Manufacturing Supply Chain Woes
Eddie Saunders, Cassandra Turgman, and
Welcome to the Manufacturing Woes show. I am Sarah Scudder, CMO at SourceDay, and our show host today. I’m going to be joined by Eddie, Cassandra, and Jeffrey. They have extensive manufacturing experience and I’ve asked them to share some of their nightmare stories with us today.
Our show sponsor is RapidRatings. I’ve been friends with their team for many years, actually used their product at my last company. They have a tool that tracks and audits the financial health of your suppliers. So if you’re looking for something in this space, shoot a note to me or check out RapidRatings online. Big shout out and thank you to them for sponsoring our show all year long.
To kick off our conversation today, I would like to have you put in the comments section where in the world you are joining us from. So drop us a line, let us know where you’re joining us from, and then I would also like to have you share a word or phrase that describes your biggest manufacturing nightmare. So let us know the craziest, most wild thing you’ve lived through and tell us a little bit about it in the comments.
So with that, I am going to have Eddie kick us off today. Eddie, with the pro mic, he looks like a legit professional podcaster today. Eddie, would like to have you do a quick intro, tell us a little bit about your involvement in the manufacturing space, and then would also like to have you share a fun or personal fact about yourself.
Absolutely. So, my name is Eddie Saunders Jr., and I’m just a passionate marketer, entertainer, noise maker, and all transparency, just really passionate about marketing and human connection. And that’s really what I do on a daily basis in a variety of specific forms here at Flex Machine Tools. So really just a human connector, human light bulb, and that noise maker, it’s just what I do, what I live, what I breathe, and I have the best time in the world being able to do it. And if we’re talking about a little fun interesting fact, not only was I a former mixed martial arts fighter, I was a top-ranked fighter within this amateur circuit. And I currently run a mixed martial arts gym where I am the founder as well as the head kickboxing coach.
Eddie, I feel like you are the true definition of an entrepreneur, always having multiple side hustles. I enjoyed reading all your fun facts when you submitted them for our promotions for the show. So, would like to have you tell me about a time when you had a disastrous high magnitude prospect visit when working at an Aluminum Foundry in your early 20s.
Yeah, fun stuff. So a lot of my experiences in the sales and the operational side of it. And so, of course, we all know in the building when you’ve got a high magnitude prospect or a big business opportunity coming into your facility, you gotta have everything right. You know, the floors swept, you gotta have everybody in there nice, or whatever, everything nice, because coffee’s gotta be warm. And it’s hard to do that in an Aluminum Foundry because the floor, everything’s just naturally dirty, because there’s sand everywhere. There’s just sand everywhere, you can’t avoid it. And so we were really excited because we were trying to create some more leads, more opportunities, and had a high magnitude prospect that was a really big deal from a trade show that was agreeing to include us in an opportunity for this large contract, which those don’t come around very often. So in the castings world, you get really excited about those, right? And so we went through all this vetting. And so, of course, it was just horrible.
So, I’m Jeffrey Luft. I have been in the manufacturing, but I’ll put it under the supply chain umbrella space, yeah, for in excess of 40 years. Started when I was two, so we have building blocks and making things, and I have done everything and anything under what we would call the supply chain umbrella: from manufacturing to sourcing to transportation to managing global teams around those areas of concern.
I believe that especially in manufacturing, but manufacturing is the recipient of a bill of materials or a design plan from elsewhere in the business, that as supply chain leaders, we need to make sure that we’re involved as far upstream the process as possible, so that we can coach the procurement team, the factory team, the sourcing team on challenges to a material that may not be available for the projected lifecycle of a product.
Fun fact? Well, you know that I am a minority owner of an NFL football team. What other fun fact can I give you? The furthest I have traveled for a concert is roughly 5,800 miles from New York to Buenos Aires. You definitely have me beat for concert going; that’s quite a trek.
So, Jeffrey, your components finally cleared customs and are on the way to the factory. You need to make certain when the driver arrives he’s not waiting around for hours and that you are ready to offload and move components right into storage. Why is it that you didn’t plan these things out in advance?
A lot of times, we forget to pay attention to those little things, or we don’t have noticed that material is actually on time to arrive at our gate. So, dock scheduling, appointment scheduling is really key for us to ensure that we make those arrangements with inbound drivers or outbound drivers so that we minimize the time they’re in our yard, we maximize the time we get our material off of that transport, and then we get them out the door. So a lot of times, it’s because we have not done that before, and the company I’m working with now, that’s one of the pieces that we believe very strongly in bringing to market and helping others. You need to be aware, and you need to make those schedules and hold drivers to that.
