PPE shortage could delay manufacturing ramp up

Manufacturing plant operators are having trouble finding personal protective equipment (PPE) for employees as they prepare to resume production following work stoppages related to the coronavirus pandemic.

As new health and safety protocols are adopted, the main concern for employers is that 43 percent of workplaces don't have enough PPE to prevent the spread of COVID-19, according to a recent weekly survey by the Canadian Association of Moldmakers (CAMM) and Automate Canada.

Demand continues to outstrip supply for face masks, face shields, gloves, safety goggles and hand sanitizer. The shortages have many businesses worried about their restart scenarios.

"Of course, we want to get back to work, but we can't help but think that the availability of PPE may be slowing that ramp up to some level," CAMM Board Chair Mike Bilton said in a phone interview.

"It's one thing to have the full intent to open on May 18 for FCA or General Motors but what good is that target if I haven't equipped my human resources and my ramp-up protocol accordingly," Bilton added. "If I can't get the PPE I need, maybe we better push it back a few days to be sure."

A large portion of the North American PPE supply for masks, gloves and gowns comes from China.

The head of the Washington-based National Association of Manufacturers is also talking about the need for more PPE.

NAM CEO Jay Timmons told a media interview May 7 that much more PPE is needed for society to reopen, even as manufacturing companies have switched their production lines and are cranking out more.

"We're not out of the woods by a long shot," Timmons told Yahoo! Finance. "We are working overtime to produce PPE but honestly it's not enough."

"We don't have enough to cover every single human being that's going to be coming out of their house and trying to live a normal life. That's going to take time for us to get there."

CAMM is trying to connect businesses to PPE resources as it addresses concerns raised weekly in the surveys distributed by the Canadian Tooling & Machining Association.

"I think it's a solvable problem," Bilton said. "There's no reason we can't begin to reshore and take care of our own without disrespecting other parties. I really do believe in a large movement of reshoring here in Canada, the U.S. and Mexico and in all countries around the world to make sure you take care of the house first before anything else."

Bilton likened reshoring PPE to being on an airplane when the oxygen masks drop down before passengers during a flight problem.

"The first thing you do is put the mask over your mouth. I'm a big believer in that. We have to make sure we're ready and take care of No. 1 and then take care of others," Bilton added.

The 61 respondents that offered feedback about PPE and other pandemic issues are primarily in the mold making and tool and die industries as well as the industrial automation sector.

"One thing we talk about an awful lot is the cost of COVID for companies that want to take precautions to a higher level than government guidelines and recommendations, like using thermal sensors when employees walk through a door" Bilton said.

Although workplace screening with a temperature sensing device is a recommended best practice, only 20 percent of respondents are currently using one and only 40 percent eventually plan to use one.

"There's a cost associated with that," Bilton said. "For the most part, those who can't afford to buy such things for their company because cash is tight now are doing everything they can to work with the tools they have and get creative."

Other results of the survey, which closed April 28, show:

• The number of employees out of the workplace due to isolation or quarantine is up to 73 compared to 58 the prior week; and, 43 manufacturing workplaces reported having no employees on quarantine.

• The number of employees laid off temporarily decreased to 90 employees compared to 143 the prior week.

• The number of employee furloughed increased to 515 compared to 395 reported the prior week. Two-thirds of the workplaces reported no furloughed employees, which means the 515 people out of work were concentrated in one-third of the respondents.

• Eight new employees were hired.

Some molders and manufacturers are helping churn out PPE for health care workers thanks to government contracts. Bilton said more discretion is needed in these supplier-customer relationships. He would like to see suppliers get the opportunity to become a vendor to other customers.

"We need to satisfy the front line, where the need is most, and outside of that, if there's extra product on the floor, what's stopping Home Depot from saying: Mr. Mike, can you provide me the extra 2,000 masks if you've got them," Bilton said.

Such a relationship is highly dependent on who owns the capital tooling, he added.

"If the government has cut me a purchase order and now they own the tooling, as a supplier I'm not allowed to contractually sell to anyone other than the owner," Bilton said. "But if there's no clause there, I'd hope doing the right thing would sort of trump over the request of the initial order."

Financial concerns continue to weigh heavily on survey respondents. There is some good news regarding requests for quotes, which have increased and are almost equal to cancellations.

However, a subsequent survey about how manufacturers are preparing financially to survive the global pandemic shows respondents expect consumer demand to remain depressed for six to nine months or more.

As manufacturers move along the "back to work curve," CAMM recommends they focus on liquidity and preparing cash flow models to support requests for future assistance from financial institutions.

To date, 88 percent of respondents have not received an increase to their operating lines of credit or any interest relief or deferrals from their current financial institution, and 40 percent have not reached out to their primary bank.

Decisions related to finances, restart dates and safety protocols create a tricky balancing act. "Suppliers and customers are trying to find that sweet spot of comfort where the must-haves are met, the nice-to-have are close behind, and preparations for getting back to a sense of normality is right behind that," Bilton said. "We're all trying to find that little sweet spot in this moving target of disruption."