One of the two main pillars of Lean Manufacturing is JIT (Just-in-Time). SMED is one of the common tools in that pillar.Continue reading
When you use some form of pull systems, you are not making a product (or sub-assemblies) until you have demand. This means that you can rotate your labor to work on products where you have customer orders and can expect to bill quickly.Continue reading
In 1974, President Richard Nixon established National Volunteer Week. Over time, April became Volunteer Month. At E4D Technologies, we want to honor all the volunteers who give their time and resources to contribute to society positively. According to AmeriCorps data, US volunteers contribute almost $200 BILLION to our communities. As a company whose purpose is to provide More Freedom to Move Forward, we want to recognize the importance of giving back and the benefits it brings to our employees, our company, and our community. Here’s what you need to know about volunteering from E4D Technologies:
E4D Technologies Culture of Giving
At E4D Technologies, we embrace a culture of giving. Many of our team members took their time off (PTO) to volunteer. They were reading buddies at their children’s school, working at local pet shelters, helping at food banks, and their local places of worship. When we asked employees about why they gave up some of their PTO, they were clear that it was important to them to give back to the community. For some, it was because they had needed a helping hand at one time, and for others, it was to fulfill a greater purpose of caring for others.
Adding Volunteer Time Off (VTO) as a Benefit
At E4D Technologies, we wanted to live up to our purpose and meet the clear expectation of our employees who were using their time generously to help their community. We also wanted to protect their PTO for times when they needed it. We initially offered VTO (Volunteer Time Off) to support their initiatives and believed it would be a useful benefit to help us offer attractive, competitive benefits. What we didn’t know was all the other benefits we would receive by this seemingly simple offering.
Attracting New Talent with VTO
E4D Technologies is a small to mid-size company that requires some highly technical skills. We often compete for talent with companies like Google, Meta, and other top tech companies. Clearly, we can’t compete with their benefits and opportunities, but we have found that adding VTO really increased the appeal to potential new hires. Everyone loves the idea of contributing something meaningful and has a greater good than just working for a paycheck.
Connecting to Our Community
As we created group events to volunteer in our community, it gave us a much clearer picture of our community. 80% of our workforce lives and works in our surrounding community, and by volunteering, we are making a difference not only to those organizations but to our employees and our future employees.
While VTO is only one aspect of retaining and engaging employees, according to a 2022 report by PWC, 65% of people want to work for a company that has a powerful social consciousness. 73% of customers want companies that are helping society.
New Workplace Connections
One of the biggest unintended benefits of our VTO was the group volunteer events. While we do not prescribe a way to volunteer, we do try to offer one team volunteer event a quarter. This has created some great new friendships from people across departments. We have learned more about each other in a non-work environment. People from production and software engineers have worked together to pack food. Accounting and quality have pounded nails together while building for Habitat for Humanity. Volunteering became a wonderful way to build cross-departmental connections.
Fostering Healthy Competition
At E4D Technologies, we love good friendly competition. We’ve turned this competitive spirit into our volunteering efforts. What department can donate the most food? Which team can pack the most boxes? How many pounds of food were sorted in four hours? This has given us internal bragging rights, but it has also increased the benefits we bring to our community.
Starting a VTO Process
You can start small by creating a simple way to track VTO hours, a simple policy about how to manage the time with your manager, where or what types of places you can volunteer, and how frequently. Organize some group events periodically if you want to take it a step further. This allows your team to work together and build community while serving the community. In our experience, minimal investment creates huge rewards for the employee, the company, and the community.
In the month we celebrate volunteering, what’s stopping you from creating VTO or volunteering? At E4D Technologies, we have seen firsthand the benefits of giving back to our community. Our VTO initiative has not only allowed our employees to make a difference in the lives of others. Still, it has also helped us attract new talent, connect to our community, increase employee engagement, build new workplace connections, and foster healthy competition. We encourage other companies to consider adding VTO as a benefit to their employees and to see the many benefits of giving back. Want to learn more about what makes E4D stand out from other manufacturing and design companies? Contact us today!
