Rethinking Manufacturing in Light of the Pandemic

We have learned a lot of hard lessons from the pandemic, but the vulnerability of our supply chains has affected virtually all of us. From inconveniences such as a lack of toilet paper at Target to the PPE shortage crisis, we have become hyper aware of our reliance on overseas factories in these unprecedented times. The reasons behind such shortages are multifaceted — from a lack of workers, scarce materials, transportation issues, and border closures — and the answer to addressing these supply chain pitfalls are equally complex. Although we cannot feasibly ameliorate all these woes, especially on such a pressing timeline, there are various ways we can rethink which products we make domestically and how we make them.

The most obvious answer to address shortages of goods is to simply make more products domestically. Yes, in theory the U.S. may have the technological capabilities to do so, but that’s only one aspect of successfully manufacturing domestically. Using disposable face masks as an example, we just can’t compete making the masks domestically with regard to price. Labor and raw material costs in the United States are too high to genuinely compete with higher-capacity and lower-cost factories overseas. To illustrate this, an average retail price for a single disposable mask made in the USA ranges from approximately 80¢-$1 per mask, whereas one made in China retails for approximately 40¢-60¢. Despite the added cost of transportation and duties, masks produced overseas can still be provided to consumers at approximately half the cost as those made domestically (though this is not necessarily taking into consideration a price premium some consumers are willing to pay for the perceived “safety” of masks made in the US). Considering the sheer volume that disposable masks are now being purchased (on both a single consumer scale and the institutional purchasing scales of companies, healthcare systems, and the government) this price difference undoubtedly has an effect on purchasing decisions in favor of lower cost internationally made alternatives. So if we can’t compete on the disposable face mask front, where can we create more security in our supply chains? For one, we can capitalize on existing consumer purchasing trends of buying locally made goods, as well as leverage digital fabrication technologies for decentralized manufacturing, and lastly rethinking what products can be efficiently made domestically.

The manufacturing of disposable masks may not be a domestically viable option, but there have been a number of companies thriving by producing cloth masks locally. Additionally, many companies have pivoted their production in light of the pandemic to address emerging consumer purchasing trends that began long before COVID hit. Lobo Mau, a “slow fashion” brand located in Philadelphia, PA, produces bespoke fabric masks utilizing their in-house screen printed fabric. Fashionable and functional, these masks are indicative not only of our society’s pressing need for face masks, but also speaks to larger consumer purchasing trends for ethically sourced and locally produced goods. More people are looking to buy distinctive and/or artisanal goods that are designed, made, and sold locally — consumers are rejecting in some ways the mass market goods sold through e-commerce and looking for products that are more personal and meaningful. Furthermore, a longing for personal connection and meaning has perhaps never been more prevalent than now in the light of months of sheltering in place. For these types of bespoke goods consumers are more than willing to pay a premium, and in many ways now see buying local as fulfilling a “patriotic” duty. Using the cloth mask as an example, Lobo Mau’s price tag of $20 is 150–200% of the price of (functionally) comparable products on Amazon. However, the seemingly endless demand for Lobo Mau’s masks validates that consumers are willing to pay a premium for local goods over mass-market commodified alternatives.

One also cannot discount the economic effects of buying locally. On average, local businesses (both retail and restaurants) recirculate 40–50% of their revenue into the local economy, versus national chains that only recirculate about 14–17% of their revenue. With local businesses recirculating approximately 2x-3x more of their revenue compared to their national counterparts, it is obvious that local businesses are, and will be, integral in rebuilding our economy by largely catering to these arising consumer purchasing trends. The types of products we choose to make domestically are part of addressing our supply chain woes; how we make products should also be part of this conversation.

“In the future, everyone will have a 3D printer in their home!” is a common rallying cry in support of the rise of 3D printing as a manufacturing tool. Even as 3D printing gets faster, cheaper, and more reliable, the real need for “every” person to have a printer in their home is an unlikely scenario (at least in the next few years). Yes, 3D printing is great at making small, plastic parts that can be infinitely customizable by the user. However, small plastic objects only account for a small percentage of products we would use in a typical day, and we don’t currently have the capability to 3D print products with electronic components, complex assemblies, or objects larger than a basketball (at least using desktop size 3D Printers).

However, 3D printing has been used across the world to address a critical shortage of PPE, such as in the 3D printing of face shields here at UPenn, ventilator valves, and even “ear savers” for nurses and doctors on the front lines. This type of “on demand” manufacturing allows for virtually no lead time and/or start up costs — which as compared to the process of injection molding can save weeks of factory set up and tens of thousands of dollars in mold tooling costs. These two factors were especially pertinent within the context of the PPE shortage; people were able to create products where and when they are needed. One factor not yet accounted for though is time, in that the amount of time to create a single part through 3D printing is exponentially longer than an injection molding cycle. Using a face shield frame as an example, to 3D print this object would take about 45 minutes whereas an injection molding cycle could produce this object in about 30 seconds or less. The last factors in comparing 3D Printed objects to Injection Molded are object stability and strength and material cost, though in the use case of a face shield, are fairly negligible tradeoffs between these two technologies.

