consumer goods and our kids and…” No, because the buyers that we’re buying at home online are now going to work, or if they’re working remote, where are they going to buy from where they’re comfortable? They are on Amazon. Niche marketplaces, Digikey, Zoro. I’m very—I do a lot of work, collaboration with Alibaba, is now pushing American companies. So that’s a great place, especially for custom manufacturers.

So, for Nikki’s question, man, from your keyword strategy, if I throw in my keyword, you know, hat, if you will—you know, we, when we do our training workshops, we show clients who are dominating search pages, where they’re owning that whole page. Not just with their own company, but here’s their listing on Amazon, here’s our listing on Walmart, here’s our listing on Zoro, here’s our listing on Digikey. And so you can own those niche keywords by partnering and aligning yourself with those marketplaces. Therefore, that’s going to give you a better chance of finding sources and maybe help ease that pain with the supply chain challenges that we’re facing.

So that’s my answer there. Awesome, thank you Curt. Crissa, a question came in from Marvin, and then I’ll see if Steph has anything to add to this one. Any thoughts on maintaining a lean inventory, given shipping woes and all the challenges involved with the supply chain this year?”

That’s a really great question, and it’s super challenging at the moment to not panic, by which I think is tends to be what’s happening at the moment. That we’ve all gotten caught short where demand was really low at the start of the pandemic, so we cut our inventory substantially and then found that demand increased well more than we expected and didn’t have inventory, didn’t have materials, and we’re running at about twice the inventory holding that we were pre-pandemic because lead times are taking so long. So we’ve factored in, and like Stephanie was saying, we’ve adjusted our lead times in the system where I’m seeing two to three times as long for raw materials to come in. So we’ve adjusted to hold more raw materials, more inventory, to try and make up for that. And there is still a gap in there that we’re afraid, I’m afraid at least personally, to make that decision that we should be holding excess. But trying to balance it so that we’re not in trouble, and some of the materials I work with do expire, they do have a shelf life, so trying to balance that out. But definitely, we’re holding more inventory than we would previously.

Stephanie, anything you want to add to respond to Marvin’s question?

Exactly, I mean exactly the same as what Crissa had just said. We have taken a proactive look and decided to hold more inventory. We try not to hold it in end-of-life, you know, gaming equipment or anything that would be something that would go obsolete that we couldn’t get rid of. However, on new upcoming products, anything that’s in an existing life that has several years left, where we have gone ahead and said we are going to hold more inventory at this time. So we’re not pulling back. We’re not doing just-in-time anymore for an industry like ours where we’re buying from overseas, some parts, not everything, but some. I don’t know how you can do a JIT system anymore. So we are, we’re definitely going in the opposite way of more inventory in the critical long lead time parts.

And then Stephanie, Crissa had a question about digital solutions using to get suppliers to keep things updated, so you’re not manually doing it.

Yeah, I can take that. So Crissa, I love the question, actually, because we at the company that I came from, we struggled with this. So, and depending on depending on what different platforms you use, we actually—I’m going to give Sarah kind of a shout out here because we used SourceDay. And I knew Sarah before she took this job, but we actually had purchased the software that the company that she has now gone to work for had. And it worked with our—we had a unique ERP system, Visual and Infor product that most people don’t use, and their software linked with our system, as it does with Oracle NetSuite and many others. But it was really great.

And I, in a way, I hate that I left that company before I got totally ingrained in SourceDay and what it could do for us because we were seeing so many positive things with it. But one of the things was it allowed you to go in and make some changes on different parts. Not as much per se on the, well, it did. It allowed you to do some different PO changes and lead time acknowledgments and things that helped. So when I would put through a PO on a supplier, they could come back and tell me in real time, as they’re looking at it, ‘No, you’ve got down here that you want this to be delivered by x time. It’s not going to happen.’ They would come back, propose a new date. They could also—I mean, it’s kind of fabulous because they could propose not only a lead time change that would go real time and talk to our system to update. It would not update what we had in the ERP part maintenance structure, but it would update it on that PO, which kind of keyed us into we need to go in and make a change in our system permanently if this is not a one-time deal. But they would send us back, ‘The pricing isn’t accurate,’ or ‘The pricing’s changed.’ And right now, to have that kind of visibility, real time, where you’re kind of going through a portal with your supplier would be fabulous.