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Do you get excited to launch each new year with new resolutions? Or maybe you pick a word or theme as a focal point for the year. Some of us, especially after the challenges of the last few years, don’t even bother. Here’s our take on resolutions from E4D Technologies:
The Tradition of Resolutions
Where did this tradition of resolutions come from, and why has it persisted? I was surprised that the concept of annual resolutions goes back to the Babylonians around 2000 BC. This idea of starting the new year with new goals and objectives has persisted for thousands of years.
Perhaps it has such longevity because we all hope our futures will be better and brighter. We would likely give up if we didn’t believe that tomorrow could and would be better. Resolutions allow us to think about how to improve our lives and the lives of our broader community.
Why Do Resolutions Fail?
While most people do not fully keep their resolutions, only 9%, according to research, just thinking about our intentions to create a better us and a better world has a positive impact. It gives us hope and optimism. It gives us reasons to move forward.
Many resolutions fail because our intentions and resolutions are entirely unrealistic. Is it realistic to go from the holidays, where you are eating and drinking at every event, to a new year’s resolution to lose 20 pounds by March? Suddenly you switch from eating all those delicious baked goods to ONLY eating vegetables and chicken while measuring every bite and calorie. No wonder it doesn’t stick. But for those who are tired of the guilt and shame of having these resolutions and not living up to them, let’s try something different this year. What if we decided to STOP DOING?
Focusing On What’s Important
Recently I heard a podcast with James Clear, the author of Atomic Habits, and he said something that made me reconsider how to look at new year’s resolution. He said, “Focus is the art of knowing what to ignore.”
What if we practiced ignoring those things that don’t serve us this year? No big goals. Just some baby steps to stop doing things that keep us from our best selves?
Maybe it’s starting by ignoring the calorie counter and strict, rigid diet. Instead, we may focus on leaving just a few bites on our plate every meal. That simple step would ultimately yield better eating habits.
Creating Better Habits for Yourself
Maybe it’s time to ignore that person who drains your energy EVERY SINGLE TIME. Instead, we focus on saying “no” to every other request for our time. One day it will get easier to say “no” all the time, or they will change their behavior.
You may ignore the guilt of about 30 minutes of daily exercise. Instead, you focus on prioritizing sleep, which is critical to all human functions. You could only do 5 minutes a day of activity. Once you have a good habit, even if it’s only 5 minutes, increasing the time is easier as you already have the routine.
So, as the wise proverb says, “How do you eat an elephant? One bite at a time,” instead of setting ourselves up to be part of the 91% of people who fail to achieve our goals, let’s start the focus on ignoring those things that don’t serve us well and just take baby bites. At the end of 2023, we will be surprised at how much we’ve accomplished. Want to learn more about finding success for yourself, both professionally and personally? Check out our blog today!
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For decades we’ve heard that it’s not affordable to manufacture in the US. The fear of not being competitive and losing market share is considerable! One size does not fit all in this current world of supply chains. Not everything can or should be re-shored. But what if it was more affordable than expected? And what is the value of de-risking your deliveries?
It’s time to reexamine the total landed costs of your materials. If you have previously done the full landed costs analysis; it might be time to do it again. As we discussed in our last blog, many of the costs related to importing from a global Asian supplier have dramatically increased, so is China still the great deal it once was?
What are Landed Costs?
To make sure we are all using the same vocabulary, landed costs are the total costs to get from Factory A to Factory B. This might be another factory, a distribution hub, or your end customer.
