Manufacturing Supply Chain Woes
Juan Carlos Torres and Jasmin Nuhic
Welcome to our November Manufacturing Supply Chain Woes Show! It’s the holiday week, so I’m excited to have one last conversation about supply chain and manufacturing before we all sign off for the holidays. I am Sarah Scudder, marketing maven at SourceDay and our show host. I’m joining from the Bay Area today. I have been on the road; my schedule’s been a little bit cray-cray. At the SIG conference, I spoke at a conference in San Francisco, was just at the Procurement Foundry conference, and in the middle of that, had a move happening, so I’m looking forward to a couple of days of chill and relaxation.
Today, I have asked Jasmin and Juan to join; they both have extensive experience working in manufacturing and some really interesting stories, train wrecks, and nightmares that both of them have lived through, that I’ve asked them to talk about today. Our show sponsor for the year is Rapid Ratings. I have personally used their platform at a previous company; I’m a big fan of what they’re doing, specifically for those working in the manufacturing space. So, I’ve asked Eric to come on, as he always does, and speak for a couple of minutes at the beginning of the show. So, Eric, welcome, and happy holidays!
Yeah, same to you. And you definitely get some rest after all the move and the conference circuit. But I know I’m surprised I still have a voice left after so many events back to back. So, Eric, you have a platform that does a fair amount in the manufacturing space, so I’d like to have you just talk about what it is you do, and then maybe if there’s something in particular that stands out or that you guys are focused on or specifically doing for manufacturers.
Yeah, absolutely, thanks, Sarah. So, we’re Rapid Ratings, and we tend to see what others don’t around financial health, and that’s because we’re using financial statements on private companies in the manufacturing space or supply chain of manufacturing clients, right? To really detect issues early on. So, we really try to get out and look at what those issues are, which might bleed into operational risk. And so, we just recently rolled out a Health Mark model, which is an instant score on private company so that way our clients can understand if there’s any deterioration in that longer tail of suppliers, right, that’s in the supply chain. Eric, where are you going to be spending your holidays?
I will be in the Washington D.C. area, so hopefully it’ll be warmer than New York and, yeah, hopefully dry, and yeah, looking forward to it.
Awesome, all right, thanks, Eric. All right, thanks a lot, thanks. Appreciate it. Alrighty, so for those that are joining us live today, drop us a note in the comments and tell us where you are joining from, and also what your plans are for the holidays. I know some people like to stay home and get cozy, and some people are out and about traveling, so tell us what your holiday plans are.
So, I would like to have Jasmin and Juan both of you share your story before we dive into stories and train wrecks around how you got into the manufacturing space. So, Jasmin, we’ll go ahead and start with you.
Hey, thanks. Well, I mean, I would like to say it was very intentional because, early in my career, actually, my first career was as a professional athlete. I played sport professionally for about four years and enjoyed doing that. Then I found myself going back to school, getting my undergraduate and then graduate degree. And while I was working on my degrees, I found a startup that was willing to give me a chance to help and build a small manufacturing team for them, and to be what they call a ‘star point’, which I had no idea such a title exists, right? But you know, to essentially run a small team that would help with the manufacturing of medical devices. In fact, it was some special processing that was required to be done. So, I started doing that, thinking that, you know, I’ll do that until I got my degree, and then I would do something else with it on the business side of it. And then, you know, about two or three years into that job, I had a chance to get promoted, get more challenged, get a couple of mentors along the way who were willing to challenge me and give me some education, practical education in the manufacturing space. And then very quickly, I realized that, you know, from my lens’ perspective, the whole world is divided into two groups of people, right? Either you’re making it, or you’re selling it, and I realized that I couldn’t sell it. So, I figured I’ll stick around and continue to make it, continue to do manufacturing. I’ve been in the medical device industry on the manufacturing side for now, almost a full 25 years. It’s been a great ride so far. Had a chance to manage teams in the U.S. and outside the United States, had a chance to work within the pure manufacturing as well as the supporting function or lead supporting functions to manufacturing, and then most recently, had a chance to take over for a global manufacturing footprint for a medical device company called Bentus, where, you know, we’re going to talk about some of these challenges and some previous challenges, but, you know, it came into this space that is full of electronics, and we all know what had happened to that industry during the COVID times and recovery from that. So, I’ve been blessed to work with some great teams, manufacture a lot of good medical, either implants or instruments. And then, I don’t know that I would do anything else but manufacturing, honestly.
So, what sport? You said you were a professional athlete.
So, in the States, we call it team handball. And it’s not professional in the States; I played this back in Europe for four years before I originally moved to the United States.
Yeah, so when you say handball, you mean the backboard where you have the ball that you’re bouncing against the wall?