Because the company that I’m at, if we have that, we’re not utilizing it to the fullest. And I don’t believe we have access to as deep a program as what Sarah’s company had. But we’re constantly back into that email chain, not gonna ship in time, now we have to email again. ‘Okay, well, is the pricing okay on these two?’ ‘Well, was it okay on this fourth one?’ ‘Well, hold on, let me check.’ Two days, and you have to remember to go back and follow up. And SourceDay really, really helped us. So if it’s not SourceDay, I’m sure there’s other things out there, but we really took use of SourceDay, and I’m actually looking at it for the company that I’m with now. So we’ll see.

I promise that was not a planted—no, no, no, no, no. No, it just so happens, and Sarah, like I said, Sarah and I knew each other—year, a year or so before her SourceDay, because when she told me she was working for SourceDay, I was like, ‘How many of them are there?’ And then I realized what it was. It was like, ‘What a cool and small world.’ But it’s a great, great product.

When Stephanie was speaking, it reminds me of death by email. And I think about buyers that get thousands of emails every day, and at some point, it becomes—it’s not manageable, and you know you’re going to miss something. So if death by email is what you’re experiencing, I highly recommend looking at technology or other ways to automate some of the work that you’re doing.

So, Curt, I have a question for you about how manufacturers can stop being the best-kept secret.

Boy, that’s a great question. Throwing, jeez, throwing a plug in my book. Thank you, Sarah. So, you know, man, this program is so good. Stephanie, Crissa, Angela, you guys are just like blowing my mind with these answers. So, great questions, guys. Thank you for joining us today. Awesome answers. What a privilege. So stop being a best-kept secret. So one thing is you know, just getting out there. And what I was talking with you guys before we went live, so I had the honor, privilege. I interviewed Carrie Smith, the founder of Big Ass Fans. Sorry, I didn’t mean to curse, but he’s the founder of Big Ass Fans. We just interviewed him on Friday. We do a weekly podcast. Kris Harrington and Jack Buglino were there, and he does an amazing job. What an incredible success story. He built took like a commodity, and uncommoditized—I don’t know if that’s a word, I’m going with it if it isn’t—uncommoditized a commodity, a fan, and made it fun, made it snarky. He and he talked about, know your customer, he spoke the language to his customer.

So my advice on how to stop being the best-kept secret, as manufacturers, because you guys are so innovative, you are creative, you are making amazing incredible products. Challenges, we’ve relied on trade shows and sales reps for, you know, 100 years. So this whole COVID thing comes along, took away our trade shows, grounded our sales reps, now we have to get into the digital game. Do exactly what Sarah’s doing. Bring, you know, Sarah does an amazing job building a community, getting the message out there, educate, educate. Kristina Harrington at Gen Alpha does an amazing job, you know, putting out content, articles, videos. Educate your customer. And John Buglino, I’m going to give a shout-out to John, who’s with us today. He calls it hunt the relationship. Don’t hunt for the sale, hunt the relationship. John, God bless you, brother. I love that you said that. So that’s how you stop being the best-kept secret.

Thank you, Curt. You have such good energy I feel like I could listen to you speak all day.

So Crissa, I want to talk a little bit now about forecasting and planning, which has been kind of a train wreck and really hard to manage the last two years, but very important.

So I’d like to have you talk about a time when you realized the importance of forecasting and planning in the manufacturing process.

That’s a great question. I think at the moment, forecast and plan is hope and pray that something sticks to that. I keep wondering when all the machine learning tools and all the other tools that we’re using for forecasting today will start to smooth out the Covid blip, as I call it, but I don’t think we’re there yet. I’m not sure where out of the Covid blip yet.

Hopefully, bicycle manufacturers are not continuing to produce at the level that everyone was at when the demand level that they were at when, um, everyone was in lockdown and had nothing else to do.

But I think a story from my consulting days. I went to work with a major tobacco manufacturer, to remain unnamed, and unbeknownst to us, cigarettes are a perishable product, and we were looking at inventory levels and destruction levels. There was a particular brand and a particular flavor in that brand that was being significantly overproduced in comparison to their forecast.

After x number of months, it was being destroyed. We looked at it and said, “This doesn’t gel with the production plan whatsoever. Where is all of this production coming from?”

We sat down with their production team and said, “Here’s the production forecast, here’s the demand that we’re seeing. It hasn’t significantly changed. Why are you making so much? It’s being destroyed at such an astronomical rate.”

And they said, “Oh, we really don’t like to change the machines over, so we just run until it’s a convenient stop time. We don’t run to order.”