Categories of costs that are included in Landed Costs:
o Product costs
- Material, labor, factory overhead + profit
- Interesting note: China’s labor rates have increased ~ 200% in the last decade; US has only increased by ~ 8 %
o Freight costs
- Usually multiple carriers between factories: trucks, rail, planes or boat
o Taxes, Tariffs & Surcharges
- See the last blog
o Risk Management Expenses
- Insurance, quality inspections, etc.
o Cost of money/opportunity
- Cash invested in inventory at factory A or in transit
- Foreign currency exchange impacts
Some organizations get caught comparing product costs only between Factory A and Factory B. This is not a true comparison of costs. By examining the total landed costs, you can accurately assess how much you are benefiting from your overseas supplier.
Risk Mitigation Costs
While landed costs give you a true cost comparison, it is harder to quantify the cost of risk.
- What happens to your business when deliveries take 12 – 14 weeks to arrive?
- What if your demand changes dramatically during those 14 weeks?
- What if China again shuts down due to their zero covid policy?
- What does it cost you to have waited for 14 weeks to get parts, only to find a quality defect?
o Do you fix it yourself or pay to return them to Asia and wait another 14 – 18 weeks?
What opportunities are you missing due to your cash being tied up in inventory for all of this time?
If you have seasonal inventories, this is an even bigger risk. As we are seeing in the news, retailers are really impacted now as they saw a major demand shift and they had already tied up money into inventory that they are now deeply discounting. All of these is risks that are magnified with a global supply chain.
Once you have considered the updated landed costs and your appetite for risks, you can decide by commodity what products you should re-shore. If you have a low to medium-volume, complex electronic assembly; E4D is here to support your reshoring initiatives. Contact us today to get started!
Photo Sourced from Getty Images: #1353883760
Transportation Benefits to US Manufacturing
In our last blog, we discussed current global conditions and proposed that it is time to reassess our supply chain. Does global outsourcing still make sense?
The news is full of supply chain challenges. Each of us has seen the empty shelves in our local markets just waiting for the next delivery. Ocean containers are either backed up on ships or sitting in ports waiting for trucks. There doesn’t appear to be any end in sight. Transportation is a big impact on our supply chains. Currently, it is taking longer, costing more and tying up more of our cash.
Can your company absorb this increase in costs and time?
Supply Chain Problems from Ocean Freight
As part of the global outsourcing model, most companies chose ocean freight as their most affordable method of transportation.
In the last 18+ months, the China/Eastern Asia route to the US West Coast has seen container prices increase almost 400%. All global routes have seen unusually high increases. Companies are struggling to pass on these cost increases to their customer and are experiencing margin erosion.
Here is a simple example of how the freight increase impacts product costs:
- Prior to Freight Increase:
o 1000 Units per container = $3.80 freight per unit
- With Current Freight Rates:
o 1000 Units per container =15.50 freight per unit
If the price increases weren’t bad enough, at the same time overall service levels declined. It’s hard to explain to a frustrated customer why their goods are taking longer to deliver and cost more! In the second half of 2021, the news was full of stories and pictures of the huge backlog of container ships in the LA port waiting to be unloaded.
E2open’s Ocean Shipping Index finds that in late 2021:
- The average global shipment took 12 more days, or 23% longer, than the same period last year
- Overall lead times from North America to Asia took 17 days longer 25% longer
When lead times are weeks instead of days, it’s very difficult to react to changing demand scenarios and now many major retailers are stuck with inventory they no longer need. This isn’t just a risk for retailers, all companies have these potential risks when demand changes quickly and transit times are extended.
How will your company manage those risks if it happens to you?
Global Fees, Taxes and Tariffs, etc.
Even before we started seeing the increases in freight, tariffs have been increasing over the last few years. So now we have longer transit times, and increased freight costs combined with increased tariffs. During the Trump administration tariffs from China increased for some product classifications significantly. The Biden administration has made some adjustments, but for many electronics, the tariffs are now as high as 25%.
- In 2019, The World Bank reported that the US tariff weighted average was 13.78%, a 12.19% increase from 2018.
If our above pricing example was an electronic component, you would also pay an additional 25% of the value of the goods on top of the higher freight costs. Tariffs vary by product, and you can confirm your current tariff expenses by checking your specific HTS code (Harmonized Tariff Schedule).
