A New Normal
Here in Canada, vaccination rates are soaring while Covid case rates continue to fall. While our reopening may be lagging behind what’s happening in many parts of the U.S., businesses and manufacturers across the continent are talking about returning to normal. But maybe returning to normal isn’t possible or maybe there’s a better idea. At Algood, there are many ways that we are using what we learned in the past 16 months to create a new and much better normal. Here are just some of them.
Employee Health, Safety & Scheduling
Gone are the days when no one cared about employees who come to work with the sniffles or when anyone can enter the plant. We’ll be protecting our surroundings by doing a lot more health education and restricting access to outsiders.
The last 15 months have proven that people can be productive working from home. Even before Covid, we had begun discussing the possibility of having our customer service reps and other office staff work remotely. We knew that it would save them the stress of traveling to and from the office while providing more time to meet the needs of their families. We’re committed to making it an option for those staff members who aren’t totally Zoomed-out.
Travel and Customer Meetings
Covid has proved that you can achieve outstanding customer service online. It has also has exposed the many costs of travel. We’re always looking for the best way to meet our customers’ needs and now we know that a Zoom call might be the best solution. However, a lesson we learned from Covid is that personal interaction is irreplaceable. Rest assured that I’ll still be booking many flights to see our customers.
Disaster and Recovery Planning
In our very early discussions about Covid, I urged our employees to think about it like a fire – that spreads quickly and does increasingly greater damage. Now, we understand that we really have to be prepared for any disaster and have recovery plans in place. What happens if a tornado rips through our plant or if we are the victims of a ransom ware attack? We have put a disaster and recovery plan in place and are meeting every six months to review and refine it.
Supply Chain Management
The popular thinking on this is that businesses now have to avoid putting all their supply chain eggs in one basket because Covid has revealed just how vulnerable companies are to their suppliers. The other side of the coin is that sourcing supplies from multiple vendors affects prices. Making a company a sole source vendor may reduce the costs and allow manufactured goods to be priced more competitively. We’ll be looking at both sides of the coin to ensure that our customers get the best service and the best possible pricing.
Pre-Covid and during the Trump administration the idea of producers pivoting to North American manufacturing was gaining traction. Now we are seeing that the real price of over-dependence on Asian markets is unsustainable lead times and undependable quality. Not only are more businesses repatriating their manufacturing plants, but we have more customers insisting on goods that are 100% North American made – and we expect both of those dynamics to continue.
Just-in-time (JIT) manufacturing
Lean or JIT manufacturing was a widely accepted practice pre-Covid. The idea was that by receiving goods only as they are needed for production, inventory costs and wastage could be reduced. The obvious downside is that all those benefits can be nullified by delays in the supply chain. The predicament is that post-Covid, you can’t count always on a producer’s ability to provide supplied goods exactly when they are needed. No matter how JIT fits into the future of the manufacturing sector we’ll be ready to meet the needs of our customers.
In many ways, we will be a better supplier and a better manufacturer because of the lessons learned from Covid. A new normal will be a very good thing.
Wishing our distributor partners, customers, colleagues and suppliers a safe and relaxing summer – and much success in the balance of 2021.
The Vaccine: A Manufacturer’s View
These days, everyone is talking about Covid-19 vaccines. It’s a particularly hot topic here in Canada because our supply of vaccines coming from a Pfizer plant in Belgium has been significantly reduced this month. While there are healthcare, political and business aspects to the discussion, I can’t help thinking about this vaccine issue from the perspective of a manufacturer. And that leads to some pretty eye-opening perspectives.
Pfizer’s vaccine supply to Canada is being produced in a plant located in Puurs, Belgium. This is a manufacturing facility that was, until this year, producing 400 million units annually. Having become the centre of Pfizer’s pandemic response in Europe, it is now expected to deliver about 1.5 billion doses of the Covid-19 vaccine by the end of 2021. Consider that the Pfizer vaccine was just approved in December. That’s a 400% increase in output with next to no lead time.