Do you have a story or example that you can share where things went awry because planning was not done ahead of time?
The example of the best example I can use is a driver. Now, as some of you may know, drivers are paid for the route they drive, not necessarily the amount of time that they’re in their vehicle. We’ve all heard about driver shortages and driver issues over the past two and a half years. Part of that is because they are spending so much time in line to pick up a container at the port that cuts into their overall hours of service driving availability. So drivers are only allowed to drive, I believe the current number is 14 and a half hours in a 24-hour period, and then they have to rest for 10. But if I’m sitting at the port for three or four hours, that’s cut into my time of that 10 and a half hours. So when I have a driver who gets to me and I don’t have him scheduled and I don’t have a place to put them, the driver’s sitting outside at the curb waiting to come in, and he’s not getting paid for sitting there. And if I haven’t gotten him in in time, then he is going to blow past his hours of service, take my delivery, and put it somewhere else because he can’t leave it on the side of the road, and he’s not going to sit and park there overnight. Oops.
Do you have an example of the reverse, where somebody did plan ahead of time, and things went smoothly because of that?
The nice thing about planning and scheduling—we hope in the manufacturing world, I mean that’s what we’re all about—is that so driver was scheduled in. I think the dock appointment was for one. It was a load of material that was needed for production for the next day. It would have taken us about six hours to do a combination of offload the vehicle and the rough quality inspection needed before the material went to the line. So at one o’clock, there was an empty dock door if I remember. The one that I want to talk about, he showed up about 20 minutes later, but we knew that because we were tracking him and he gave us the phone call. He pulls in, backs up to the door, we offload him in probably about 90 minutes, and then he’s out and on his way, and everything that we need is in hand, ready to go. So things that we need to do in the manufacturing space to ensure that we can get parts where they’re needed when they’re needed.
Yeah, and I think, Jeff, keeping from your story is the importance of having visibility in all aspects of your supply chain, including delivery. When are they coming? Are they going to be late? Are they going to be early? So the rest of the team and process can be planned accordingly.
Yeah, and a lot of people—I was going to say assume, but we don’t assume— a lot of people think that someone else is worrying over the delivery or the schedule or the notification when a lot of times no one is, and that’s where visibility falls down. So we need to make sure that we have tools in place that provide us that visibility without us even asking for it. So if we know that a container that is due to the facility in week 45 to begin manufacturing in week 48 has not left the far east until week 41, well now we know 41 plus 6 on the water is 47. So we’re probably not getting that container in our facility until a week 51-52 at best. So knowing that as far in advance through supply chain visibility and tools that can provide that visibility allows the shop floor, the production manager, to say, ‘Ah, the run we were going to do in week 48 needs to be changed. So, what can we build in that week, make sure we have the right resources of both inventory of components and inventory of people, and then move the original week 48 production probably until week two of the following year.’
Thank you, Jeffrey. Cassandra, welcome to the show. It looks like you’re a biker. I see a bike behind you. I just biked 17 Mile Drive in Monterey on Sunday, so it was nice to be outdoors for the day. Cassandra, you have a long background in the manufacturing space. I would like to have you tell us a little bit about yourself and how you got involved in manufacturing, and then also share a fun or personal fact about yourself.
Yeah, thanks for having me, Sarah. So, I’ve worked in a bunch of different industries. My background is actually bioengineering. Went to school for—you know, wanting to be really involved in healthcare and improving people’s lives. Ended up at a couple of different biomed pharmaceutical companies, and then I shifted over to food. Then I went to more of the equipment side, and then I went to batteries. So, kind of all over the place. But in each different experience, I learned a lot about different manufacturing processes, different types of equipment, different challenges. I really enjoy manufacturing. I think there’s a lot to learn there, and it’s a very, you know, in-demand field, especially—there’s not that many women in that field, and I’ve come across that a lot. So, it’s really cool to be a leading woman in manufacturing.
Yeah, one personal fact, I guess, on the concert note that Jeffrey mentioned: I recently was at a heavy metal festival in Copenhagen called Copenhel, and it was really awesome. Four days of crazy Danish metalheads.
Probably, because I’ve never seen them before, Merciful Fate. They are a Danish band, and I got to see them in their hometown, and it was awesome.