In addition to freight and tariff costs, your landed costs will also include some or all of the following:
- Terminal Handling Charge
- Consolidation Fee
- Surcharges: Drayage Fee, CAF Charges, BAF Factor, Low Sulphur Fuel Charge, Peak Season, Carrier Security, etc.
- Custom Clearances Fee
- Merchandising Processing Fee
- Harbor Maintenance Fee (HMF)
- Delivery Fee
In our pricing example assuming an electronic item:
- Product costs $5.00 + freight of $15.50 + tariffs $1.25 + various fees $.50 = $22.25 Landed Costs
Depending on the base costs of your imported product, you could be paying multiples in transportation costs. As you assess your current supply chain, consider all the extra costs and fees that are being added to your product costs. Is it still the right solution? Also, what is it costing you to have critical capital tied up in inventory that isn’t even available to you?
Perhaps it’s time to consider a US-based manufacturer?
Suppose you partner with someone like E4D Technologies. In that case, we can reduce your factory-to-factory transit time from over 100 days to 3 – 5 days AND you will see a significant reduction in overall transportation costs. This provides you with better cash flow as materials will be in your factory; before you are required to pay in full. Want to learn more about how E4D Technologies can help your business? Contact us!
Photo Sourced from Getty Images: #1318116805
Since the start of the global pandemic, trips to the grocery store found empty shelves and purchasing limits on various goods. We couldn’t find face masks, toilet paper, hand sanitizer, meat or milk.
As months passed, news stories highlighted the huge backlog of container ships around Los Angeles waiting to be unloaded. Ford, GM, Toyota, Jeep, and dozens of other companies shut down production at various times because they were missing semiconductors (chips) inventory.
Supply chain shortages and their impacts are becoming daily news. Frustration is at an all-time high!
As consumers, we are frustrated by the increasing costs and ongoing shortages of everyday items. If you are a manufacturer, these same challenges are wreaking havoc with your production schedules and customer deliveries.
Who thought it could be worse than the early COVID lockdowns?
Part shortages, increasing component costs, growing transit times, and labor shortages are having major impacts on your business. Everyone is looking to find ways to mitigate supply chain risks, which has never been so challenging.
It’s clear that if you don’t change your supply chain strategies:
- Costs will increase – reducing your margins
- Delivery times will push out – frustrating your customer
- Ongoing part shortages – could cost you your business
Is it possible to find a strategy that will work in this market?
With all the current risks impacting our supply chains, many companies are beginning to rethink their long-term supply chain initiatives. For decades companies have worked hard to establish complex global supply chains networks. Considering the current global situation, is it time to reexamine that strategy?
Recently a friend sent me a blog titled “End of Globalization.”
This article included quotes from several financial and economic experts who stated that the economic globalization we’ve experienced is ending and instead turning to protectionism and self-reliance.
Atlanta Fed President Raphael Bostic said: “The tragic war in eastern Europe will further momentum toward reorienting production and supply networks away from pure cost minimization and toward resilience and risk tolerance. Supply chain disruptions [also] caused by the coronavirus pandemic prompted business leaders to start diversifying supplier locations and firms, increasing inventories, and bringing production closer to final markets to maximize reliability. Think of it as a shift to just-in-case inventories from just-in-time.”
It seems clear that we will reconsider our global supply chain strategies if we want to de-risk our supply chains.
Is it Time to Consider US Manufacturing?
Over the last decades, there has been some efforts to regionalize supply chains, but they never really stuck. However, after what we’ve experienced in the last 2+ years:
- A global pandemic
- Never before have catastrophic supply chain shortages
- Global transportation costs at all-time highs
- Global transit times increasing
- War between Ukraine and Russia
- Reoccurring COVID-19 lockdowns in China
This is the time to explore how your supply chain would benefit from US based manufacturing.