Canada’s supply reduction is a result of modifications being made at the plant in Belgium to increase capacity. To achieve a 400% increase in output, there is no doubt that new machinery would need to be added and doing that without impacting output is impossible. Having seen what happens when we add machinery to our plant in Toronto, I can only imagine the disruption being caused by adding equipment in Belgium. Frankly, it’s impressive that supply is only being cut by 25%.
The investment Pfizer is making in this facility is enormous. Production equipment is very expensive and very specialized. There are tens, if not hundreds, of millions of dollars of machinery on the floor in Belgium. In addition, there are over 2,000 workers at the plant in Puurs. If I lie awake at night thinking about the capital investments we are making at Algood, the people at Pfizer must never sleep.
This is a facility that is running 24/7 where every single unit produced is precious. There is no room for any delays and yet, as a manufacturer, you know there will almost certainly be glitches. All it takes is one simple bearing to fail and a production line can be down for hours, if not days. Production designers must come with up a plan that will meet targets despite those inevitable contingencies.
Beyond the equipment and the output, there are many important considerations. For example, 1.5 billion doses annually is over 4 million doses daily. You need an immense amount of space to store even one day’s production before it is shipped. Now, add to the challenge the fact that the Pfizer vaccine must be kept at -70ºC, which requires specialized freezers. In addition to all that, the facility must be kept perfectly clean to preserve the sterility of the vaccines and all Covid precautions must be maintained. It makes storing a day’s worth of caster production look like a walk in the park.
The supply chain logistics are mind-boggling. Besides the chemical ingredients in the vaccine, there are bottles, protective syringe caps and labels that must be available in never-ending supply. Any supply chain gap has the potential to halt production. While Pfizer has achieved some vertical integration, managing the supply chain is a thankless job.
Finally, I think about the pressure being put on Pfizer. Its CEO is fielding calls from political and healthcare leaders, business partners and investors while presiding over the efficient operation of the company. I recall the pressure we were under at Algood supplying casters in the early days of the fight against Covid. Fielding demanding and panic-filled calls at literally every hour of the day, the stress was almost unbearable. I can’t imagine how that effect is multiplied when you are supplying the world and my respect goes out to those leading Pfizer.
You see, while there are many facets to the discussion about Covid vaccines, there are some that can only be seen by a manufacturer.
Business travel & Covid preparation
This past February, the members of our management team looked at me like I was crazy as I rattled off all the measures that I thought we should immediately implement. I had just returned from two weeks of travel overseas and in the U.S., and from what I witnessed it was clear to me that the coronavirus (it wasn’t called Covid yet) could potentially have devastating impact. While business travel can be a real pain, but there is also no question that my travel in the weeks immediately before the onset of the pandemic provided me with the foresight to preserve the wellbeing of our employees and the viability of our company.
In late February and early March I found myself in places that were being dramatically affected by Covid. People were getting sick and those who weren’t were getting anxious. Governments were scrambling to respond and it was obvious that something huge was going on.
When I returned to Canada, I was really disappointed to see how little was being done by governments to prepare for a pandemic. That made me all the more determined to ensure that Algood and its people would be as safe as possible.
I began our management meeting by saying, “we have to treat this like a fire.” Fires spread quickly and can be unbelievably destructive. It took a while but I convinced the team that we needed to act and then the ideas began to flow. There is no question that the measures we put in place six months ago were the key to our ability to survive. And most of those measures are still in place today. Here’s what we did.
- We compressed the work week from five days to four. That reduced the amount of time that staff we were in the plant and office, minimizing their travel to and from work
- We expanded the night shift encouraging people to move from day shift to night shift to lower exposure to fellow employees
- Masks became mandatory for all employees
- We ordered as much PPE as we could get
- Because masks were already in short supply, we created our own bandanas for employees to wear
- We installed workspace barriers to protect employees
- We began planning for moving all non-plant staff offsite and determining how to manage the company remotely We began planning for moving all non-plant staff offsite and determining how to manage the company remotely
- The building was sealed. No one other than employees could enter for any reason
- Knowing that our supply chain would be vulnerable, we began seeking out alternate sources
- Contingency plans were developed in the event a staff member became infected including the communication and safety protocols and a standby request to a company that would sanitize the entire plant
- A schedule of health and safety meetings was put in place
As I said, most of these measures are still in place. In fact, at a recent health and safety meeting, employees told us they wanted to continue with this approach. In hindsight, there is very little, if anything, I would have done differently and the reality is that this crisis is far from over. We remain vigilant and are asking our employees to do the same.