Despite having a nice discussion about well, this is really how the process is supposed to run; this is why we have forecasting; this is why we have a production plan; they were a heavily unionized shop and they were not really interested to hear what I had to say.

It took a third meeting, and by my third meeting, I said, “I need a different approach; these guys are tuning me out. They have no interest to run to order whatsoever.”

So I made them a bet; there was really nothing else I could find that was going to convince them to try it my way. So I came with a hundred dollar bill; I put it down in the middle of the conference table and said, “Let’s just try it one way, my way, for one week. You change over when the production plan says you need to change over. If my way is more efficient and the destruction rate can be significantly reduced, you get a hundred, and I will buy you all donuts.”

That got their attention; they said, “What do we get if we win?”

I said, “If you win, I will not come back. I will not bother you again to run to order; you will not have to meet with me again. I will go to the executive board and tell them that it’s just not happening in this area.”

So, lo and behold, my way did win out; running to order was significantly more efficient. Thank you, Curt, and I still gave them a hundred bucks and bought them all donuts, and we parted on good terms that they were going to run to order and have a more efficient forecasting and production planning process. Who knew a hundred dollars could do so much? I think it was really the donuts, but a sugar high.

Thank you for sharing that story; I always feel like I learned so much from stories for somebody just talking or preaching about something, so thank you for that.

Stephanie, to continue on talking about the whole this whole conversation around process, do you think it’s necessary to have processes in place for all parts of a business, or can some areas in manufacturing work without processes?

So I think processes, I think we all know I think it’s obvious that processes are important. I believe you have to have them in place to be effective and efficient and to know what works, what doesn’t work, and I’ve been with companies. I think I’ve hit the jackpot because almost all the companies that I’ve been with have had no processes. Which has made the job even more challenging. So I say that sarcastically that I hit the jackpot because it’d be great to come in and be handed a process book that you can just read, go in and know what do I do in my job, how do I do these things.

The company that I’m at now, which this is a little bit of a unique spin, they have processes, but the processes I would say are overengineered, are a little bit too more or more detailed, or there are departments that are kind of and we’re working to make this better; we’re under new management, and so this will all kind of go to the wayside as we try to combine forces and become a real united global company, but you find some silos still, and so you have processes in these departments that in order to, for instance, I saw something in the comments about getting a purchase order out takes too long; when I first came here, it took me four and a half weeks, and I could kid you not; it took me four and a half weeks to get an expensed PO out the door. And it was basically for a sample of something that was desperately needed, a prototype, because I didn’t know; I didn’t know the process. The process lay with a different department, not my department, so I had to find the person in that department, find this process, and it isn’t something where we all have the time to sit down and let me take you Angela, and I’m going to sit with you and train you on how we do this today. It’s basically, “Here’s your process; let me know if you need anything, you know,” and so you go down and you try to check all these boxes going through this process, and then you realize two weeks later, because we are fairly automated where I’m working, that a message came through that I thought was just junk that really was saying you didn’t click a couple buttons in the process, so it can get to be something that, in my case, I found as a hindrance. There does need to be a process; it needs to be understood by everyone; it needs to be simple. It needs to be to where if I don’t understand it, you also have the person to go back to to get some updates, some information, some help, so that you can move forward. So yeah, I think I think my answer to be more concise would be yes, you have to have processes. Don’t overengineer and make the processes so difficult or so separate department demanding where everybody has their own ways, and it’s not all consistent, to where it makes it really difficult to follow a process, and then you almost start your own process, and then we have multiple processes out there by people; it comes back to ease of use in almost everything we do; communication and ease of use.

Angela, tell me about a time or tell me about the craziest thing you ever found during a supplier assessment. I think we might need to brace ourselves.

So, in my role with Collins Aerospace, I was a subject matter expert on supplier capability assessments, and I would lead teams at supplier sites to assess supply chain risk across a number of different aspects: financial risk, the QMS system, engineering, and so forth.

And there were numerous times where we would find some of the most interesting things.

But I would say that there was one supplier, um, actually, it was a potential supplier, so we were doing an assessment of a a supplier to determine whether or not to bring them in for a government project, actually.

And so we went on site; they actually had multiple facilities that we had to evaluate. And when we went to the um engineering facility, um, it was it was a small team; it was a fairly small team, but they were all very technical; they were experts in their field, and they were some of the most, oh my gosh, it was just crazy, crazy stuff, and they were basically building a prototype, so it was like a lab environment. And when our team got there, I was with, you know, I had an engineer and a production expert, a subject matter expert with me, and some and some other team members, and I think that we were all appalled, in our various areas of expertise, from the various things that we found.

