- A textiles company in Maine called American Roots pivoted its factory to produce much-needed medical supplies like face shields, masks, and gowns.
- But companies like it have run into steep obstacles and widespread confusion when it comes to managing supply chains and selling to hospitals and governments.
- American Roots co-owner, Ben Waxman, likened the situation to “having an air traffic control tower with nobody in it.”
- President Donald Trump has the authority under the Defense Production Act to manage supply chains and force companies to produce these goods, but he hasn’t aggressively used it.
- One supply chain management expert told Business Insider that in a time of crisis, the US needs “a speedy execution and guidance coming from one single authority,” meaning the federal government.
- Visit Business Insider’s homepage for more stories.
When the United States began veering into an economic crisis last month, Ben Waxman, the co-owner of a Maine textile company, sat in a Chicago airport and did some back-of-the-envelope math. He realized his company was set to lose 60% of its projected revenue.
American Roots, which manufactures US-made fleece apparel such as hoodies and vests, lost an additional 20% in the following days, and Waxman was forced to lay off 80% of his workforce.
“Everything came to a screeching halt as the crisis began to break out,” Waxman told Business Insider. “It was pretty clear right out of the gate that our products were not going to be a priority for the next foreseeable future.”
Waxman began researching how his textile factory could instead begin producing protective gear for doctors and nurses treating coronavirus patients.
So he partnered with another Maine-based company, Flowfold, and hired back almost all of his employees just five days after laying them off. The workers will begin production on Monday to fulfill an initial order of 10,000 face shields, and Waxman said his design team has also begun working on face masks and surgical gowns.
Waxman’s company is far from the only one to step up. As frontline health care workers across the country report dire shortages of masks and other personal protective equipment, a number of large and small US factories have tried to pivot to manufacturing essential medical supplies like PPE and ventilators.
But pivoting factories to produce entirely new products overnight has been fraught with obstacles, red tape, and confusion. And manufacturing the products is just one part of the problem — when it comes to selling the items, companies have been met with a chaotic, frenzied marketplace, where governors have reported eBay-style bidding wars as states scramble to place orders.
“It would be misleading for me to say that this has been a smooth transition. It has not,” Waxman said. “This is like having an air traffic control tower with nobody in it.”
Trump has the authority to manage the widespread production of vital products, but has mostly declined to use it
Waxman said he was baffled that the country seemed to have no strategy for managing a disrupted supply chain and ensuring that US companies could swiftly create and sell vital products.
He added that he received no assistance or guidance from the government as he converted his factory.
“Why wasn’t there a plan if we were cut off from China? What the hell is the plan to make a gown, a face shield, a mask in America?” he said. “And if there wasn’t a plan, why wasn’t it stockpiled at a level where we don’t have nurses wearing trash bags in New York?”
President Donald Trump has the authority under the Defense Production Act to manage the widespread production of essential goods, but he has not aggressively used his powers to boost medical supply manufacturing.
So far, Trump has only used the act to force General Motors to ramp up ventilator production.
In a March 26 press briefing, Trump told reporters he didn’t want to use the act more forcefully because American companies “don’t need it.”
“We say, ‘We need this,’ and they say, ‘Don’t bother. We’re going to do it,'” Trump said. “We’re dealing with great companies. They want to do this. They want to do this. They’re dong things that, frankly, they don’t need somebody to walk over there with a hammer and say, ‘Do it.'”
Waxman agreed that companies like his need no coaxing and desperately want to help. But he has grown irate at the lack of infrastructure in place for a nationwide crisis and has watched in growing horror as doctors and nurses reuse masks and don rain ponchos to treat patients, while his company has struggled to sort out basic supply-chain logistics such as how to get raw materials, and who he’ll sell his products to.
“It’s like, we can make these. Tell us who to sell them to — here’s the price,” Waxman said. “We’re not making a profit on this. This is break-even stuff because we care about our country. We care about putting our workers to work, and we have a resource.”
He continued: “I’ve got 45 machines sitting idle right now that should’ve been running two weeks ago.”
An expert in supply chain management says companies need ‘guidance coming from one single authority’ — the federal government
The problem manufacturers like Waxman face is the lack of a centralized command-and-control structure in the US for these crises, according to Nick Vyas, an expert in supply chain management and a professor at the University of Southern California.
“What’s happening is that everyone’s trying to do individual demand assessment, individual supply chain planning. And the problem with that is we just have such a fragmented industry,” Vyas told Business Insider.
The hospitals that desperately need PPE range from small to mid-sized regional outfits to major networks, each with urgent needs and multiple players involved, resulting in frantic competition for basic medical supplies.
On top of that, local and state governments are directly bidding on those same supplies, in some cases competing with the federal government.
That means that companies have been forced to decide who to sell to — either selling to the highest bidder, or, in some cases, trying to determine on their own who needs the goods the most.
That’s how Flowfold, the company partnering with American Roots to produce face shields, organized their orders, according to the chief operating officer, James Morin.
Morin told Business Insider that Flowfold reached out to medical facilities in the Maine area and sought direct feedback on what they needed.
“We focused first on hospitals. Then after we got some of our hospitals up and running and got their approval — most importantly, to make sure that our design was safe and effective — we then went out and we started to contact our local nursing homes regionally, because they are most at risk,” Morin said.
Vyas said companies like American Roots and Flowfold are handling the situation exactly right, and companies in similar dilemmas should firstly ensure their products are built up to health and safety standards. Then, they should try to focus on local markets so they don’t have to worry about complex transportation and supply-chain logistics.
“Reach within your local 150- to 250-mile radius and then just address that market need,” he said. “Then, once you get used to it, you can expand your circle of radius outside of that, and become a national provider.”
Vyas said the US could learn a lesson from countries like China, which used its centrally planned economy to react quickly and order factories to meet hospitals’ needs.
“Obviously we are a democratic society, but in an event like this, we need to have a speedy execution and guidance coming from one single authority, which is the federal government in this case,” Vyas said.
Waxman said he didn’t want to be overly negative, and praised state and local officials in Maine for handling the outbreak as best they could.
But he said without direction from the federal government, his company has spent an enormous amount of time and resources simply researching what products are needed, what his company can produce, and how to coordinate a supply chain of materials.
“If somebody from the federal government came in and said, ‘We need you to make 200,000 face shields, here’s your supply chain,’ and we could do it, that would be incredible,” he said.
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