Thankfully not one of our employees has fallen ill with Covid and business is strong. While there is undoubtedly some luck involved in that, I am certain that our actions have had impact.
Maybe when I can resume traveling, I’ll be a little more appreciative of the foresight and insight that it can bring.
Doubling Down in a Pandemic
You might think that a global pandemic is a time to play it safe in business. You know, hold the line of spending. Don’t make any commitments. See what tomorrow brings. But that’s not the approach we are taking at Algood. Tony Robbins said, “If you are not growing, you are dying.” We think that’s true even in the middle of a worldwide crisis. And that’s why we are doubling down on key elements of our business, like engineering, capital and R&D.
Within a week of the lockdown measures being introduced in early March, we were in 24/7 manufacturing mode, building casters for hospital beds, IV carts and other essential healthcare applications. Our fully integrated manufacturing facility and our people were stretched to the max. For me, it may have been the most stressful eight weeks in over 30 years in this business. As vendors scrambled to get the components that would allow them to meet the demand for medical equipment, I was answering calls and emails at all hours every day. Even, in the midst of that insanity, we continued to think about how we should be growing our business.
Then, almost as if a tap had been shut off, business became eerily quiet. Almost nothing was happening. There were very few orders and even less calls or inquiries. It was certainly a time when many business owners would sit firmly on their hands, hold their breath and do nothing until sales picked up. But we forged ahead with our business development plans.
Now, as more businesses are coming on line and demand is beginning to grow, we are ready to meet the needs of our customers. Here’s how we have been investing in the future:
Engineering – We enhanced our technical capability by hiring an additional engineer and providing him with the necessary equipment. We recognize that our ability to design products that meet both customer requirements and exacting standards requires particular expertise.
Manufacturing Capital – The efficiency of our production and assembly processes will be dramatically improved through the recent acquisition of a robot and more to be added in the fall. Our ability to deliver high quality products in the timeframes needed by our customers is at the heart of our success.
Product R&D – We have at least ten new products or product enhancements at various stages of development. New caster and wheel announcements will begin in the late summer, and along with announcements of production enhancements, will continue into 2021. Great looking products built to last and that precisely meet customer specifications is the foundation of Algood’s reputation.
This isn’t our first rodeo when it comes to dealing with financial uncertainty. In response to the economic downturn of 2008, we re-examined our business model and took a path different than many of our competitors. We decided we need to make the investment that would allow us to become more efficient, more design-focused and better leverage the advantages of being a fully integrated manufacturer. We learned a lot from that experience and it has guided our approach to the current situation.
Now, as a result of being way more proactive than reactive, we are poised to be a leader in the caster industry as the economy reopens. By doubling down on our investment in the future, we are seeing well beyond the current challenging circumstances and laying the groundwork for our continued success.
We hope that all of you are staying healthy and safe – and that business is slowly getting back to normal. When you are ready to look at local source manufacturing and innovative new products, please be sure to contact us.
Prepared for the Pivot
The cascading financial impact of the COVID crisis continues to mount. But emerging from the economic repercussions will be a much larger and more pervasive dynamic. Businesses reflecting on the overwhelming dependence on offshore providers that was revealed in the past months will begin looking toward more stable and reliable supply chains. I believe there will be a colossal collective reshoring pivot as buyers seek out North American suppliers. At Algood we are prepared.