No, no. Handball is what I like to call the original handball, but it’s called team handball in the States. It’s a sport that’s a team sport; you play indoor, you play on a court that’s slightly bigger than a basketball court. Okay, and it’s, in a way, an indoor soccer with your hands. You set up plays almost similar to water polo, and it’s a very fast-paced game, two halves, 30 minutes each. You know, scoring is mid-20s for each team, and there’s a lot of contact and not much padding going on, so you walk away feeling every minute of that game. You got some bruises and sore joints afterwards. In fact, when I officially stopped completely playing, obviously this was after being a professional player, long story short, later in my career, I actually ended up being an expat overseas, and I joined a team just for recreational purposes and to learn the language, right? So, play on your strengths. And this is where my third child was born. And by this time, obviously, I was just a recreational player, but I was still getting beat up pretty bad. And then the way I knew there was time to quit was when my kids started running to me, and I’m like, ‘Whoa, slow down, like, you know, I like the hugs, I like everything, but right now, everything hurts.’ And I realized I should never have to tell that to my kids, so I decided to stop playing altogether. And now, I just enjoy watching it.
Awesome, thanks, Jasmin, for being here.
We’ve got Jim in the audience, joining us from Cincinnati, who says he’s probably going to eat too much, or his plans.
Juan, alright, yeah, I’d like to hear your story about how you came into our crazy industry. Absolutely, similar to Jasmin, most of my life growing up was dedicated to soccer, so I played soccer all my life. I knew little else than that. Yes, this was not planned to have two athletes on the same show, I promise. I believe you, I’ve never met Jasmin before. So, yes, I played soccer all my life, and I knew very little else about anything else. A lot of people who know me will argue that it’s still the case today, but in any case, I was in my last year of college, and my finance professor came to me and he said, ‘Juan Carlos, we are inviting some students to come to a breakfast for an internship at the company where I work.’ And I said, ‘Okay.’ And he said, ‘Would you like to come?’ I said, ‘What company do you work for?’ And he said, ‘I work for Procter and Gamble.’ I’m like, ‘What the hell is that?’ And he said, ‘You don’t know what Procter and Gamble is?’ I’m like, ‘No.’ He said, ‘Okay, well, do you know who makes this, this, and that?’ I’m like, ‘Oh, okay, well, sure, I’ll go.’ I said that I, okay, fine, I’ll go.
So, they invited me, and they tested us, some quick test, and then they offered us an internship, and it turns out that the internship was in a plant. Alright, so I did my internship in a manufacturing plant, and I never left. So, it’s been the internship was in 2012, from ’22 to ’23, so the last school year of my college, ’92 to ’93, so that’s 30 years ago. Alright, and I went into a plant and I never left. I’ve stayed in manufacturing all my career, have done 20 years at P&G, and then moved to Mes, and did five years there, and then I went to Pharmavite, which is a company that only people in the US would know. Then I went to HKO, and then two months ago, I joined a startup called NewMilk. Alright, so go check it out on the web, it’s a very interesting story, a very, very cool project going on, and I’m working with them doing manufacturing again. I’ve lived in different countries, I’ve held local, regional, and global roles in the different companies that I’ve worked, so I have literally seen plants everywhere in the world. Alright, and it’s my passion. I really enjoy it, I really love it. At this point in time, unless something earth-shattering happens, I will stay in manufacturing until I have to retire. I love it, I absolutely love it.
I hadn’t done running machines for a long time, until now that I came to the startup. There are eight of us, alright, so just days where, ‘Who’s going to run the machine?’ ‘Okay, I will.’ And I go and I’m manufacturing products because we’re just launching a home machine for the products that we make, so we really have to get going on that. It’s fun, it’s a lot of fun. I’m doing things that I haven’t done in many, many years, but there are things that I know, so it’s a lot of fun. It’s a lot, a lot of fun, and I don’t think I will leave.
Hey, Juan, sorry, to interject here, but you got a big smile as soon as you start saying, you know, running the machines. We all miss it. Yeah, we all miss, you know, just, we love pushing the buttons and testing it out, and yeah, yeah, yeah.
So that’s my story. Welcome to the world of startups. That’s, I have spent my entire career in the startup world, in supply chain and manufacturing, and some days you want to pull your hair out and scream, but it’s very, very rewarding and fun to be able to do so many different things.
Yeah, I agree.
Alright, so you guys both have very extensive backgrounds in manufacturing, a lot of global experience as well, which I think is interesting for our audience. So, Jasmin, I want to start with you. One of the things that you’ve had experience doing is launching new products, and there are lots of challenges and things that happen when launching a new product. So maybe you can dive in and pick out an example or two of a train wreck or nightmare that you lived through when launching a new product.
Thank you. Alright, so, yes, let me just say this, though, right? Launching a new product is a great satisfaction at the end of the day. You do know this is a new technology, or new solution, or new therapy, or heck, even just a new procedure, right? So, same, same, same, everything, same implants, same doctors, but you figured out a surgical solution that can reduce the surgery significantly, to, you know, half the time. So, if you put yourself in the position of a patient, that means half the time spent on the table, half the time sedated, right? So, there’s a huge process. So looking back, you know, after the launch, it’s always satisfactory, right? There’s always, right, you know, some folks say, ‘Well, we need to celebrate, we need to get a shirt.’ I’m like, ‘I don’t need it, really. I just know that we are better off because of it,’ and all. It’s been a great experience.