So, Cassandra, would like to have you share—maybe we’ll start with your craziest mishap manufacturing story, and then if you can share with us how you resolved it. So, what was the craziness, and then how did you fix it?
Yeah, so most recently, I worked for a battery startup, and anyone who’s worked at startups knows that usually, in the early days and leading into even right before commercialization, there are no systems in place. So, as I was kind of making sense of everything, trying to implement systems for traceability, shipments, inventory, quality, we ended up running into a huge quality issue, rendering most of our product useless. So, with batteries, the tricky thing is that there’s only so much physical evidence that you have when you disassemble a battery to determine the root cause. You can see evidence of shorting, but you can’t really see why it’s happening unless it’s physically like something is messed up in the battery that you can see. So, a lot of the investigation was really pointed towards our supplier. We didn’t really have a change in our process at the time, so we thought, ‘Alright, this has to be a supplier issue.’
So the problem we ran into was trying to extract this information from our supplier. They didn’t really have systems either, so we’re dealing with the Chinese manufacturer who generally pumps out a ton of the same products to different companies, rather than what we were doing, which was more R&D-based. And so, we were changing a lot of parameters and different design changes and stuff like that. So, you know, this was kind of a new space for them. But everything they had was basically So all the data had to be transcribed into Excel and then sent over to us, which would take them weeks to send that information over. And it’s crazy because we’re continually running our line, knowing full well at that point that we would be having anywhere from 40 to 60 percent effective product while we were just waiting for them to give us data. So what ended up happening is you know we collected all this data, we figured out you know what they had on their end, and it wasn’t that detailed, but it at least gave us some indication of all right, could we make an association here with let’s say the raw material that goes into our battery? And we basically ended up realizing that the issue is not on the supplier; it was actually on us. Even though nothing changed in our process or our battery, just kind of started acting differently through our formation process. So, we ended up having to change something in our process, but without the data from the supplier, we actually wouldn’t have even known that it was us because we were under the assumption that nothing had changed. So it kind of gives you a good overview of you know how you might think that everything you’re doing is fine and you might end up putting like a lot of stress on your supplier and pretty much blaming them right out the bat, but without the data, you really don’t know anything. So I think it goes to show that you really need to have that data and you really need to make that analysis before you jump to any conclusions.
Yeah, Cassandra, I would argue one of the most important things supply chain leaders and manufacturers can do is have really good relationships with their suppliers. So strong relationship management skills and having visibility and a working relationship with your supplier is so important when things like this happen.
Yeah, definitely, can’t agree more. If you treat your suppliers like crap and then you need something from them, good luck.
Exactly, I’ve seen this firsthand—managers berating suppliers, demanding them to work overtime to get stuff done, providing last-minute requests and saying, ‘Hey, we don’t need a hundred, we need 500 this week, make it happen.’ And it’s like, you know, they can’t. They have other customers too. So, it’s kind of like you have this tunnel vision and you’re like, ‘We are the only ones that matter,’ but that’s not how things work, right? You have to establish the partnership. You have to—that’s not a partnership if you’re kind of becoming this hostile, demanding customer. So I definitely, definitely feel for what’s happening over in China, especially because American companies tend to push them to their limits, and they already have not really great working conditions and low salaries. So I definitely understand what they’re going through over there.
So, Eddie, what is the craziest thing that has happened to you during a live stream demo event? So keep in mind, Eddie’s coming to us with more of a sales and marketing perspective working in the manufacturing space.
Yeah, so especially during the COVID era, where a lot of individuals were kind of sitting on their hands and waiting for something to look at, we here at Flex, we really just jumped full force, you know, headfirst into the live demo realm, right? And so, it created a good opportunity for us to gather a lot of attention. But, as you know, when you put yourself into a live format, anything could happen, and even more so when you have metal cutting metal, big machines doing things. And so, we were tasked with the world’s largest flow drill. So, for those who aren’t familiar with flow drilling, long story short, it’s where the hole is created, and they use—it’s also referred to as friction drilling—where they’ll take a drill with no threads on it, and you spin it so fast and you heat it up, and it’s at such a high RPM that it melts some of the material and makes some of it longer. So when you go to thread screws in or whatever, to tap those holes, they bond better. So, we were trusted with the world’s largest flow drill that’s ever been run, ever, right in the world. And so, we have this bad boy live. We’re going to test, getting some live footage in it. And the big thing with that, we have to remember that it’s friction-based. So, if you don’t have everything—the proper torque or the proper parameters—anything could happen. The piece of metal could break, the machine could stall. I mean, there’s a lot of things that could happen within a controlled environment. So, we’re running through, and we’re recording this just to see how far we could push it. And we get so close towards the end, and it creates a collar, and we broke the world’s biggest flow drill. And we did it in the middle of a demo. So, I don’t even know the cost of it, but it’s no joke—the largest one in the world, confirmed from the company, because they had specifically given it to us, and they knew we were going to push it. But the fact that it just broke and then having to explain kind of what happened there, it was to no one’s specific fault. Nobody was hurt by any means because it was very controlled. But imagine breaking the world’s biggest tool in a live demo. It was crazy.