In March and April of this year we went through the most demanding and stressful period of production in our history. To supply casters for critical healthcare applications, we became a 24/7 operation. With lives hanging in the balance, every request was more urgent than another. Beyond allowing us to do our part in the fight against COVID, the experience provided us with valuable insights into how can achieve even greater manufacturing efficiency. It was also presented me with an eye-opening perspective on the state of the global supply chain.
For decades, producers and providers have been attracted to the incredibly low prices offered by Chinese and other off shore suppliers. Long lead times and sometimes inconsistent quality were seen as a fair trade off for the pricing, and therefore competitive advantage offered by a low-cost supply chain.
But in the past two months, attitudes seem to be shifting. There has been an awakening to just how dependent North America was on goods from China and how detrimental that is. When we needed everything from PPE to antibiotics to respirators – and yes, casters – in an instant, we realized that we didn’t have that capacity. It took emergency measures to re-configure manufacturing facilities to meet demand and even with that, it was necessary to have supplies delivered by air from China at absolutely exorbitant rates. So much for the price advantage.
The perils of using offshore suppliers is something we at Algood have been hearing about and writing about for years. To be clear, we are not motivated by politics. Rather, our opinions about the need for reshoring were and are primarily a result of what we have been hearing from our customers.
As early as December 2015, I wrote this in one of my regular blog posts, “Customers just don’t want to wait months to receive product manufactured offshore that ends up being sub-standard – even if they can save money.”
And in September of last year, after spending a number of weeks on the road visiting customers, I observed, “There are frequent delays in delivery and the product [produced offshore] received isn’t always exactly as ordered or built to the necessary standards. Companies buying casters are working on tight deadlines and tighter budgets. Goods that can’t be used or late deliveries have a cascading impact on production and sales. It’s not surprising then that customers are looking for suppliers that are manufacturing in North America.”
Now there appears to be a collective aha! moment amongst buyers and suppliers as they realize just how unstable and injurious offshore supply chains are. There is a looming large-scale pivot that in the coming months will see many companies rethinking purchasing policies and seeking out North American manufacturers.
At Algood we are ready. With our fully integrated manufacturing facility, we are able to produce standard items as well as creative caster configurations, often in less than a week. Our internal design and engineering teams ensure that superb quality is always guaranteed. Because we are in control of the manufacturing process, we can provide competitive pricing.
We understand that many of our customers are just re-emerging from lockdown and may have to confront challenging circumstances for a while. But we have great confidence in their diligence and ingenuity. They will prevail. When they are ready to confront the cold reality of their supply chain situation and pivot to North American providers, we’ll be there to help, support and to stand shoulder to shoulder with them.
Mental Health: It’s about time
I remember when I was a child my parents would occasionally talk about someone who had a nervous breakdown and was in the hospital. Or, there was a kid at school who was away for a few weeks with a mystery illness. Not only was mental health a term that wasn’t discussed, it was totally misunderstood. But thanks to initiatives like Let’s Talk by telecommunications giant Bell Canada, much of that has changed. As a business owner, an employer, a family member and just as a member of society, I say it’s about time that we talk about mental health.
It’s important to talk about mental health and it’s important for those suffering with mental health issues to be able to talk about themselves. It’s only when the stigma surrounding mental health issues is lifted that people can feel comfortable asking the questions that will lead them to the care that will help.
You’ve got to give Bell Canada a ton of credit for what they’ve done. When they started their Let’s Talk initiative in 2010, mental health wasn’t exactly an everyday topic. People suffering with anxiety and depression were more likely to keep their conditions to themselves. But, as their website declares, “In September 2010, Bell Let’s Talk began a new conversation about Canada’s mental health.” They jumped in with two feet. In the past 9 years, Bell Let’s Talk has raised over 100 million dollars, supporting over 1,000 organizations that provide mental health care.
Bell’s efforts have paved the way for many athletes and celebrities to go public with their mental health issues. As a passionate Toronto Raptors fan, I was impressed with the courage of DeMar DeRozan, who in February 2018 revealed his lifelong battle with depression and anxiety, saying, “It’s not nothing I’m against or ashamed of.” More impressive was that DeMar recognized that he could help others by telling his story. As he said, people could look at him and think, “He goes through it and he’s still out there being successful …”I have no doubt that his statements were uplifting and comforting to thousands of people.