Now, I would say is, though, right, one of the things is, as you probably, and Juan probably has experienced in the last 10 years or so, there’s been a lot of transition from traditional manufacturing to the RT manufacturing, or even some other means of manufacturing, from the MIM to laser printing, and that kind of stuff. So, that brings its own challenges, right? So, you’re trying to keep up with some technology, you’re trying to launch a product that with you using the technology that you never used before. So, the example that I want to share was, it really was, I was relatively new to the company, the when I was invited to look at some of the NPI project, we call NPI projects, right, new product introduction projects list, and we were scrubbing through them.
We realized that, you know, the company, at one point in time, was over-ambitious and probably embarked on too many projects at the same time. So, they were looking into which ones they’re going to nix, and of course, you know, any projects that were discussed in terms of the return on investment, in terms of the market looking like, or what the regulatory path was looking like, I was sitting relatively passive. You know, if they keep it or remove it, I didn’t really have much to say, or didn’t feel like I was the right person to talk about it. But what had happened was, we brought up a project that we wanted to launch a new implant. However, we wanted to launch it with additive manufacturing technology. And by the way, since we had never done that before, it appeared that everybody was set in their minds that we’re going to nix that project. It’s too big, too much, too new for us, and maybe that’s something we need to put on the side.
And of course, that’s where it gets to me, right? Now I was like, I’ve got to speak, I’ve got to put my hand up, and then say, ‘Do we want to keep it or not?’ And I actually asked folks to give me two weeks to figure it out if we actually can make this happen. Long story short, we committed. We’re going to make it happen; we’re going to go with it, and the project stayed. My name was attached to it. We ran the project pretty successfully, but given its additive manufacturing, one thing we did not perceive, we did not see it coming, came in at the very tail end when we were doing the filing with the FDA. We thought we had all the testing done, we thought we had all the requirement analysis done. We involved the university to help us with some of the analytical work, material analysis work. We felt really good about it, and then submission comes, and we got a problem. Apparently, the particles get trapped during the 3D printing. There was no FDA regulation, there was no FDA standard to see how many particles can you have trapped inside your implant. And so, by the time we’re ready to go and submit, and we are ready to submit, we engage with the FDA. They said, ‘Listen, guys, the best way to do this is to have zero.’ Of course, right? But that’s shooting for perfection.
So, nevertheless, here we are, finding ourselves a year later, at the same board meeting, reviewing the same projects, right? Similar projects, and this project comes up. And it says, ‘Well, what happened?’ Well, in order for us to launch it, it has to be zero particles. And they obviously derailed the project, created a lot of anxiety on the team. But the good thing about it is, fast forward, right? We engaged with another manufacturing company that successfully actually launched a product with some particles on it with the FDA, and we were able to leverage their data and partner with them in order to obtain the FDA approval. So, for a moment, I thought, ‘Oh my God, right? I thought I got this. We were on a winning streak, we were passing the tests, the company was getting excited, we baked this into the financials. In fact, this was September, right? So, we are ready to go and launch in Q4, and now we’re going to actually have to completely stop it, and all the money will be sunk because we did not think about this particular regulation.’ So, yeah, I lost a few nights of sleep over that. Spent a lot of time with the R&D guy that was the lead on this. But ultimately, like I said, thanks to the partners in the industry, we were able to overcome the challenge and then file it with the information that we had, using their data and their justification. And hence, today, that implant is on the market, still produced the same exact way. And we, as far as I know—I left the company since—but as far as I know, the company hasn’t had any complaints in terms of loose particles in the body as a result of the 3D printing.
Yeah, when you work in a regulated space, there’s always an extra complexity doing anything, but in particular when it’s something new, right? If you don’t have any historical data to pull from, you’re kind of hoping for the best in some cases. Jasmin, was there any piece of this rollout that was a major challenge from a supply chain perspective, like a part or material or something that you just really, really struggled with?
So, we were constrained on the material. The 3D printers that we had, they were only validated for a certain supplier to get material. So, actually, we were able to find an alternative. Yes, the short answer is yes, there was a shortage of material. But we found what we thought was the equivalent, and like I said, we engaged even with the local university to do the analysis of the material, to give us true proof that we were actually using the same material. However, due to our contractual agreement with the 3D printer company, we were not allowed to switch. So, we found ourselves—I wouldn’t say it was not too big of a challenge—because they ended up working with us, and they understood that we actually had an alternative, and we were ready to really take this to the next level, if necessary. But it was a hiccup. It was a matter of fact; this hiccup happened very early in the project. So, I’m going to guess that if this happened a little bit later in the project, when we were ready, let’s say, to launch, then piling this on top of the regulatory hurdle may have put the last nail in the coffin for the project.
We have Raphael saying, ‘New product launch or new facility launches are awesome.’ And then Mark, based on one of your previous comments, said, ‘One reason I understand how to create quality operating procedures is because I ran machines in my own startup.’ So, Juan, similar to the space that you’re finding yourself in, what about you? Any product launch train nightmare that stands out from a supply chain perspective? Now that Rafael reminded me, maybe not a product launch, but a plant startup, alright? This was… I think the project lasted two and a half years, and I aged 15, alright, in those two and a half years.
