DOMESTIC MANUFACTURING IN A PANDEMIC: ALL HUSTLE AND GRIT By MITCH CAHN UNIONWEAR
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.
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FALL 2021 | NEW JERSEY CPA
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.