Even here at Algood, mental health is on our radar. In part that’s because of the coverage provided by the health benefits we offer our employers. But mostly it’s because we recognize that the people who work for us are our most valuable asset. They get more care and attention than any piece of equipment, no matter how expensive. We have an obligation to provide a safe and healthy work environment and that’s what we strive to do every day.
This year, Bell Let’s Talk day is next Wednesday – January 29 and I urge everyone to get behind it. For every tweet using the #BellLetsTalk hashtag and for every Bell Let’s Talk interaction on other social media platforms, Bell will donate 5¢. Last year, there were over 145 million interactions that resulted in Bell donating over 7 million dollars. Find out more about what you can do on January 29 at the Bell Let’s Talk website.
The “hear no evil, see no evil” approach to mental health is falling by the wayside and that’s a good thing. People can, without fear, seek the help they need and be more productive members of society. Increased awareness allows others to be more sensitive, more respectful and more helpful. As I said, it’s about time.
Casters, death & taxes
This is the time of year for predictions. So-called experts gaze into their crystal balls and come with things like “20 technology trends for 2020.” Yuck! Personally, I think it’s a lot of nonsense. While it might be tempting to make predictions for the caster business, I’ve learned over the years that it’s almost impossible. In fact, the only prediction I’m certain of is death and taxes. Here’s why.
For the most part, our customers are not the end user of the casters we produce. Our distributors are selling casters to their network of customers. Our manufacturing customers order casters to be installed on equipment they are producing for their customers in retail, industrial or other sectors. In all these cases, we are multiple steps away from the buying decision that initiates the need for casters. That distance from the key decision maker makes sales predictions almost impossible.
In addition, our customers are very cautious about keeping casters in stock because it ties up money. When you combine that with the reality that casters are often an afterthought in equipment manufacturing, you can see why we are usually the last people to know that a caster order is coming. It’s not at all uncommon for us to see customers unexpectedly increase their requirements by 50% or more.
Aside from being low man on the supply chain totem pole, our business is also affected by all kinds of other impacts, many of which have been very prevalent this year. Governmental policy and decision making have had a dramatic effect on the caster business this year in the form of tariffs and trade policy. Here in Canada, we just had a federal election and 2020 is an election year in the U.S. Although we all get a vote, we can’t possibly predict decisions that a new government might make that could affect the demand for casters.
Beyond that, there are forces in the economy that are absolutely unpredictable. Labour unrest or strikes have rippling business impact. Corporate leadership changes, especially those that were unanticipated, can result in changes in buying patterns.
Despite all that there are in fact some predictions that I can make for 2020 with certainty. At Algood, we will continue to put our customers’ needs at the centre of everything we do. Using our fully integrated manufacturing facility, we will continue to partner with our customers, designing and producing casters tailored to their requirements with the highest standards of quality and performance. We will also continue to make capital investments to enhance our capability and productivity. And, as we have for the past 50 years, we will personally stand behind every single caster and wheel we produce.
Other than that, I’ll stick with death and taxes.
From all of us at Algood, we wish you and yours a happy holiday season and all the very best for the new year.
Business Binge Watching
Believe it or not, I don’t always think about Algood. Even though I tell people that I eat, breathe and sleep casters, there are times when, for no other reason than my sanity, I just have turn my attention to something else. That’s when I love watching business-based TV shows. In fact I usually binge watch a number of episodes at a time. For me Dragon’s Den, Shark Tank, How It’s Made and Marketplace are interesting, informative, entertaining and sometimes even inspirational. Here’s why.
Shark Tank and Dragon’s Den are essentially the same show with different personalities. In each, entrepreneurs pitch a business idea – a product or service – to a panel of investors, trying to get them to buy a share of their new enterprise.