We won the manufacturing lottery, which is somebody comes into your company, to your plant, and says, ‘Guess what? You’re expanding. You have to build a brand-new facility right next to where you are, so you’re doubling in size, and we’re bringing a ton of production here.’ Which is, again, the dream for any manufacturing person because typically what you see is the opposite, right? Plant closures, plant reductions, and stuff. So, we won the lottery, and the company says, ‘Here it is.’ I had to hire all of the machine operators, all of the technicians that would run equipment, maintain equipment, clean equipment, and everything. And I have to hire all of the leaders who would be taking care of the plant and all.
And so, one of the things that we noticed ahead of time was, because of the nature of the generations of younger professionals that are out there, we know that, at least a study that we did in P&G maybe 15 years ago, said people from my generation will have three or four jobs in their lives. The people from the new generations will have seven to nine by the time they get to 29 years old. So, we’re like, ‘Oh my God, so how am I going to hire people, and then we’re going to spend months and millions of dollars training them and qualifying them, just to know that they’re going to go?’ Alright, so we started thinking, ‘How do we make sure that whomever we hire is going to stay with us?’ Okay, because that was becoming a nightmare.
And one of the things that we did was something that sounds… I used to joke about this. I used to say, ‘Let me tell you about a very complicated algorithm that we have designed to make sure that people come and stay: ask them.’ So, I sat down with a group of like 20 young professionals out there who were going to work in my plant, and I asked them, ‘Okay, if this was—if I gave you a blank sheet, and let you know what would be your dream so that you really want to come to work here every day and stay with us, what would it be?’ Right? And I had a blank sheet of paper, and I started taking notes, and they said, ‘Lego table, swing chairs, a place to work out, and a PlayStation 4 with a big screen TV, a popcorn machine, bean bag chairs.’ Alright? I don’t know, they made a list. Alright? I said, ‘Okay, well, that sounds very interesting.
And so, as soon as that finished, I went to my engineering manager, and I said, ‘Doug, everything, everything that’s in this list will be in our plant.’ He looked at it and he said, ‘You’re crazy.’ I’m like, ‘Yeah, I know. So, do we need to go get more money?’ He’s like, ‘Oh hell yeah.’ Okay, so I had to go to my boss, right? And I said, ‘Boss, I need you to give me X amount of more dollars in the project. And by the way, you have to say yes. So, this is the one ticket I’m going to use in our relationship where you are going to say yes, and you’re going to go to war for me.’ When I told him, he said, ‘Champ, I’m going to kill you.’ I’m like, ‘I know, I know, I’m crazy, but please get me this, alright?’ So, I got the money, and I have pictures to show anyone who knows, and the people who work with us, is we had swing chairs, a popcorn machine, a PlayStation 4 with a big screen that, on Fridays, we used to play a tournament. We used to play FIFA on the game, the Lego table, the bean bags, everything, alright? We had everything. The place, when you entered, was crazy. I told them, ‘I do not have a hundred million like Google to make an awesome office, but that doesn’t mean that we cannot copy some of the very cool ideas that a Google office has, alright?’ I had the chance to visit a Google office in South America, so I kind of knew how this worked, and so we said, ‘We’re going to create our own little space.’
I had a mole inside of the group of younger kids that work in the plant, who showed me some messages that they had in a little group chat that they had, and they were ecstatic. They’re like, ‘We look better than the head office, right? Our place rocks.’ Well, guess what, the attrition levels, which in manufacturing, in a normal manufacturing plant in non-COVID days, would be like seven and a half to eight and a half, we had less than 1% attrition. People were coming and having a blast here, right? And what I told my bosses is, ‘I’m going to have you come here and figure out what happened here because when people come to our plant, they’re going to say, what the hell happened here?’ And it did, alright, and it was fantastic. We had no attrition, people had a great time, it was very, very good.
That was one issue. The second nightmare in that project was it happened to be in Canada, in Toronto, and we had the worst winter in, I think it was 60 years. So, construction of the building had to be delayed twice by 3 months. And so, as a company, we made a decision that most of you will say ‘duh,’ which is, we shut down a plant, and we were starting up ours. Okay, so when I was starting up my plant, the other one was already shut down. What we did is, we built inventory and we froze it, alright? We did the science to figure out, can we freeze product so that it stays fresh? When you say literally mean put it in a freezer? Yeah, yeah.
