KCC Manufacturing
Prior to the pandemic, KCC Manufacturing had been growing rapidly, averaging about 32% per year in the eight years preceding 2020. Credit: KCC Manufacturing

COVID-19: One Year Later

March 15, 2021
There are multitudes of stories to be told about how U.S. manufacturers survived, struggled and went about their business in 2020 as the COVID-19 pandemic raged. Here are three accounts.

COVID-19 hit no two manufacturers alike in 2020. At KCC Manufacturing in Louisville, Kentucky, the first hint that the disease would become problematic occurred when the governor ordered the shutdown of schools and daycares in the state, with little warning. For families with two working parents, or a single parent, the directive created immediate childcare challenges.

Businesses that employed those parents faced immediate challenges as well. Within about a week of that March 2020 announcement, says Joel Strieter, KCC Manufacturing president, “we had 70 or 80 [employees] take a leave of absence.”

With a workforce of about 650, that’s no small percentage of workers gone without much warning. And timing frequently is everything in manufacturing. Given the unexpected absences, “We had to move our promised lead times out, and we missed a number of shipments from a timing perspective,” the company president says. “Then we were struggling to make our production goals, our production schedule, for the next six or seven weeks.”

At Graphicast Inc. in Jaffrey, New Hampshire, the company’s first interaction with the virus that causes COVID-19 wasn’t bad, initially. Deemed an essential business in the state, this 20-some person job shop stayed open as other businesses shut down. Moreover, while Graphicast provides services to a number of different industries, its single biggest market is medical industry suppliers.

“One of those medical suppliers makes part of the diagnostic equipment for COVID, so we had one customer who we just couldn’t make stuff fast enough for,” says Val Zanchuk, Graphicast president. “So during that April-May-June timeframe, we felt pretty good about our business. And we felt we were part of the nationwide team helping to attack the virus.”

Then the wheels came off.

And over in Greene, New York, Raymond Corporation doubled down on its long-time embrace of the Toyota Production System methodology and lean principles to battle COVID-19. The forklift truck manufacturer shut down for two weeks “in an abundance of caution” when company leaders saw COVID-19 cases start to rise in the state, explained Tony Topencik, senior director of operations and quality, and used that time to develop standards for the new reality, put protocols in place and implement some engineered solutions.

“I think that was key to help minimize the disruption internally,” he says. Externally, Raymond’s supply chain partners were facing challenges as well, and when your supply chain suffers, you suffer.

There are multitudes of stories to be told about how U.S. manufacturers survived, struggled and went about their business in 2020 as the pandemic raged. Here are abbreviated stories of three of those manufacturers, who also share how they are faring today.

Rapid Growth is Stifled

KCC Manufacturing is an employee-owned manufacturer that makes roof curbs, curb adapters and a host of other sheet metal products associated with HVAC equipment and metal building systems. It had been growing very rapidly prior to 2020, averaging about 32% growth per year in the eight years before the pandemic.

“We thought [2020] was going to be another 30% year, and we were on track for that in January, February and most of March,” Strieter says. Then the slowdown in new orders began to manifest, and the company began to eat through its backlog of orders. Shortened work weeks, temporary pay cuts (now restored) for salaried employees and a Paycheck Protection Program loan helped the company weather the pandemic’s effects from a dollars-and-cents perspective.

Meanwhile, KCC Manufacturing also had to address COVID-19 in the workplace. While there was never a state-mandated shutdown, the manufacturer early on briefly closed its doors twice after the first two cases of COVID-19 were detected, in accordance with Centers for Disease Control and Prevention guidelines.

Over the past year, KCC Manufacturing has implemented about 50 initiatives to keep its workers safe, including propping open bathroom doors (with appropriate blocking mechanisms to avoid visibility inside) so employees don’t have to touch door handles; deep cleaning; rapid testing and contact tracing. In one instance of contact tracing, individuals in contact with a COVID-positive or probable-positive employee included a supervisor, the supervisor’s manager and the plant manager.

“So it wiped out the leadership for about three days while we were waiting for tests to come back,” Strieter says.

KCC Manufacturing’s initiatives are robust, tested and revised over time. But they aren’t foolproof. The manufacturer has had about 90 people test positive among its workforce. “Of those 90, there might have been five that we are reasonably certain were [infected] at work,” Strieter says. “The rest of them, they caught it from somewhere else and didn’t give it to anybody else.”

Communication is a key component of KCC’s COVID-19 response. Early in the pandemic, Strieter began putting together a daily video to share with employees. The content of the videos was drawn in part from information gathered at the company’s plants by the “A Team,” as Strieter called them. This team included individuals at each facility and other areas, who shared with Strieter via the team leader what was on the minds of employees.

“Then I would put out a YouTube video that everybody could kind of view, and I would say, ‘Here’s the facts. Here’s what we know. Here’s what the governor was talking about, [and] we’ll have a KCC response as soon as we figure out what the details are,’” Strieter says. “Trying to keep people a little bit ahead of all the changes that were happening in a very short period of time.”

The videos are now a once- to three-times-a week occurrence, rather than daily. In addition to COVID-related information, the president provides a business summary as well as a look ahead, discusses celebrations around safety actions, “and I always try to end on an optimistic note.”

As of mid-January 2021, business remains slow at KCC Manufacturing. Strieter regularly monitors 14 leading indicators to gauge the business environment. At the worst of the pandemic, 10 of the indicators were negative, two were neutral and two were positive. In a January snapshot, seven were positive, two were neutral and five were negative.

