COVID-19 Drives a Need for Agility and Compassion

As a management challenge, the COVID-19 pandemic has few equals. Manufacturing companies around the world have been faced with the paradox of keeping employees safe and supporting customer requirements.
 
As an electronics manufacturing services (EMS) provider with facilities in Portland, OR; Milwaukee, WI; and Tecate, Mexico, we’ve managed to navigate this learning curve with all but one facility staying fully operational throughout the shutdown period.
 
Supply Chain Challenges
We first saw issues in late January in our supply chain when China extended its lunar New Year holiday shutdown period. After two years of navigating supply chain constraints driven by supply and demand imbalances, our supply chain team was ready to address this disruption and we were able to keep our raw material pipelines full. As China recovered, India shut down, driving our team to find printed circuit board fabrication options within the U.S. and other sources for custom components such as transformers. Outside of spot shortages, the materials side of the equation has been the easiest element to manage.
 
In March, we realized that U.S. facility shutdowns were imminent. Our medical customers in California were the first to send us essential supplier letters. Our factories build a variety of essential products including printed circuit board assemblies (PCBAs) used in dialysis of critically ill patients, laboratory equipment used to clean glassware used in glove boxes in biological containment facilities, material handling system components, alternative energy products, and a variety of critical industrial infrastructure products. Our prototype division was seeing prototype orders for several medical products as companies scrambled to come up with alternatives to products built predominately in China.
 
While our number one priority was keeping our employees safe, we realized that disappointing our essential product customers wasn’t an option. We were one of the first companies in Oregon to request essential status, documenting the need with letters from our customers. We were able to meet the requirements for essential status almost immediately. Our Milwaukee facility also met essential business status requirements. At that time, there were no restrictions in Mexico.
 
Our management team began to strategize on the best safety measures. We immediately created a task force to research, monitor, and implement appropriate processes. We had begun low levels of mitigation in late February such as limiting outside visitors and eliminating nonessential business travel. We needed to develop a facility-by-facility plan as different regions had different regulatory constraints, building features and worker interactions. We were also concerned about the shortage of personal protective equipment (PPE) such as masks. A team of our employees plus their friends and families in our two U.S. facilities volunteered to sew masks at home. The company purchased the material and the volunteers sewed enough masks to ensure each employee had at least two. Some of the social distancing safety elements implemented in our U.S. facilities included:
 

• Banning all outside visitors.
• Implementing work at home options for employees not required in production activities.
• Using signage in break areas to show employees which tables and seating options needed to be vacant to ensure social distancing.
• Staggering breaks and meal times to ensure the breakroom/cafeteria stayed at reduced occupancy levels.
• Installing hands-free soap and paper towel dispensers in rest rooms.
• Distributing employee lockers throughout the facility to provide acceptable spacing when employees were accessing or storing personal items at shift change.
• Designing and installing moveable plexiglass screens on equipment such as x-ray equipment where an operator and an engineer might need to be closer than six feet apart to view an image.
• Implementing one-way hallways to ensure adequate spacing.
• Frequently cleaning common areas and workspaces.
• Assigning social distance monitors who did facility audits several times a day to ensure employees were maintaining appropriate distances and wearing appropriate PPE.

 
Our Mexico facility had its own challenges. Mexico’s COVID-19 infection is running about a month behind the U.S. The state of Baja California, where our Tecate facility is located, is considered a red zone in terms of infection numbers. We shut down manufacturing operations in our Mexican facility voluntarily on April 9, leaving a small crew to do preventive maintenance on equipment and ship finished goods out. The following week, our management team met with Mexican authorities and got approval to restart operations provided there were no more than 50 employees per shift. Additionally, under Mexican rules, employees with known co-morbidities cannot be brought back to work at this time.
 
The Tecate facility is part of campus run by a shelter company with which we have a strategic relationship. Our facility had been expanded the previous year for anticipated growth in production. The team used the recent facility expansion plus available space elsewhere in the campus to better spread employees out for production and breaks. Under Mexican law, every employer with more than 100 employees must have an infirmary and a nurse onsite. As a result, daily temperature checks using an infrared scanner are done on all employees. In Mexico, many employees do not have personal vehicles, so employers contract with bus companies to provide transportation to and from work. Our team contracted extra buses and had the bus company install plexiglass shields between seats, plus limit one employee per two-employee bench seat to maintain appropriate spacing. Many of the other mitigation practices mentioned earlier were also implemented in Mexico at the same time we implemented them in our U.S. facilities. Employees in all facilities received training in COVID-19 mitigation practices and proper use of PPE.
 
Adapting to Stay Current
From a management perspective, the biggest challenge has been that the playing field is constantly shifting. As one challenge is met, new ones arise. For example, as the pandemic has progressed both U.S. and Mexican officials have changed regulatory requirements, which drives a need for continuing management review of new regulations. To date, the mitigation procedures implemented as a result of team brainstorming at the beginning of the crisis have met or exceeded evolving requirements. Another challenge has been shifting customer demand. In one case, a medical customer placed a single order that exceeded their typical annual volume. In other cases, we are seeing doubling of normal demand. 
 
Focusing on the human factor has been critical. One of the biggest challenges in the Milwaukee facility is that many team members are single parents. When schools shut down it created childcare challenges. The company had started a cross training initiative at the end of 2019 to enable production workers to shift among workstations as production demand changed. Documentation was also enhanced. As a result, when the schools closed, we were able to offer our production team the ability to move to a different shift that would better align with their childcare schedules.
 
Conclusion
The COVID-19 pandemic has definitely tested our company’s overall business strategy, our management team’s ability to manage evolving situations, our purchasing team’s creativity in dealing with unprecedented demand shifts and spot shortages, and our employees’ ability to balance work and life challenges. It has tested our customers and suppliers, as well.
 
The best lesson we’ve learned in this process is that approaching the situation with agility, flexibility and concern for others, works well. We’ve seen shifts in business rather than a large drop in business. In fact, we are hiring new employees as a result of continuing business stability. The concern we’ve shown for employee welfare and work hour flexibility has been returned by employees who are committed to ensuring our essential production gets out. We’ve also seen that strategic decisions we made well in advance of COVID-19, such as worker cross-training, systems enhancements, and facility expansion are paying unexpected dividends. Ultimately, we are all in this together. From our perspective, common sense, creative thinking and concern for others is the best way to meet this challenge.
 

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Rick McClain is Milwaukee Electronics’ president and chief operating officer (COO). He joined Milwaukee Electronics in 1999, serving as general manager of the Company’s Portland, Oregon facility prior to being promoted to COO in 2016. He was previously chief financial officer of Electronic Controls Design, Inc. He earlier served as controller and operations manager at Dynacast Inc., managing an ERP implementation and turnaround activities in two divisions. He received a B.A. degree in Accounting from the University of Oregon.