And so we did. The problem is the construction was so delayed that I started eating into that inventory. So when we started up the plant, we literally had Costco threatening us to the list, alright? And I was starting up a plant, by the way, the lines were brand new, so this was a completely new technology to make crackers. No other place had a line like ours, no other place had an oven like ours, and we were learning as we go, with a gun to our heads, because we had to start producing for Costco. So, you know, if you create all of that startup environment with a bunch of people who just started working with me, and so I believe that if I had not created all of that, I call it the playground for people to have a good time, they would have left because it was stressful, like you all want to know, right? I have a picture before the project started and a picture after, and I had no gray hair, believe me, and then I did. So, you know, creating the environment, because you know that a startup is going to be very, very, very complicated, difficult, and stressful, I think it’s cornerstone. So that was the first thing that we did, and interesting that all you all, it took was asking how and why, yeah, yeah, right? A very simple thing that I think all of us sometimes overlook and forget to do. Really,
[…] says again, very long note, the process of making sure the facility is this ready, is daunting in all aspects. However, after the headaches and stumbles you go through, you are ready to start regaining full control of the process. This transformation is an incredible experience. So, it sounds like he has quite a bit of experience there as well. Jasmin, you also have had some challenges with retaining talent, so going out and not only finding the best people to hire but keeping them happy and engaged and interested enough to stay. So maybe you can share a train wreck or two and then something that you’ve done that’s worked in that area. Yeah, you’re right, Sarah. So for folks that keeping up with the trends in the United States, at least right now, as of last week, a report came out that says that if every eligible person that can work in the United States did actually take a job, there would still be 3.4 million jobs open, meaning there’s the in in any way, shape, form, or fashion, if you were measuring the number of people, the number of opportunities, or number of positions, the number of positions is far more than the number of people. So, you know, put that into perspective, right? That tells you that, right off the gate, you know, what one was talking about, people switching jobs, the opportunities are still there, right? It’s still an employee-driven market. So that’s one thing, and the second thing is, that’s also very much known, is we have had experienced a rapid change of how we do business, what we do, where we do it, right? And what I mean by that is that, you know, from the how, in terms of the using the technologies like what we’re doing today, to the what we doing, in terms of either that be like, I say, from the Ed manufacturing to the using of the AIS and BIS of the world, to the point where we are doing, right? We, we see, especially on the manufacturing side, we see a tremendous number of reshoring happening in the United States. So, we are not only just doing business outside the United States, but we are increasingly doing the business in the United States and, arguably, the number one reason why we are not reshoring fast enough, why we are not growing manufacturing aspect in the United States as fast as we could, is because of the talent, right? I think everything else we can most likely overcome and overcome relatively quickly. So, with all that said, yes, you know, so we have had a case where we decided to consolidate some of the operations into one facility, and we needed to ramp up the hiring. Sure enough, we had a hard time finding the people. So, our plan to close the other plants was executing very well on schedule, right? But the ramping up on the receiving end was going much, much slower to the point where, again, three months later, we were still trying to hire the people. So, same similar conversation, very similar to what one experienced. This is true, this actually happened, happened during the Christmas or holiday launch in December two years ago, where the CEO was saying to me that, ‘Hey, listen, we got this new building we’re building it up. We’re going to consolidate all that stuff.’ He asked me, ‘Make sure that we have a customer experience area in that space so that we can bring the customers and all that stuff.’ And my response back to him was, ‘No problem, but I want to have employee experience here, and guess what? You’re going to pay for it, right? I don’t want it to come from the cost of goods sold.’ Right? Now, given that, you know, he, we had a good relationship, on the spot, he says, ‘No problem.’ Right? So, one, we do to have ping pong tables, and foosball tables, and, and CH and some really, really high-end chairs that I’m jealous, my friend, like I wish I had them in my house. You a popcorn machine, though? We do have a popcorn machine; we have popcorn Thursdays. So, we do have that as well. So, as you can see, guys, there’s a trend, right? There is a trend, and there’s a level of expectation that not only that, you know, folks are expected to come in and perform and just sit in their chairs and perform the work, but also, they do want to come; they do want to have some good time at work, especially, especially if you’re talking about, you know, times where you do have rain, you have a storm, you have cold weather outside because people tend to work out, right? People go for lunch and go for a run, and they can’t do it; they still want to do something, right? And so, we do, we do, we do that as well. And does it help? Yes, it does help. But to answer your question, what truly, what really made a difference, and Sarah and Juan, I’m not sure if you guys had experienced this in other places, but there’s research that shows this, LinkedIn research shows year-over-year, and the Chamber of Commerce, now publicly talking about this as well, is what used to be that, you know, people join companies, but they quit managers, right? The manager role actually dropped from number one to almost like a number eight, and the number one reason why most employees leave companies these days is the lack of professional development.
And so, one of the things that we have done is we intentionally started putting and improving our professional development programs that we have in place. Now, Sarah, you know this is live, so you cannot edit this out, but I’m going to do a, you know, shameless plug, right? So, I have a huge passion for professional development. I believe it goes hand in hand with manufacturing. The books that you see on my, I guess on this side, right? Half of those books, I actually wrote and published, and articles I published on that topic of professional development. And then I try to, obviously, you know, work with the other authors, and these books that you see behind me, they’re all signed by the authors. But, one of the things that we have found out is that the true investment in effective professional development programs, and having people take advantage of it, take opportunity, take that to themselves, we find there’s a direct correlation, direct correlation between how good our professional development program is and our retention rates. In fact, we measure the engagement scores every year, and we find out that, again, those who are perceived from the leadership perspective as a person that’s actively working on developing their employees, their engagement scores are always the highest. Right? Our focus groups came back the same way. We felt that our managers truly invested in us.