Eddie, what does your company do?
So, we’re manufacturers of Machine Tools, as well as long bed verticals like CNC machines, so some capital equipment as well as just some smaller tapping arms. That’s primarily what we do. And then, who do you sell the product to? Who’s your consumer?
Machinists and fabricators across the manufacturing industry. I don’t mean to be super, super broad, but really people who are cutting metal in one way, shape, or form. That’s really the individuals that can utilize our type of equipment.
Well, I’ll have to do a YouTube search to find this demo. I’m very interested to see it break in action.
There you go, Jeffrey. Even though you are the only user of outbound transportation at your company, your procurement team hounds you every week for some crazy thing they call maverick spend. So, I’d like to have you explain first of all, what is maverick spend, and how do you get them off your back from hounding you constantly?
So, this is actually not for my company, but as a part of a solution that our business, Siemens Logistics, delivers. Maverick spend is when our procurement team—your procurement team—has negotiated a contract with a vendor or a series of vendors to purchase goods or services, and someone decides, ‘Yeah, I don’t want it from them. I want to buy it from the guy down the street, or I can have the delivery driver of a different company pick it up later in the evening and still get it there.’ Those two things that mess up the books because we’re only expecting you to buy from approved vendors. But secondarily, it also reduces the amount of spend that a company has with those vendors that have been negotiated. And why is the spend important? Because the spend is what drives the discount that we receive from whoever the service or parts provider is. So, if we are not fulfilling the minimum purchase requirements over a period of time, we’re going to get hit with a penalty and a chargeback for the discount that we did not earn. Never a good thing at the end of the day if we have to pay a supplier back for something that we did. So, it’s again, this is an important piece so that when you’re monitoring your procurement spend, when you’re monitoring your transportation, whether it’s inbound or outbound, that you control, as opposed to transportation that’s being provided by a supplier or picked up by a customer, you’re able to look and see that the only options available to the team are those that we’ve negotiated. And if for some crazy reason they’re able to get around that, it gets flagged and stopped along the way. So, we’re not trying to hold people up. We’re trying to help them make the business decisions that have already been implemented because there are larger cost considerations out there that an individual on the outbound transportation line may not know about. So, Jeffrey, you talked about maverick spend, which is a big challenge at many manufacturing companies because you get buyers who decide to go rogue and have their own supplier they want to use or their brother or their sister or something always seems to pop up. What can people do to try to encourage the team to buy off the contract and actually do what has been set in place by the supply chain team? So what you can do is two things. One, we need to ensure that we have put—and I hate to say IT, but a system technically is IT—that we put the system infrastructure in place that doesn’t allow people to buy off of the contracts, that this is the list, pick from the list, you can’t buy it from anywhere else. Now, if they’re buying off of a corporate card or a P card, then you can work with the card issuer to restrict where those purchases can be made. So, I know recently, I made a rather large purchase at a retail establishment, and I did not realize that my firm has a limit for retail on how much I could spend. So, legitimate charge-off, finally authorized, but the card issuer stopped it because my business gave them the parameters. So, it’s explaining to people why we do things the way we do it.
Oh, and if you’ve got a better supplier, your brother, your sister, your third cousin on your mother’s granddaughter’s side—bring them to us. Because if they are a valid supplier, we would like to plug them into our purchasing portfolio. And I think a lot of times too, something Cassandra said, we tell people, ‘Nope, can’t do it, we have rules, here’s the list,’ but we’re also open to other ideas.
