Domestic Manufacturing in a Pandemic: All Hustle and Grit

By Mitch Cahn, Unionwear – September 24, 2021
Domestic Manufacturing in a Pandemic: All Hustle and Grit

Thanks to the pandemic, “Made in USA” manufacturing has become more than a buzzword or feel-good catch phrase; it is now an imminent national security priority.

While saying we want to bring manufacturing back to the U.S. sounds good, doing so successfully — and profitably — is not easy. For more than 25 years, I have run a unionized manufacturing company in Newark. In that time, I have learned that Made in USA manufacturing is not only possible but inevitable, especially given recent events. Manufacturers can succeed here, even with relatively high labor costs. The key to domestic manufacturing success isn’t cutting corners or hiring the cheapest labor. Rather, it’s embracing a lean manufacturing mindset.

Benefits of Lean Manufacturing

Supply chain management is daunting during a crisis and even more challenging during times of shortages. During the pandemic, we had both. As a result, many New Jersey manufacturers leaned into lean manufacturing and successfully pivoted their businesses towards products and services to stay afloat during the pandemic.

The first thing lean manufacturers must do is constantly free up bottlenecks. Every system has a bottleneck since a production line can only produce as many widgets as its slowest operation. Speeding up the slowest operation automatically makes the next-slowest operation the newest bottle­neck. Even if the production line is automated and perfectly balanced — unless the sales team is selling and the administrative staff is processing orders at the same exact rate — there will be backlogs and shortages, overproduction and underproduction. Overproduction sinks companies. Underproduction sinks economies.

When the economy is humming, bottle­necks caused by completely outsourcing manufacturing to another continent are invisible because it’s just throwing money at the problem. In the spring of 2020, our health care system experienced a string of bottlenecks that could not be solved by throwing money at it. Shortages of masks, gowns and respirators led to a shortage of healthy medical professionals and their ability to treat patients, causing significant bottlenecks across the supply chain.

For our business, in order to pivot into manufacturing protective equipment, we had to face and anticipate these constraints and develop workarounds, such as:

  • Buying from other industries
  • Working with competitors and our labor union as business partners
  • Thinking way outside the box, like asking Newark’s mayor to make a PSA on the radio to find home sewers who could work for us in the absence of available workers.

None of this could have been possible if we hadn’t already had a lean manufactur­ing mindset. This lean mindset was a huge asset to us during the pandemic, as we were able to pivot quickly to supply healthcare workers with PPE while keeping most of our workforce safely employed.

I couldn’t pretend to know anything about requirements on medical textiles to someone who does. What Unionwear had expertise in is hustling — hustling in sourcing, prototyping and delivering — because that is the only way we are able to thrive despite all our competition coming from low-wage countries. So, when the short-age in personal protective equipment (PPE) hit, we didn’t sell face shields. We didn’t even sell “Made in USA.” We sold hustle.

Thinking Outside the Box

Thinking outside the box meant taking big risks. Whether it was a state, military, hospital, medical or union executive who asked us to help, we decided to pull back the curtains and let them know every single step we were going to take to solve their problem. We shared the unexpected obstacles we might encounter and how we would counter them, and then we encouraged the customer to share those ideas with other vendors they were working with — and to not hesitate to contact us. Under normal circumstances, we are loathe to give away our trade secrets. But, in this case, sharing that information might mean that someone I know is less likely to experience a short­age of medical professionals if they get the virus next month.

Furthermore, during the pandemic our workstyles changed materially. For one, dedication to process became the only way for administrative workers to work remotely while factory workers worked in house. We had tried for years to eliminate paperwork and the need for physical folders, and the pandemic got us there. In addition, there was far less supervision. Fortunately, our workers really stepped up and took on a lot more responsibility. There was a new focus on safety and accountability as well.

The pandemic made budgeting difficult and projections nearly impossible. Early 2020 was all about survival. But as it became clear that the government was going to backstop our failure with Paycheck Protection Program (PPP) loans and tax incentives, we became eager to invest in the future and build scale. We built an entirely new level of government business during the pandemic while we waited for our event-related merchandise business to return. And when that does return in full, we expect to have a much larger business.

Lessons Learned

The most important result for our business was the idea that pivoting into a new market or line of business is always possible, even when times are not desperate. We have become much more open to suggestions for building new production lines for a single client or for a finite time period. We also are far more focused on results and less on facetime for our managers and salespeople. Finally, our success in predicting and responding to shortages has us constantly on the lookout for black swans and random events that can lead to opportunities for growth.

Ultimately, it was our hustle, grit and determination that got us through the pandemic.

 


Mitch Cahn

Mitch Cahn is president of Unionwear, a manufacturer of union Made-in-USA hats, bags and binders for the promotional, fashion and uniform markets. He can be reached at mitch@unionwear.com.

This article appeared in the Fall 2021 issue of New Jersey CPA magazine. Read the full issue.