So, to tell you that we did not have any hiccups? No, we did. We have had cases where we hired folks, we paid above average, we paid them more money than what the local market is. We sent them to the unloading site for three months, we paid the expenses, they came back, they worked for another two months, and guess what? They left. And that sets back a ramp-up site at a huge disadvantage, huge. As a matter of fact, I groan even now, thinking about it, right? It’s really like, ‘What the heck? How could we have done this differently?’ And we toyed with contracting and putting some clauses in place and all that stuff, right? But, at the end of the day, we found out it’s not, you know, just bringing a bigger stick does not work. What works is the true passion and true investment in employees. And we found out, like I say, beyond, you know, listen, the ping pong table still helps, right? Don’t get me wrong, and the popcorn machine still works, and holiday lunch still works, but what really made a difference for our era was the investment in professional development of our folks. And I will tell you that, you know, when we do, now, my team personally, when my team does the performance reviews and exchange of feedback, we actually have intentional conversations about professional development as well.
I would also throw into the mix, which I’m not sure if this necessarily falls directly in professional development, but having a path for employees to move up in the company is also very important. If I join an organization and I see that I’m not going to have a chance to ever progress, or it’s going to take years and years to do that, I’m less likely to stay, rather than, ‘Oh, if I do these three things, I’m able to move into this role and this role and this role.’ So, say, can I, I’m going to do, I’m going to say both things at the same time now, right? So, there’s a number of employees like that, true, and it’s a big number, right? But it’s also amazing how many folks these days, they want to be the best they can be. They want to be subject matter experts. They want to come in and do what they think is their best, their best ability to do, and promotion may not necessarily be something they’re interested in.
I will give you a case, just to give the audience a different point of view, because you’re right, that is true, there’s no doubt about it. But there are folks that leave an organization because you are offering them promotion. You actually tell them, ‘I’m going to promote you next year,’ and they just freak out and leave. I would tell you, there’s a Fortune 100 company that contracted with a consultant, and they thought they needed to identify top 100 high potentials. They identified them, they provided them some limited coaching, about three months, right? Some trainings and stuff like that, and they promoted them to a manager’s role. Exactly 100, 82 of them left within a year. 82%! And the number one reason why they left was because they didn’t feel like being a leader was what they wanted to do, right? So, they were high potentials because they were really good and passionate about what they do. They were not necessarily looking to get promoted. And it really stuck with me, to be honest with you, and I actually wrote in some of the articles, is because my uncle was one of those people. He spent his entire career being an engineer. He was asked to be promoted, he was asked to take over departments, he was asked to move to a different place and get a really nice setup for himself. Didn’t want to do it, didn’t want to do it. He was very passionate about what he does, and he retired a very happy man. He felt like he developed a lot of good stuff, he worked really hard for a number of different companies, but what he really wanted to do, he wanted to be an engineer. He got, it’s cool to be an engineer, that’s my passion. I like to see a product that I actually put together, that I drove, that I actually designed, right? And he did not want to deal with the politics, he did not want to deal with the budgets, he just did not want to deal with that. And that struck me very hard because when I had my conversation with him about my professional development early in my career, he gave me his story and his passion, and I’m telling you, the entire career, the entire career, he was a subject matter expert, but he was recognized as such. But I found out that there’s a mix, that there’s a number of people that truly look for opportunity. ‘Okay, what is next, and what is next after that, and what does the career path look like for me?’ But also, there’s a number of people out there that, actually, you know what? ‘I want to be the best I can be, and I want to be successful in it, I want to be recognized as such, but I don’t need, I don’t want accountability over other people.’ I think the key to that is asking, asking your employees, ‘Is this something that is important to you? Where do you see yourself in two or three years?’ So if you have that conversation, I think you can identify people that are, or aren’t, interested in progressing.
I agree, 100%. Yeah, so Mark says, ‘Yes, Jasmin, employees leave because of lack of professional development. Keeping and retaining workers is based on empowering them with the skills and responsibility in both quality control and making process improvements. The greater the level of training and engagement, the greater their desire to stay in the company. Make quality and transformation everyone’s job, as Dr. Deming would say.’ FYI, siloed companies fail at this. Good call, Mark, good call.