The idea of building something from nothing is very compelling for me. I’m the son of an immigrant who came to North America with very little and managed to build a business that has been successful for 50 years. There’s something about the pioneering spirit of these investors that speaks to me. And sometimes I’m blown away by the creativity and ingenuity of some of the ideas.
The business basics of each pitch is also intriguing. What are the costs and margins that they are forecasting? What channels will be used to market or distribute the product? If it’s being manufactured, is production taking place in North America or offshore? For what it’s worth, I’m always surprised that the investors seem to prefer cheaper production, essentially making cost more important than quality and disregarding the broad economic impact of North American manufacturing.
There’s also lots that I’ve learned from both shows. On one level, I can apply the investors’ insights and perspective. What would I say about Algood if I was one of the dragons? Do we have too many SKUs? Are we investing too much in our business? Are we creating the right positions? And, from watching the entrepreneurs and seeing what works and what doesn’t, I’ve been able to hone my own business presentations.
It doesn’t end with watching the show. I will always Google the businesses and ideas that the investors bought into. It’s fascinating to track their progress and learn from their success or failure.
How It’s Made is a natural for me. As the name implies the show explores how everyday products are actually made. These are things that we take for granted. Who has ever thought about how rubber bands or Lego or mascara are produced?
As a manufacturer, this is incredibly interesting. I’m fascinated by the materials, the equipment, the processes, and the people. I’ve definitely been able to apply some of what I’ve seen on the show to improve our own manufacturing techniques. On top of that, it allows me to appreciate what customers might find interesting about our own manufacturing processes.
Marketplace is a CBC program that uncovers business backstories. Where do the items that we put in recycling boxes really end up? Are high-end running shoes really worth the price? Should you trust your credit score? It’s the show that has the least to do with Algood but the topics are really interesting and there are two ways in which it sparks thought. First, it demonstrates that things aren’t always as they seem and keeps me looking beyond the superficial. In addition, it makes me consider the way customers look at Algood and allows me to anticipate some of their questions and concerns.
As you can see, these shows are not a complete departure from thinking about casters but they do allow me to see Algood from a different point of view. So, you see that aside from the opportunity to relax and be entertained, binge watching has its benefits.
What do You Watch? Let us know what some of your favourite business (or other ) programs are and why.
‘Tis The Season
Don’t worry. This isn’t one of those Christmas in October posts that will raise your blood pressure by making you think about gift lists and credit card balances. The season that I’m referring to is the annual increase in R & D activity that dominates the last quarter of the year. Whether its developing brand new products or the tweaks, modifications and tinkering to existing products, this is the time of year we roll up our sleeves and put on our lab coats.
There are many reasons for this yearly flurry of product development activity. Our customers use the last three months of the year to implement product introductions and improvements. They come to us looking for the casters and wheels that will facilitate their product launch plans. Sometimes that’s based on engineering specs but very often it’s based on a description of what they need a caster to do or how they want it to look.
That’s where our fully resourced engineering team gets involved. In fact, we roll out the R & D red carpet for our customers. We can go from concept to carton including 3D modeling and testing. Equally important, after 50 years in the business, we have the know-how and experience to recommend the finishing and components that take a caster from being just functional to being a superstar. We consider every aspect of a caster – from axle sizes and bearings to washers and stems to heat treating and plating. Better yet, we know how to produce economically without compromising on safety or standards.
Lots of the last-quarter activity is driven by our own internal product development. When you eat, sleep and dream casters like I do, you’re always coming up with ideas for new or improved product. Our R & D people are used to me sending them sketches I’ve created on my iPad. At this time of the year, our weekly engineering meetings are dominated by new product discussions.
Our customers light a fire under our R & D activity. Aside from formal product development requests, much of the inspiration for new and improved product comes from my many meetings with customers. Comments that begin with, “if only there was a caster that …” or “why isn’t possible to …” have led to some of our most successful products.
Product R & D leads directly to the development of capital equipment. To do more, better and faster takes the right machinery in our fully integrated manufacturing facility. In the past three years, we initiated an unprecedented capital expansion program that has exponentially improved our capacity – both in terms of range and volume.