“So I see it changing; it’s just changing very slowly. It’s a bit halting,” he says. “I don’t think our business has turned the corner.”

Our Quarter of Discontent

Over in New Hampshire, business was chugging along rather strongly for Graphicast in 2020 through June. Then the bottom dropped out in what Zanchuk calls “our quarter of discontent.”

While the company’s COVID-related customer continued to demand “everything we could make,” many of its other medical device-related customers could be classified as participating in the elective-surgery supply chain, and demand there began to slow. So, too, did demand from customers in other manufacturing verticals, “who were, at that point, beginning to feel the real impact of the virus,” Zanchuk says.

As a result, revenue declined 41% in the third quarter of 2020 compared with the previous year’s third quarter—“ a huge drop,” he says.

On the plus side, the company has had no employees test positive for COVID-19. “That doesn’t mean we haven’t had people out because of potential exposure, but they’ve always come back negative. So someone may be out of the operation for a week or so, until they get a negative response,” Zanchuk says.

Part of Graphicast’s clean COVID record may be due to the rural nature of Jaffrey, its home base, which boasted a population of about 5,200 in 2018. As Zanchuk noted, many people don’t live in close proximity to their neighbors, potentially helping to limit exposure to the disease. Additionally, Graphicast’s employee population is small.

Still, one can’t overlook the company’s own efforts to keep its population safe. Not only does Graphicast follow CDC regulations, but it has added several initiatives of its own. For example, every week and a half, Graphicast conducts what is called pooled saliva surveillance testing. A saliva sample is collected from every employee and is shipped overnight to a lab, which combines the samples and tests for COVID-19. Twelve to 18 hours later, the results are in and Zanchuk posts them in the shop.

“If it comes out negative, then [we’ve] screened the whole company,” he says. “If it came back with a positive reading, we’d have to individually test people. This way, it’s not very invasive.”

Graphicast also disinfects its approximately 12,000-square-foot structure every day. The company uses an electromagnetic sprayer, which means that the disinfectant can wrap around and get behind objects. In short, it’s not simply line-of-sight cleaning.

“That way, we’re a little more assured that we’re getting every nook and cranny possible,” Zanchuk says. “We haven’t had anyone out with the flu yet either, so we may be keeping the place pretty clean for all things, including COVID.”

How is business looking today, post the precipitous third-quarter drop? Demand began to rebound in the fall, although it was still on the slow side. And the first quarter of 2021 looks strong, although it has not quite rebounded to the same levels it reached in the first quarter of last year.

“We’re not spectacularly high, but it’s definitely solidifying,” Zanchuk says.

A Vote of Confidence for TPS

Last year could have been much worse for Raymond Corporation from a vehicle- numbers standpoint. While the industry suffered a sudden COVID-19 stop in orders, demand rebounded quite quickly, says Raymond’s Topencik, and his company concluded the year with volume down about 5%. What changed more obviously was the makeup of the customers; demand swelled from essential businesses like food distribution and medical supply companies even as it contracted elsewhere.

While Raymond said there was no playbook about how to address a pandemic, in truth it seems that TPS is that playbook. It provided Raymond with the foundation by which the company could meet the demands of customers, combat employee absenteeism, develop and implement strict COVID standards, and maintain safety and quality levels—even as out-of-control external forces flexed their muscles.

“This all wouldn’t have been possible if we didn’t really follow our continuous improvement methodologies that we use day in and day out with our Toyota Production System,” Topencik says.

 Moreover, while Raymond developed robust processes to minimize internal disruption, it also took those processes to its suppliers, which were facing challenges as well. “Whether it was local suppliers or suppliers overseas from whom we were importing goods, we were seeing negative impacts to the business,” the Raymond executive says. By “working with our suppliers and moving some of our supply chain requirements around between suppliers, we are working as a team externally as well. That’s what also helped us to minimize some of the impacts we were seeing.”

And that teamwork hasn’t stopped. “Even today, we’re seeing some challenges with material shortages and some of our suppliers,” Topencik says. “And we are also helping our suppliers acquire those raw materials. In essence, making sure that we’re backing each other up in critical conditions.”

Raymond now knows its suppliers better than it ever has before. “And that’s a good thing,” Topencik says.

Business today? It’s not back to normal, “but it’s slowly getting there,” he says “I believe for 2021 we’re going to see maybe a 2% to 3% increase. It’s slowly creeping back.”

Lessons Learned from the Pandemic

No doubt plenty of lessons remain to be learned from COVID-19, but there’s no lack of them now. For example, KCC Manufacturing had no real business continuity or contingency plan heading into the pandemic, Strieter said. Now it does.

“I think the smartest thing that we did as a company was put together a team of people that said, ‘Where are we not prepared for something bad to happen?’ and come up with policies and procedures” to address those gaps, he says. Graphicast has grown more comfortable operating in a virtual environment, given the continued social distancing measures. For example, “If customers are interested in what we’re doing, it’s easy to walk around the factory with Zoom on a smartphone and do a factory tour, and have them ask questions,” says Zanchuk. “All of that was possible before, but [the pandemic] really pushed it along.”

And for Raymond, the pandemic provides more fodder for continuous improvement. “As a result of COVID being introduced, you start to see where [hidden] problems are,” Topencik says. “You can identify them and solve them one by one.” 

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