Mark, I think, and you know, I take the word ‘professional’ outside and look at only ‘development,’ alright? Because development will mean different things to different people. Right? I’ll give you an example. When I had to staff more or less 35 team leaders in one of the plants I managed, alright? And so, the way I did it is I said, ‘Well, you know what? Let’s post it. Let’s post it out there for people who is in the plant, and let’s see who applies and who wants to be a team leader.’ Right? And so, people applied and posted, and everything, and then we had to take them through the recruiting process, internal recruiting, one of which was answering a test. Right? I told my operations manager, ‘I want you to write a test for them.’ Alright? And so, when they gave us the test back, surprise, surprise. So, we’re talking, this was in Canada. Canada is the most multicultural place in the world, more so than anywhere else, and I will take bets on it. And so, a lot of the tests that people were writing would not come back in English. Alright? I had like 40 tests that were answered in Greek, in Greek letters. Alright? Some of them were in Russian. Alright? And so, when that happened, I told my people development leader, ‘You know what? I want you to go find out. There’s got to be something out there where we offer free English classes for all of our employees.’ Alright? And we’ll make it a school, we’ll make a classroom for them, we’ll bring teachers, that will make graduations and everything, just do it. Of course, you go, you reach out, and you find out that, guess what? The government sponsors programs like that. And so, we taught English to anyone who wanted to learn English in our plant. We told them it’s free, all you need to volunteer is your time. Alright? So, we figured out different class schedules, so that people would come in before their shift or would stay after their shift to do their classes. And sure enough, we did graduation ceremonies, we invited their families to come and see them receive their diploma.
It was one of the most emotional moments in my career to see some of those graduation moments, and guess what? That’s development. Because a lot of the people had to, you know, immigrate into Canada from their countries because of duress, and they did not learn to write or read English in school like other fortunate kids do. And so, we’re teaching them that, right? The other thing is, as you said, Sarah, ask. One of the key principles of my people development process, when I first was a director, I told all of my leaders, ‘You go sit down with your team, and you ask every single one of them, what do you want to be when you grow up?’ Right? And exactly what you said happens. So, people say, ‘You know what? I want to stay at the level where I am for the rest of my career. I want to retire being…’ I had a person who was a Quality Inspector, and they said, ‘I want to be a Quality Inspector for the rest of my career.’ Okay, fair enough. Guess what we did? Okay, let’s make sure that they do right so that they stay with us.
But yes, it’s important to not only look at this as total development for people, because sometimes you don’t know. It happened to me in Morocco too. We were kickstarting a TPM program, and so one of the key aspects of TPM in the early stages is to write what’s called ‘one point lessons’, which is whatever catches your attention, and you have a question and you learn about it, write it on one piece of paper so that others can learn. And then somebody came to me and said, ‘Guess what, 40% of our plant does not know how to read or write.’ So, guess what? Okay, let’s take two steps back, and we’re not going to teach them how to inspect machines. We’re going to teach them how to read and write. Right? People will go to war for you when you do something like that, big time.
Yeah, talk about a retention strategy. Yeah, you’ve got your some lifetime employees or loyalists out of that, for sure.
Yeah, so we’ve spent most of the time today talking about people and talent, which is so important, and going to become even more important to be a leader in the manufacturing space. I also want to talk about now availability of supply and how that’s impacted both of you, in particular around raw materials and packaging materials. I know that this has been a big struggle, has caused train wrecks and nightmares for most manufacturers. So, Jasmin, maybe we’ll start with you. You want to share a train wreck or nightmare story, and then what you did to kind of fix or solve or figure it out?
Yeah, so boy, go, that’s tough. So listen, you hit actually two things that happened within the last year, right? And packaging was one of them, and I’ll start with that, and I’ll talk about the raw material on the other side of it, or what we call a purchased component but goes into our device. But one thing is that, again, just to give a little bit of perspective, right? You know, when it comes to the medical device industry, we tend to be what’s known as a high mix, low volume industry, right? So we don’t make millions of anything, right? It’s hard to do this, right? You know, maybe pharmaceuticals, you may make some pills, or you make some syringes, and that kind of stuff. But if you’re talking about devices themselves, right? You know, it’s hard to find somebody that makes a million elbows a year, or a million hips a year, or even variables where people actually do wear them. But I’m talking about medical devices; I’m not talking about Fitbit and that kind of stuff, right? So it’s just not common. And if there are some, there are exceptions; those people are exceptions.
So now, put yourself in a position when you are competing with companies that are not medical devices but are using similar or the same components, products, or raw materials as you do, right? You don’t get much priority. You know, if somebody’s going to order a ton of certain stainless steel versus you ordering two or three rods, well, guess what? They’re probably going to get more attention than you do. Right? Now, of course, we have our strengths, right? We make devices; we help people; we gain a quality of life. So we try to play that soft side to our suppliers and say, ‘Hey, come on, you know what we do is novel, right? It’s pretty cool; it’s, we help people.’ Right? So they’re like, ‘Okay, right, you know, making us feel bad. So okay, here’s some for you too.’ Right? So we have had those cases. But Sarah, I tell you, because of those things, we had a packaging supply issue not long ago, where the Tyvek that was used, that actually helps us establish and maintain a sterile barrier, right? Most of our product gets sterilized, and we make sure that once it gets sterilized, it stays sterilized for at least three-plus years, right? And so for us to be able to do that, we’ve got to be able to have a proper, proper, and unique, relatively unique Tyvek or material.
So long story short, the supplier decided to eliminate, truly just eliminate, that SKU. They parted from their COG, and the way we found that out was when we placed the PO, and they told us, ‘We don’t make that anymore.’ So, you know, obviously, the first thing comes in, ‘Can we do a last time buy? Can we pull any strings? Can we explain to them that we make medical devices?’ But unfortunately, in this case, what happened was, they had already disassembled the line as well. So, it was way too far for them to return or to reverse back to that particular type of product or particular SKU.