The truth is that R& D is an ongoing process. We are always thinking about how to produce better product that is more reliable, cost efficient and can can be delivered on time. Practically, however, our own design and development comes second to meeting the needs of customers. That means we are using the last quarter of the year to focus on what we will introduce in 2020. We have bold plans for the new year and you can look forward to some interesting developments in low profile, heavy duty and stainless steel casters.
You won’t find R & D season on a calendar or in the Farmers Almanac. But, for us at Algood, there isn’t a more important time of the year.
The Amazon Effect
This is a good-news/bad-news post. The good news is that North American caster manufacturing facilities are busier than they have been in decades with demand far outpacing capacity. In fact, data from the U.S. Bureau of Economic Analysis indicates a 16% in the value of durable manufactured goods from the first quarter of 2016 to first quarter of 2019.
The bad news is that today’s customers have Amazon-induced delivery expectations and are frustrated by the extended lead times resulting from increased production. It may not seem like it, but this is a really good problem for the industry and there are ways we, at Algood are of dealing with it.
Let’s start with what’s behind the reshoring of caster production.
Tariffs are likely the biggest influence. Not only have tariffs on Chinese imports accounted for price increases, volatile trade policies mean that it’s almost impossible to predict what will happen to tariffs in the short to mid term. That means suppliers may have to impose sudden price increases as they did last year. That doesn’t go over well with customers who have already committed to pricing on projects in progress or those with budgets in place.
The U.S. government recently enacted far-reaching tax legislation that is making it financially attractive for producers to bring manufacturing back home. Federal tax rates for companies exporting goods are being reduced dramatically. In addition, many states are offering tax incentives that include credits for adding new jobs.
Beyond the financial benefit to manufacturers, another contributing dynamic is the unpredictability associated with off shore production. There are frequent delays in delivery and the product received isn’t always exactly as ordered or built to the necessary standards. Companies buying casters are working on tight deadlines and tighter budgets. Goods that can’t be used or late deliveries have a cascading impact on production and sales. It’s not surprising then that customers are looking for suppliers that are manufacturing in North America.
The result is that as manufacturers bring new plants online and retool others, they can’t keep up with demand. That in itself is not a new phenomenon. I can remember times before the 2008 downturn when long lead times were simply a reality that customers had to face. But today’s buyers – and, in turn, their customers – don’t have that patience.
Although consumer goods and supply chain products are very different from each other the buying experience of one affects the other. With an Amazon Prime membership you can order today and receive your product tomorrow. And Amazon already has same day delivery in some markets. Against that backdrop, caster customers are asking for increasingly shorter lead and response times. Just a year ago, we bragged about an extraordinary case of going from concept to carton in 60 days. Today that’s a common expectation. While it’s possible to pull that off for one or two customers, it’s impossible to move at that pace for every customer. We understand that‘s not what customers want to hear, but even in a 60,000 square foot integrated manufacturing facility, we are bound by the constraints of capacity and time.
So, what to do? How do we bridge customer expectations with the reality of our capabilities? Here’s what we do:
Be honest. We let customers know exactly what deadlines we can meet and never promise a delivery date we can’t make.
Innovate. We are constantly examining our production systems and processes looking for changes we can make that will impact capacity and lead times. By thinking out of the box, we’ve been able to improve both.
Collaborate. Sometimes making a small change in the spec provided can make a significant change in the timeline required. We work with our customers to see how we can provide the required performance within expected deadlines.
Communicate. We are in touch with customers through every step of the production process. That way, we can inform them in real time of our progress and immediately mitigate the impact of any unanticipated issues. Being kept in the loop provides an important measure of comfort.
Empathize. We are also customers and we know what it’s like when suppliers can’t provide product as quickly as we would like. It’s important to understand and acknowledge the frustrating situation that customers face.
The Amazon Effect is not going away. If anything it will intensify. That’s why it’s more important than ever for us at Algood and for all caster manufactures to give more and more thought to bridging the gap between customer expectations and production capability.