Reasons to Consider US Based Manufacturing:
- Transportation costs
- Taxes and Tariffs
- Transit Times
- Geopolitical and Natural Disasters
- Contractual Elements
- IP Protection
- Brand Management
- US Government Incentives
- End Customer Proximity
Changing your strategic supply chain initiatives is a complex task and any supply chain move has risks. But what are the risks to your business of doing nothing and hoping things return to normal? Even as I write this blog, several Chinese cities are once again locked down to combat a new COVID variant.
If we want to stay competitive, we must start to review where we buy components and adjust our supply chain strategies.
Over the next few blogs, we will look at some of the top reasons to consider re-shoring or launching your new product in the US. We will also explore the risks of those transitions. Please join the conversation as we expand on the various reasons US based manufacturing makes sense now. Looking to see how US based manufacturing compares to your current provider? Contact us today!
Photo Sourced from Getty Images: #1365029556
Last year I took a ten-day vacation and enjoyed sunshine, beaches, books and drinks that came with umbrellas. It had been almost 2 years since my husband and I were able to walk away from our careers, dogs, and the normal day-to-day to relax. Several people questioned the wisdom of a 10-day vacation. In fact, it wasn’t that long ago and I would have questioned it.
Most of my career and life has been sans vacations, or at the most, limited vacations. I was raised with a very strong work ethic and there was always work to be done. I believed that I owed it to myself and my employer to be dedicated to the work. I only took rare vacations for very special occasions or to go and visit loved ones. This work style also meant that I often skipped lunch or ate at my desk while working. I was driven to have increasing levels of productivity and since we all have 24 hours in the day; I had to optimize every single one.
This mindset has been part of many company cultures and individual work ethics for several years. Promotions and career advancement often followed those who demonstrated dedication by working long hours. In some cultures, the focus was on the effort more than the results. Research now shows that this behavior rarely led to better results and increased productivity.
A few years ago, I was introduced to a book, Peak Performance, which explored and explained why my method of work was a less than an optimal process. Disappointing for someone who took pride in her effectiveness and productivity. This book’s research and insights were completely opposite and counterintuitive to what had been my standard of productivity. Turns out I was missing a key element to the formula for ultimate results. Working hard was only a portion of what was required. Research revealed that all the top producers in their field take breaks frequently. While they work hard, they also rest hard.
I really do want to make my hours in each day count for what is important. I truly love being productive. So as I read the research, I realized that I need to change my day-to-day if I really wanted to sustain a lifetime of productivity in whatever I was doing. I also realized that as a leader, I’m modeling for my team how to be most productive. This has become especially important as the impacts of stress on our employees continues to rise. Gallup’s latest State of the Global Workplace report, 57% of all groups surveyed were experiencing stress on a daily basis, which is up from the prior year. Not unusual considering that we have been living through a global pandemic.
Peak Performance made me realize why breaks and vacations were actually going to increase my productivity. The research they provided, as well as other readings I did, crystallized for me that the work hard and never rest mentality was actually harming my growth and productivity. The authors, Brad Stulberg & Steve Magness share a formula that sums up the research: stress + rest = growth. Just to be clear, they were not referring to being stressed out, but the stress like making a muscle stronger.
I began to realize that as I took even short breaks and set better boundaries about when I would work and when I would not, I had breakthroughs in my thinking. Those “aha” moments don’t break through constant activity. Only in combination of work and rest can true breakthrough happen resulting in growth and increasing innovation and creativity.
So, my 10 days of rest was required to reset after an intense 2020 and with the supply chain challenges that began and are still continuing , it was important that I had time to reset, so that I could bring my best ideas and self to the table at E4D Technologies. I learned an important lesson in my time off, giving yourself a break is just as important as keeping up your work ethic. Be sure to explore the rest of our blog page to find more information on what goes on behind the scenes at E4D Technologies!
Photo Sourced from E4D Technologies