When we asked about um, i.t security, for example, um, we said, ‘You know, how are you securing all of the data because this is a, this is a government project, and it has to be you know, highly secure.’ And they said, ‘Oh, well, we have um i, you know, I asked like, do you back this up to a third-party secure secure environment like Iron Mountain or something like that, and they said, ‘Oh no, we have a dedicated server in our server room for this.’ I’m like, ‘Oh, and where is that server room?’ ‘Oh, it’s across the hall.’ I said, ‘And it’s secure?’ ‘And I said, oh yeah. I said that room with the open door that we’ve been walking by for three days.’ ‘Yeah, that’s it.’ I’m like, ‘Okay.’

And when I asked for the binder of MSDs sheets, they said, ‘Yeah, we’ve got one of those.’ I said, Okay, can I see it?’ And they handed me this binder, and it was empty.

Their binder was empty. I said, ‘Where where are the sheets? Where the the actual MSDs sheets?’ She’s like, ‘Oh, we’ll have to print them out to put them in the binder.’ Like, ‘But you’ve got the binder on the on the wall hanger, but there’s nothing in it.

Okay, I’ll check that. When was the last time OSHA inspected you?

And then um, they had another storage cabinet that was a metal storage cabinet, and it just closed, and this is where they kept all of their um printed circuit boards.

And so I and they had, they had like the receptionist giving us this tour, and I asked, ‘Okay, so this is your inventory of printed circuit boards? That’s great; the circuit boards are all in static-free sleeves; that’s great. So we need to see like how the inventory is kept, are they serialized, are you doing first in first out, that sort of thing.’ She goes, ‘Oh yeah, we are.’ She reached in with her bare hands and pulled the circuit board out of its sleeve. She’s not grounded; the cabinet’s not grounded; the cabinet itself is covered with all of these magnetic um you know not stickers but you know just magnets like ‘Have a good day’ kind of stickers uh magnets. And I’m thinking, Okay.

So she pulled the circuit board out, showed it to us, then put it back in its sleeve and put it back into the cabinet.’ And I’m like, ‘Oh my god.’

I can’t believe it.

Oh my gosh, Angela, thank you for sharing that; it sounds like uh, quite an interesting audit, one that hopefully the rest of us do not experience, yes.

So Crissa, sticking along Angela’s lines of kind of crazy weird things, what’s the strangest manufacturing product you’ve ever worked with?

I’m not sure I can top flammable and um electrical. Fine, hard to follow Angela’s act there. You know, craziest product. I think if you don’t mind me changing the question a little, I think the craziest thing I’ve had to do to get a product to full-scale production and delivery, um, I had a customer who is an intimate apparel company, and we were manufacturing in China, intimate apparel for them, and it was new technology that they were utilizing, and we were having a lot of difficulty with the fit.

And I was there to look at quality and how we might be able to speed production, and because the US market is consumers are built a little bit differently than perhaps those in China, they took one look at me in mid-production and said, ‘You’re about the right size as the fit model. Do you think you could go try on this bra and let us know how it fits and see if where we’ve accomplished some of the challenges that we had in the last round?’ And suddenly I became the fit model, and here I am standing in the bathroom of the factory with 20 people staring at me as I’m turning around and around in a bra.

So I thought that was as weird as it got. Then they asked me if I could please take the final sample with me back on the plane to the client in New York because I was flying back within the next day, and it would be faster than FedEx. And the client looked at me and said, ‘Well since you were the fit model overseas and tried it on, why don’t you just try it on for us?

I said, “I’m at an executive level managing these customers, but you would like your technical team and your designers and everyone else on the team to watch me spin around 360 in this bra? Okay, this is awkward, so that’s probably the furthest length I’ve ever had to go for a manufacturing product and hope never to repeat that again.”

You’re an expensive bra model, Crissa.

But I did at least get both Angela and Curt to crack up, so my my goal is accomplished. Stephanie’s cracking a smile; I’ll take that too. That was good.

Alrighty, so with that, we are at time. I want to thank everybody for joining us today. If you enjoyed the conversation, this is something that I host every month. Our next show will be February 8th, 1-2 Eastern time, and again, we’re bringing on experts from all over the world who are involved in manufacturing in some capacity to talk about their craziest train wreck nightmare stories in the industry because I don’t think we talk about that enough. So with that, I want to wish everyone a wonderful afternoon.