Yeah, change management in procurement and in manufacturing is tough. So I always like to hear success stories and how people navigate that internally. And it’s really—you know, we have to. It’s no different than supply chain visibility, that’s what it is, right? So procurement, as a part of supply chain, manufacturing is a part of supply chain. We just need to be aware of what’s happening in the teams closer than once a quarter, once a half, once every fiscal year. We’ve got to be looking at it so that we, as leaders of whether it’s a small team or a department or the chief supply chain officer, so that we can nip it in the bud, sooner rather than later.
So, Cassandra, Jeffrey talked about maverick, crazy, rogue spending, which happens a lot in manufacturing. Something that also happened quite a bit over the last, I would say, two to three years and is still happening today are supply shortages. So not even being able to get the parts and materials you need to keep your production line running. How did you specifically see supply chain shortages impacting your company, and if you could maybe share a story or example that you lived through because of a supply chain shortage issue?
Yeah, so, so I’m in the Bay Area. We have a port right here, the Port of Oakland. We had several shipments that were just literally sitting at the port for weeks, maybe even months, I can’t remember. You know, we had people calling, talking to people at the Port, saying their hands are tied, saying, you know, there’s a cue basically to unloading shipments and getting them to, you know, UPS or FedEx. It was just kind of a nightmare because you’re literally sitting there, dealing with, you know, government red tape and corporate red tape, and you’re just like, why is this so inefficient? Like, why can’t we come up with better ways to handle this issue? And I know that, you know, a lot of people were a resource. There were a lot of resource constraints, right, which was contributing to it. But I think what we had to do really is just try to get to the right person, to figure out how we can streamline things. Because oftentimes, a small company, your hands are tied. You don’t really have the ability to pull the strings that, let’s say, a larger company does. So, we had a lot of people working late nights, making calls, sending multiple emails. I’ve done that myself, especially when things are coming from China and you have, you know, import-export issues, documentation that isn’t filled out right. It ends up slowing everything down, right? So, we ended up just kind of powering through, knowing full well that we are a small company, but, you know, we just had to kind of deal with it. And it did end up affecting our manufacturing line a bit, but because we were so proactive about ordering, you know, our material ahead of time and just ordering a ton of it, we didn’t see too much of that effect. So, we were lucky in that sense. And I do feel like things are slowly coming back to somewhat of a normal state. But with the volatility of the situation in Europe, you know, any new developments that can create fear, panic, on top of the existing pandemic issue, will continue to affect supply chains. So, we’ll see how that pans out.
Cassandra, you mentioned things getting stuck at the port in LA. What were you buying overseas?
So, my most recent company, we were buying dry cells. So, that’s the battery before it’s a battery, basically. It’s just a cathode, anode material layered together to make, you know, a battery cell. So, we were also buying raw lithium. So, lithium itself has a lot of regulations involved, so having things that have a certain class, dangerous good class, also create more shortages or more issues for us when transporting overseas.
So, one of the things, Cassandra, one of the other things you mentioned is that you were buying excess, so a lot more raw materials than you normally would have. As a small business, that can have a huge impact on your cash flow, having to outlay so much cash up front where you may not actually see revenue for 6-12 months down the line. How did you guys manage that balance of figuring out how much to order versus the impact on cash flow and not having too much where you have just massive amounts of product or raw material sitting around?
Yeah, I think the intentions were good there. It was, you know, we can’t afford to not produce. Even though, and at the time, we were dealing with these manufacturing issues too. So, it’s like, you know, we were just running full speed, regardless of the result. And I don’t know if that’s the best way to do it, but as a small startup that has tight deadlines and crazy milestones, we don’t really have that much of an option to slow down. And every batch that we made, we had to learn from it and figure out, you know, what was going on and so forth. So, having that excess inventory actually helped us come to a better conclusion as to what was going on. But I do feel like there’s a balance, right? We were starting to run out of room. We were in a small lab scale at the time. So, when you have so much inventory, plus you’re starting to tack on a lot of different lots from the supplier, right? So, like, there’s a lot of different variability of the product you have in inventory, plus you have to consider if there’s any sort of negative effect on it if it sits around for too long, right? Using the FIFO method, you still end up with so much in your inventory that you can’t produce. Right? At a small company, you can’t get through all of that in a reasonable time. So, there’s a lot of that consideration to be had.
Jeffrey, I think you’ve experienced issues with things being stuck at ports as well.