So now, the other thing is, what happens is when you have a change of SKU, right? So, you can either change to the next SKU with the same company, right? Which requires a change, again, sub-FDA submission, right? There’s a regulatory piece to it. Or you can try to find somebody who makes a very similar SKU, right? But then, you have a change of a supplier, and then you have a qualification of a supplier, and you’ve got all that process. And because it’s a sterile barrier, it is considered a critical supplier. Guess what? Still FDA submission, right? So, you know, you’ve got to pick your poison. In this case, and sure enough, in this case, after reevaluation, we actually found out that staying with the same supplier by moving to the second-best option from the catalog was the way to go. But the burden was on us to show that the qualifications and validations of the material will still protect our product, protect the sterile barrier. And unfortunately, right? We have had cases where we were on the backorder. We had patients waiting on that device until we were able to get across the finish line on the validations in order to be able to supply this product back to the market. So, major setback, major setback, because we found out too late that they discontinued the SKU, and it was unfortunate. After that, they even discontinued the manufacturing line, so they really had, we had no chance to win on this one. Luckily, the business was understanding of the situation, and I know, ultimately, approximately, you know, let’s say, we have about a double-digit number of patients that had to wait, and it’s unfortunate, but that happens, and it happens every once in a while.
Now, could we have done it faster? Probably could have, if it not again, right? But given that the regulations govern everything we do, it just takes some time, right? We have a saying, and maybe Juan has the same, but we have a little bit of a saying in manufacturing, especially when it comes to the changes to the components, ‘It takes nine months to have a baby, doesn’t matter how many wives you have.’ You know, there are certain things that just take time to do, and no matter how many resources you put to it, it doesn’t matter how much time, or effort, or whatever else you put into it, it just takes time to overcome. And this was one of those, you know.
And I will give you a quick, just to give Juan an opportunity to answer as well, but we also had another case where we were buying a raw material that was, um, that is actually a combination of the two raw materials being put together; it’s a mix. So, it’s a custom for us. It’s required to be a custom for us because it’s an implant. It was a while back in my career, but unfortunately, so the material A, material B, where B was readily available, but the mix of those two was only for us, for our implants, for our purpose. Well, again, you had a supplier who is a large, very large company, and we are a very, very small customer to them. And when we asked them to actually, you know, we knew they had material A and B available, just to mix it together, they say, ‘We can’t afford to shut down our machines to do the mix.
So you guys either have to buy A or buy B, but we just can’t afford to shut down manufacturing of A and B, because their demand is high that we can actually just work for you on this small batch to mix A and Bs, so we actually had to again, we had to sit and wait, we had to wait for a number and wait until the time is that they allow them to do the mix. But Sarah, what we did and I hope this helps the audience today, we realized we couldn’t solve that problem, we couldn’t overcome their business decision, so what we did was the rest of the supply chain we prepare to double up to triple the production to increase the bandwidth, to minimize the decision making, to really, really like do as best as we can, smooth out the everything from the moment we got this material, because keep in mind they’re going to shut down their manufacturing mix a lot of A and B just for us, right, and give it to us in one big bowl as a load of material, and we did not want to piece meal the process, we wanted to make sure that that can handle the entire process all the way from A to Z, all the way to actually to the customer, and we spend, you know, well a lot of time doing this, we sent Engineers to the suppliers to make sure that they are prepared, we qualify additional lines twice as much capacity as we needed, normally, right, but we found out we needed to invest all that stuff, so from the moment the material becomes available, we can push it as fast as we can, as much as we can so that we come on the other side as quickly as we can compared to the traditional what we would if we were normally producing 5,000 a month, we were actually qualifying the process to produce 12,000, right, so that tells you we don’t need 12,000 a month, we just need to recover from that backlog, back order, and then once we get back into normal state, we will scale back down to 5,000, but that was our way to recover, as fast as we can. Again, just because as an industry we tend to be a high mix, low volume, and in some cases when you’re working with very large suppliers, unfortunately, you just don’t get priority, interesting it reminds me of single sourcing nightmare stories, yours is a little bit different because it’s again highly regulated, but I can’t tell you how many people have come on the show and had a single source and COVID shut down that supplier and literally shut down their manufacturing plants as a result, and I can tell you that you know, not to bring politics or anything else into this, but if time was permitting, I would just tell you that one of my sites is in AC, Israel, and that’s a story by itself. Well one, I feel like we almost need to have both of you come back on the show as part two to talk about this topic, we are at time. Raphael says thank you, Juan, Jasmin, for your time; you both helped me confirm that my manufacturing principles are perfectly aligned with successful manufacturing, so if you are not connected with these two gentlemen on LinkedIn, highly recommend you reach out for those who celebrate the holidays, wishing you a wonderful holiday week, and our show will be back on December 12th to have another discussion about train wrecks and Nightmares happening in supply chain within the manufacturing space.