Tag: production

OM in the News: A Soap Maker Cracks the Code to ‘Made in America’

A $7.95 bottle of Bath & Body Works (BBW) foaming hand soap used to take 3 months to put together. The pieces had to travel more than 13,000 miles from China, Canada and Virginia to the company’s Ohio distribution center.

Bath & Body Works decided it needed to get new products to market more quickly. The result was a production initiative with little parallel in corporate America, writes The Wall Street Journal (July 26, 2023). The new campus includes 10 manufacturers and millions of square feet of production and warehouse spaces, with 5,000 employees working there.

Now every step of production occurs at plants just feet from each other on the company’s dedicated “beauty park” near Columbus, Ohio. One factory makes the foaming pump and mechanism. Another makes the bottle itself, a third makes the label, a fourth makes the soap, fills the bottle, attaches the label and screws on the top. A fifth packages it. Getting a bottle to distribution is down to 21 days and a few miles. A majority of Bath & Body Works products, which are sold in its own stores, are made on site.
BBW persuaded companies throughout its supply chain to move to an Ohio city near its HQ

Bringing production closer to home, often called “reshoring,” has become a priority for many companies. Disruptions from Covid-19, severe weather, trade wars, geopolitical tensions and stuck ships left consumers without the couches and hot tubs they wanted. While competitors struggled with shortages, BBW’s suppliers on location shared raw materials and even employees. (Persistent supply-chain issues are leading to a factory building boom, with spending at its highest level in at least 20 years).

But moving production to Ohio wasn’t easy. Factories had to contend with planning officials, high labor and construction costs and even endangered bats. And BBW had to persuade its best suppliers to move. The plus for suppliers was continuing to do business with volume guarantees from BBW for a set number of years. The minus: spending millions to relocate production and buy new equipment. There was a lot of supplier resistance to overcome.
The BBW campus can be a model for other companies and communities. It has attracted an Amgen pharmaceutical plant. Intel just chose the area as the site of a $20 billion semiconductor facility. Intel said the plant would attract dozens of new local suppliers, including semiconductor equipment makers and other materials providers.
Classroom discussion questions:
1. What makes reshoring so difficult?
2. What are the advantages BBW gained in this major move?

OM in the News: Vaccine Manufacturing in U.S. Races Ahead

Covid-19 vaccine manufacturers are ramping up production, churning out far more doses a week than earlier in the year, progress that is accelerating mass vaccination campaigns in the U.S., writes The Wall Street Journal (March 22, 2021). This is good news and is a followup to our blog (March 21, 2021) how making Covid vaccines is taking away from production of other important drugs. This is a nice place to introduce Figure 7.1 (the four process strategies) to your students.

After a slow start, Pfizer and Moderna have raised output by gaining experience, scaling up production lines and taking other steps like making certain raw materials on their own. Pfizer figured out how to stretch scarce supplies of special filters needed for the vaccine production process by recycling them. (The filters remove certain components from the vaccine during production.) And the company added more high-speed vial-filling lines to its plants.

pfizer2

Moderna took 3 months to make the first 20 million doses of its vaccine last year, but now it is making roughly 40 million a month for the U.S. The U.S. monthly output for the authorized vaccines is expected to reach 132 million doses for March, nearly triple the 48 million in February.

Moderna wasn’t able to produce at maximum capacity right out of the gate because of the need to introduce new equipment and processes in stages. It was still training newly hired workers and encountering issues like equipment malfunctions and holdups in getting replacement parts such as filters. It is planning to further speed output by boosting the number of doses in each vial to 15 from 10. “There has not been a single week since we started that we have not had issues,” said a company exec.

Some 2.5 million people in the U.S. are vaccinated daily on average, up from about 500,000 in early January. The increased output should be enough to fully vaccinate 76 million people in the U.S. in March, 75 million in April, and 89 million more in May.

Classroom discussion questions:

  1. Which process in Figure 7.1 of your Heizer/Render/Munson text best fits the vaccine manufacture?
  2. What factors had made the vaccine so difficult to produce?