With all these tradeoffs considered, the mass production of 3D printed parts (and even those made by other digital fabrication tools such as lasercutters, CNC Mills, etc) will take place in a slightly different context than many people having these machines in their homes. We are already starting to see a rise in 3D Printing “farms”, or facilities that have dozens or even hundreds of 3D Printers printing in unison. By increasing the number of machines, this helps solve the long printing time — since many parts can be produced synchronously in a given amount of time. These types of facilities also create more efficiency in the running and the upkeep or printers, which can be a large barrier to those printing at home.

Looking at present trends, and into the near future and beyond the pandemic, manufacturing will likely occur in more places — meaning a more decentralized system — in hubs and facilities that have a collection of digital fabrication tools. This also speaks to the aforementioned trend of localism and its economic benefits, in that these types of hyperlocal facilities can create products on demand that are highly specialized, catered, and designed for the community in which they are serving.This type of decentralized system can insulate us from many of the supply chain vulnerabilities that we are currently facing. Digital fabrication allows for more agile production of products (factories could change what products they are producing on a daily, or even hourly basis), with less reliance on transportation of goods between countries, and no need to rely on stockpiling of finished goods (since demand can be assessed in real time). Though it is inevitable that certain materials and components may need to be imported from elsewhere, overall this type of system offers more flexibility and responsiveness to customer demand.

Digital fabrication aside, there are still instances of manufacturing (in a more traditional sense) that thrive domestically in light of the supply chain shortages of the pandemic. Biomeme, a biotech company that produces a portable and rapid SARS-CoV-2 testing platform, manufactures their real time PCR thermocycler, called the Franklin, in a facility in Center City, Philadelphia. The small electronic device works in tandem with their lyophilized and shelf-stable chemistry to detect the presence of a specified DNA sequence within 45 minutes by real-time PCR — meaning a healthcare professional can collect, analyze, and deliver a test result of detection of the coronavirus in about an hour from virtually anywhere (no offsite lab needed). By having their manufacturing operations a floor below their main office, this allows for efficient oversight of the production operations and allows for real time adjustments to the product itself. This also helps protect their extremely valuable intellectual property on the device that would be vulnerable if manufacturing was outsourced. As a bonus, this domestic production eliminates the difficulties with importing goods from overseas and the politicisation of sharing testing supplies across borders.

This type of domestic manufacturing operation comes at a high cost in skilled labor and for the manufacturing space itself. However, due to the device’s need for high precision assembly, quality control, and certification, this could not be achieved through contract manufacturing overseas due to constraints on skilled labor and managerial oversight. This high fixed cost of production is reflected in the platform’s relatively high price point of $9,950 (though in comparison to traditional lab-based thermocyclers, the Franklin is a fraction of the cost). However, in comparison to other electronic devices, a high priced/high margin product such as the Franklin would only thrive in these types of domestic manufacturing conditions. One could probably not make a smartphone under the same circumstances and create a meaningful amount of revenue at the average smartphone retail price of $600. Hence products such as the Franklin, that are produced for high precision usage, through skilled labor, with highly valuable IP, are successful and really only made possible through domestic manufacturing.

In conclusion, there are a variety of ways we can address the vulnerabilities of our supply chains throughout the pandemic and beyond. By rethinking what products we make domestically, we can appeal to consumer’s changing purchasing values in response to the rise of localism. Domestic manufacturing also allows highly valuable, high margin products such as the Franklin from Biomeme to be made more quickly to serve the urgent demand for COVID testing. We also cannot discount the role that digital fabrication tools such as 3D printing allows for the production of goods with virtually no lead time or start up costs, allowing for an instantaneous response to demand. “Hubs” of digital fabrication will become more commonplace, allowing a quicker and more agile response to demand for products in real time while also being able to cater to the needs of a local customer base. Though in recent years there has been an overall trend towards decentralized manufacturing, the exposure of our vulnerable supply chains in light of the pandemic has created an urgent “call to arms” for Americans to rethink what, where, and how our products — from commonplace household items to desperately needed PPE equipment — are manufactured. It is likely in post-pandemic America, consumers will be more aware of, and in fact demand, to purchase more products made locally as a way to more directly help rebuild their economy. Supported by a newly flourishing network of manufacturing in tandem with these consumer purchasing preferences, as a country we can create more independence and security in our supply chains, and as a by-product create a more human centered, responsive, and sustainable system of creating consumer goods. Though the reckoning for this zeitgeist is unexpected and tragic, many look forward to a refocusing of our economy on the most important part — the customer.

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