Surviving and thriving through COVID19
A Canadian EMS player tells their story - Microart Services Inc.
2020 has been an unusual year, no doubt. As a manufacturer and electronics service provider we saw impact from the pandemic from the start of February when our well laid Lunar New Year plans were blown off course by what seems, in retrospect, to have been a perfect storm of disruption. It started with the disruption of supply chain, quickly followed by serious demand swings that came almost at the same time as changes to our working practices, courtesy of social distancing and the like.
So, how have we coped during the crisis, how did we minimize the impact on our customers and what have we learned from the strangest year in our almost four decades in the electronics manufacturing industry?
A Triple Whammy of Disruption
Right after Chinese New Year we started to see warning signs and ripples in the supply chain for components and printed circuit boards (pcbs) that we purchase in China. We had already planned for the normal disruption of the annual holiday, and had a reasonable stock of most of what we needed. Forty years in manufacturing teaches you that Chinese New Year needs to be planned for. We quickly got our purchasing and supply chain team working on sourcing those parts that were in short supply to mitigate any disruption from those that were perhaps only single or dual source and might be at risk. Our supply chains systems are largely digitally enabled, so we had a clear picture of where we were, what might be in danger and how to plan and mitigate any risk.
The second and third waves of disruption came around the same time. By mid to late March we were already cancelling spring break vacations and focusing on keeping our team safe. We quickly learned what social distancing means and made arrangements regarding Personal Protective Equipment (PPE). This is when we really had to switch up a gear and move into more of a crisis mode.
Our team is like a family and many of our staff have been with us more than a decade. Their health and wellbeing is extremely important to us and we quickly took steps to protect both. We spaced out the team on the factory floor to ensure they met the criteria for social distancing and provided those that needed to be on site with the right PPE. For those that could work from home we made sure they had the right setup there to do their job and to stay close to the team. Our IT team quickly made sure that those that needed a laptop to go home had one and that it had the right setup to ensure we could work remotely and securely through a lockdown that was far from clear in terms of how long it would last.
Open, honest communication
The general wellbeing and mental health of our staff is equally important, so we quickly got onto the business of open and honest communication with the whole team and of course with our customers. Regular town halls, open doors, and clear lines of communication are essential anytime, but when there is so much uncertainty, leadership style becomes even more important. It felt like the pandemic was really shining a bright light onto the Microart team, asking them to go the extra mile. We needed to do our very best for our customers, many of whom had essential status or were responding to the crisis themselves. I am extremely proud of how we reacted as a company, but most proud of the team and how they really came together to meet the challenges as they appeared in front of us. I knew we had a great team, but to see everyone pull together and do what it takes was extremely gratifying.
The demand disruption was a challenge and we saw some newer projects put on hold, other volumes dropped off, and some ramped rapidly to meet new demand in the market. Those involved in the fight against COVID-19 or any form of PPE or medical equipment were ramping fast, as were some brands that provided solutions or equipment that would help people in lockdown, like home fitness or work from home solutions. We have one customer in the fitness technology sector who has grown rapidly in 2020 and continues to see increasing demand.
Respond to any disruption
What we have seen is a shift in mindset from our customers in terms of what their manufacturing supply chain might look like and how it can respond to any disruption that might occur in the future. They are looking for agility, flexibility, visibility and resilience. They want to know that when the supply chain is disrupted we can provide them with timely information about the impact of that disruption. And that we can quickly adapt and implement a contingency plan.
For some that has meant re-evaluating the manufacturing they currently have done overseas, particularly in China. Many have been surprised at the value on offer here in the Americas, when you take everything into account. And by that I mean understanding the true cost of producing in a different continent and different time zone to the developers and the customers. The cost of procurement, of transport and logistics, of factory audits, of new product introduction, of line management, of quality control, of vendor management, can all add up very quickly and erode any savings seen at the assembled part price. And, that doesn’t even take into account the stress related to late night conference calls, wondering if things are as they seem thanks to poor tracking and visibility, concerns over IP protection, and worries about tariffs as the trade war between the US and China continues. All in all, we have been able to show great value and service, and perhaps some peace of minds that’s worth a few cents on the dollar.
Continue to invest
We did experience a little delay installing our newest SMT line, which got stuck on the loading dock in the crisis. But it’s in now and our investments in greater capability and capacity are back on track. We continue to invest in digital transformation and the kind of equipment that makes us even better, even more efficient, and even more agile for our customers.
Next year we celebrate our 40th anniversary and will enter 2021 with confidence and vigour, knowing that if we get through 2020 we can get through pretty much anything the world has to throw at us…
The pandemic really did lay enterprises bare, bathing any weakness and strength is equally bright light. I could not be more proud of the team at Microart and what they have done for each other, for our customers this year and for the company. As I look forward I know we can capitalize on that amazing team and our loyal customers. The industry is changing and we are ready for those changes. The pandemic might not have created that change, many changes were already underway, but it has certainly accelerated change, and that change will make us an even better company and an even better partner for our customers.
About Mark Wood:
With more than 35 years’ experience in the electronic manufacturing world, Mark joined Microart Services Inc. 16 years ago and as the current CEO has led the firm to annual double digit growth through building effective relationships with customers.