Cassandra was speaking, it brought up bad memories for me. And the one thing that I have wondered about for years, that COVID has only exacerbated, is that before a ship sails from a foreign port, specifically in Asia, they’ve got to send the ASN, the advanced shipping notice, to U.S Customs and Border Patrol. ‘Here’s what’s coming in, here are the number of containers, here are the hazardous…’ A lot of detail. So, why is it that one part of the government, Customs and Border Patrol, has that information, but yet the port operators do not have that to be able to schedule ships in a timely manner? So, we’re waiting, you know, the port says they don’t have the paperwork or that they didn’t get enough notification. It already went out. Why aren’t you linking into a system that already exists in a process flow that already exists? It’s because there’s no direct connection between the three entities that are involved in all of the ports, right? The U.S Customs and Border Patrol, the local governmental authority, so in this case, the Port of LA and Long Beach, and the third entity, which a lot of people either don’t know or forget about, is that most of the terminals are privately owned and operated. So, they are not all linked together. So just because you are delivering a ship into the Port of Los Angeles, you’re still going to have to work with the terminal operator where that ship is docking to get your goods off.
Jeffrey, do you think all of this craziness with port issues and transportation challenges in the manufacturing space has caused more companies to buy things locally and/or manufacture more things internally? Is that something that you’ve noticed over the last couple years?
I think that, you know, so we’ve affectionately used the term reshoring or local shoring. I think ideally, we would all like to be doing that. It is why the current presidential administration recently passed an infrastructure bill specifically supporting building chip manufacturing facilities. So, IBM just broke ground on one in Poughkeepsie, New York, that is a hundred billion dollar job that will produce chips starting, I believe, in 2030. Intel has a plant going up in Phoenix, TI has one going up in Texas. And the challenge is, try as hard as we can to source locally, some components are just not available. Some components never will be available because we cannot produce them at a price low enough to make it profitable for someone to operate. So, I think you’re always going to buy from overseas companies, plastic tier 3, tier 4 supplier parts, cathodes, diodes, screws, because to spin up a factory here is just out of control, and no one can afford to do it.
As Cassandra was talking about buying excess material, we used to talk about a very proud concept called JIT (just-in-time) manufacturing, just-in-time delivery. Doesn’t exist anymore because we cannot ensure the on-time delivery in full or at least near full order capacity to a manufacturing line because of what’s happened over the past two and a half years. And it’s not just COVID. I mean, the Ever Given in the Suez Canal had absolutely nothing to do with COVID, just happened at the same time, so it all got lumped in together. There was another ship from the same company that ran aground in Baltimore earlier this year, and those things happen. We don’t think about them, we don’t talk about the fact that there are container ships coming across the Pacific Ocean that may lose eight, nine hundred thousand containers in the water, and nobody knows until the ship docks what actually is lost because they don’t know which containers they were. But back to reshoring and localization, I think everybody would prefer to do that. It also helps our manufacturing base get to what I think everyone is striving for, and that’s a better green footprint. So if I can source it locally, if I can set up a shop two miles away and then do milk runs back and forth, my carbon footprint is minimal, and we’re all striving for that.
Hunter, one of the other things that’s really unique about your background is a lot of time working at startups in the manufacturing space versus larger, you know, US or global companies. How does the startup world compare to large manufacturers when it comes to supply chain challenges? And then maybe talk a little bit about what you found to be some of the hardest parts about working at a startup in the manufacturing space because it’s a very, very different world.
Yeah, it definitely is. So, the first thing that comes to mind is that, like I kind of mentioned earlier, but we’ve just, you know, as startups, you don’t have the buying power that large companies have, right? You’re dealing with orders in the hundreds, while larger companies are dealing with orders in the thousands or hundreds of thousands. The cost is not up to par, the suppliers have other top urgent customers, it takes time to establish the relationship with them and convince them that you’re worth it, you’re worth expediting, you’re worth making changes in their manufacturing process because ultimately it comes down to money, right, and who has that buying power. So, that’s why it is important to build that relationship with them and really partner with them. The thing that’s interesting with startups is I think suppliers tend to treat you differently if you have considerable financial backing. So, if you’re a company that just got bought out or just got some crazy funding, then they start to pay attention to you a little bit more. So, that does help, but not every startup does have that, right? Especially in the early days, you’re not really there yet, and you still need to develop this partnership early on and make the company feel like you’re worth it, like your product is actually going to make it. So, there’s that to consider. And then I would say in terms of the challenges overall, I feel like my repeat theme and what I’ve seen over my career is that a lot of startups forego implementing necessary systems until it’s a little bit too late. So, we’re talking ERP, MRP, PLM, MES, those kind of systems that really help set the groundwork for companies. They usually start implementing them once things are already too chaotic and disorganized, but this is a mistake. It takes a lot of thought and planning to set up and select the right systems. You may even find yourself customizing your own system and developing your own thing, which we did at my last company. And they offer a lot, right? They offer a lot of visibility into the product they’re making, the shipments, the inventory, the Quality Systems, where things are held up in the process, what process issues you’re having, etc. Really building out your bill of materials, which a lot of companies don’t do in the early days. So, having these systems in place before you start hiring tons and tons of people and people start getting on board into the company not knowing really what the structure is and not knowing the visibility into the overarching company and the whole supply chain, I think that’s a mistake, not having that implemented sooner. And it also creates a lot of inefficiencies because your employees are spending significant time tracking down this information, consolidating multiple spreadsheets, figuring out where things are. So, having that overall visibility into the supply chain a lot earlier in your manufacturing process helps you optimize and fill in the gaps as needed.
