5 Reasons to Implement a Pull System for Manufacturing Technology

5 Reasons to Implement a Pull System for Manufacturing Technology

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.

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New Year, New Focus: How Ignoring Unhelpful Habits Can Help Achieve Resolutions

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!

Photo Sourced from Getty Images: #1384332902

How Much Does It Really Cost to Import Products?

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

3 Days Vs 100 Days or Can you Risk 155 Days of transit Time and 4X the costs?

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

Top Reasons to Consider US Based Manufacturing Vs Offshoring

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:

At best:

  • Costs will increase – reducing your margins
  • Delivery times will push out – frustrating your customer

At worst:

  • 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

E4D featured on Fox Business’ “Inside the Blueprint”

E4D Technologies was featured on “Inside the Blueprint”, a fast-paced TV series that takes a sweeping look at innovations in the commercial construction and design spaces, chronicling ideas and products that impact how we live, work and play. Watch the video below:

E4D featured on Fox Business’ “Inside the Blueprint”

E4D Technologies was featured on “Inside the Blueprint”, a fast-paced TV series that takes a sweeping look at innovations in the commercial construction and design spaces, chronicling ideas and products that impact how we live, work and play.

Watch the video below: 

From the Desk of the CEO: Women in the Workplace

Last month, it was International Women’s Day. I’ve been processing my reaction to this day, and I’ve found myself feeling both hope and discouragement. On one hand, I love seeing that the great women in my life, at E4D and around the world, being honored. On the other hand, I am disappointed that we still need a day to try and balance the gender disparity.

This day celebrating women goes back to 1909 in the US and, more than 100 years later, studies show that we still have:

  • 47% of women in entry-level jobs, which reduced to only 21% at C-Suite
    • Women of color are still vastly underrepresented, with only 3% of C-suite jobs (1)
  • COVID-19 challenges (childcare, work from home, etc.) are impacting women in the workplace more significantly than men
    • 76% of women vs. 54% of men (1)
    • Moms of young children lost jobs at 3x the rate of fathers (2)
  • US Census Bureau shows that little was done to bridge the gender wage gap between 2018 and 2019, with women earning $0.82 for every dollar earned by men
    • If you add controls for skills, education, occupation, age, etc., it’s still only $0.88 on the dollar per Pew Research

Just to be clear – I’m a strong advocate for men in their career, as fathers and contributors to the greater society. Regretfully, I’ve also seen men face discrimination because they were involved parents, co-sharing parenting responsibilities with their partners.

For all the conversations and even laws that have been passed, the scales are still not balanced between men and women in the workplace. Research has shown that one of the primary causes for the ongoing gaps is that more women than men miss the first rung of the ladder. There are several reasons for this, and you can read more of the details in the study.

In my experience, one of the biggest challenges is that women in the workplace aren’t included in the day-to-day natural interactions that occur between men. The men gather together grabbing lunch or beers after work.  They plan golf events and just simply gather around the “water cooler” and talk. Naturally, both personal topics and work topics get discussed. Relationships and networks get built, and some degree of informal mentoring takes place.

When it’s time for that first level of promotion, it’s natural for recommendations to be made for the men who have been building this network. They just don’t know the women candidates as well. Unfortunately for women, once you miss the first rung, each rung gets harder and harder for many of the same reasons.

There are several other reasons, often related to unconscious biases. While there are many different ways we can be biased, one simple expression I’ve noticed more as I’ve worked in the south is the way men often refer to the women on their team as “girls” or “ladies”.  While many do not initially intend to create a bias, the message is that one is less mature or experienced, maybe even dependent on the men. For many, it’s an inadvertent behavior; they might even think they are being polite. But it sets the tone for others to power up over those same women, that their value is not equivalent to the men.

When I informally poll my women and men friends who are in leadership, almost universally, the women have had an experience of being accused of sexual favors in response to a promotion, none of the men have. This has been my own experience.

So, all of us, myself included, need to continue to check our behaviors and bias to ensure that the world we leave our daughters, nieces and sisters, as well as our sons, nephews and brothers, is finally balanced for all genders. There is great information available to give specifics, and I encourage us all to continue making this a critical part of our leadership. We have the power to make this right.

Photo Sourced from E4D Technologies

Here’s How We Do It: Gage R&R Manufacturing to Validate Testing and Continuously Improve

At E4D Technologies, we have a wide variety of tools, systems and processes that help us ensure we are doing everything as efficiently and accurately as possible. Gage R&R is one of the tools we use to validate the accuracy of our measurements. We believe that by creating reliable products, we can create safer medical devices for consumers and doctors alike. Here’s everything you need to know about gage R&R manufacturing with E4D Technologies:

 

What is Gage R&R Manufacturing?

Gage repeatability and reproducibility (gage R&R) is the process of finding the variation in the measurement data gathered from gauging equipment to determine its accuracy. Essentially, this is a process used to determine the accuracy of a measuring system. By gauging the quality of your measurement system, you are able to determine if there is variation in the manufacturing process. Our goal is to limit the amount of variation in the process to provide accurate products.

 

What’s the Process of Gage R&R?

First, you must determine if your product will require gage R&R. We do this by examining the risks involved with creating products that don’t require a high level of accuracy. Some products, such as plastic forks, may not require gage R&R due to the low risk associated with inaccuracy. Other products, however, such as pacemakers, quite literally create life and death situations if the product isn’t as accurately manufactured. Due to the resource required to perform a gage R&R, we only perform these tests based on the risk assessment and customer requirements.

Our goal with gage R&R is determining if our manufacturing process is repeatable and reliable. In a typical gage R&R process, appraisers start by taking measurements of samples from different trials and collecting the data. Different appraisers collect data from samples using the specified measuring equipment and compile the data. The compiled data would then be calculated to determine the variation amongst the different samples for an accurate gage R&R.

 

What Factors Determine if the Variation is Acceptable?

We determine if the gage R&R collection data is acceptable compared to the industry standard of acceptable variation. We determine three different factors, each with its own set of industry standards. The three factors to determine in a gage R&R study are the percentage contribution, total gage R&R and the number of distinct categories. The acceptable results are as followed:

 

Percentage Contribution:

1% or less – Acceptable

Between 1% and 9% – Conditionally Acceptable

More than 9% – Not Acceptable

Total Gage R&R:

10% or less – Acceptable

Between 10% and 30% – Conditionally Acceptable

More than 30% – Not Acceptable

The Number of Distinct Categories:

5 or more distinct categories – Acceptable

3-4 distinct categories – Conditionally Acceptable

2 or less distinct categories – Not Acceptable

 

What is the Importance of Gage R&R to E4D?

There are risks involved with not understanding the measurement system you are using to create a product. Let’s use a tire for example: if you need to refill your tires with air and the measuring system is faulty, you could overfill your tires and it could explode. Measurement is an integral part of any manufacturing process. That’s how we determine if the product is good or bad before we ship it out. It’s basically predicting the quality of our manufacturing process.

The value of working with a technology manufacturer and designer like E4D is that we are able to coach you on what manufacturing your product will require. We are here to help you save time and money by only using tools that are necessary for your product. To us, it’s all about risk management, safety and efficiency. Want to learn more about our processes? Check out our blog today!

Photo Sourced from E4D Technologies