Yeah, I always like to say, if you’re managing your supply chain with email and spreadsheets, there’s a problem. I feel like there’s just tremendous risk when that’s how you’re communicating with suppliers and storing your data and information.
So, Jeffrey, another example that we chatted about when prepping for the show that I think is relevant for us to talk about today: So the manufacturing line is all set to go, and then you find you’re actually missing components. What is wrong with this picture?
Well, I could just say everything Cassandra just said because it is, you know, we haven’t planned, but it comes back to something we discussed a few minutes ago. It is the lack of visibility into the entire supply chain cycle that causes businesses to have a lot of anxiety at night. So if you are asking a manufacturing manager what’s keeping up at night, he’s worrying if he’s going to get the raw material he needs to build tomorrow because he’s got 2,000 people on a factory line that he’s got to pay one way or the other. Because in today’s environment, we don’t have a lot of opportunity to second-source similar items because everyone is trying to source the same, whether it’s a battery component, a chip, a piece of plastic hardware, etc. If you’re not talking to your suppliers and you’re not receiving the information from your suppliers on a timely basis, taking that data into a system and viewing it on a dashboard that says this order was supposed to be here last week, it’s not here, where is it? Instead, if you had a system that would automatically grab that information, show you a red flag that says this didn’t get delivered last week, kick off a notification to the supplier to find out, hey, what’s going on? Why didn’t I get it? And it’s a partnership, so as Cassandra said, it is a partnership between supplier and manufacturer. But at the end of the day, without the manufacturers, the suppliers aren’t in business. And it’s always that who’s driving the horse? Is it the cart or is it the driver? But put systems in place, and you can have systems that sit on top of your ERP system. So, for example, we offer solutions that will sit on top of ERPs like SAP or Oracle that will keep that system clean while still taking in data from diverse sources and scrubbing it. As much as I hate to say that, there are people who are still doing purchase ordering with foreign suppliers via fax and email. It still happens, you know, and it depends upon how far down the tier you’re managing. It should never be happening at tier one, but if you’re managing down to tier three or tier four, those are really small suppliers who probably do not have an IT infrastructure that can support that.
Eddie, what are you and your team experiencing this year from a supply chain challenge perspective? What would you say you and your team are struggling with the most?
Well, really, I heard someone mention lean manufacturing previously, and that’s something that I feel like, without me being in the supply chain world, is this got to be something that’s so difficult to maintain, especially given, you know, when the pandemic hit and now, are we, some individuals say we’re still fighting and pulling back from that. So just really trying to find that sweet spot, especially as we kind of revitalize and update some of our new products and AD capabilities. In order to add those new capabilities, there’s additional components, and if you need additional components, you need these different parts and things to be sourced in. And even though the vast majority of what we do is right here in the US, we do source some things overseas, which, as you know, can always cause a little bit of a bottleneck. But I will say that I think that we, as a country, have done a really good job of not only reshoring but also just being able to be more strategic with our suppliers and put a lot of pressure on them in order to really shake out the market.
Well, I want to thank Cassandra, Jeffrey, and Eddie for joining me today on our monthly Manufacturing Woes Show. If you would like to reach out to any of them, feel free to shoot them a note on LinkedIn. They have lots of supply chain wisdom to share, also lots of crazy manufacturing stories. Our next show will take place on November 8th at 1 PM Eastern. I will see you all again next month.