Feel the Squeeze yet?

May 11, 2020

Feel the Squeeze yet?
Hi there,
Staggering numbers:
The US unemployment rate going from 3.5% in February to 14.7% in April, 20M jobs lost just in April.

I am certain, we all know someone by now that's been economically affected, or worse, gotten sick by Covid-19.
Let's all show some extra kindness in the coming weeks and months.
Here is a fantastic example of a local MA musician, Cara Brindisi , d oing just that... check out her Music Telegrams here, Totally dope!
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Will the Pandemic force more Manufacturing Innovation?
Manufacturing has always been a slow moving and conservative industry. The global Pandemic has created a new environment with major supply chain disruptions, social distancing at assembly lines and highly limited travel to resolve supplier problems which will force the manufacturing sector to innovate at a much faster pace.

Problem#1 Supply Chain Challenges
Ongoing Factory closures, likely more than once in the next 18-24 months, single sourced components, competition for capacity allocation , labor shortages, new regulations & changing tariffs , decreased freight capacity , production quality issues, price increases and change management are just a few of the challenges. Now multiply this for hundreds, sometimes thousands of parts/suppliers and you understand why your supply chain teams have their hands full.

Most startups and smaller companies can't invest in highly distributed/parallel, multisource supply chains and are therefore dramatically more impacted by disruption than larger companies like Apple or Ford.

Many small companies and startups have just now started looking at second or parallel sourcing for the first time.

Building new or refreshing old (often global) supplier relationships and understanding supplier specific differences quickly during this pandemic adds a lot of time and risk, often resulting in assembly/product failures, further delays, miscommunication, etc.

Developing better Supply Chain strategies and back-up processes that can quickly be executed will become essential to maintain profitability .

Problem #2 Safe Manufacturing environment
Many manufacturing and assembly lines that use hand assembly are tightly spaced for efficiency, typically ~2ft apart .

Increasing this to WHO / CDC standards (6ft.) adds significant space requirements (if available!) and therefore additional cost. Adding the appropriate PPE might potentially reduces finger dexterity which can lead to slower assembly cycles and quality problems.

While Automation might be a potential option, it's somewhat unrealistic if you have fast product cycles that ramp up and down in a matter of weeks.

Problem #3 Limited Face to Face interaction
Travel to contract manufacturers and suppliers for the necessary on-site support to quickly develop mature products and processes, specifically during critical product launch periods will be restricted for the next 18-24 months .

This will significantly impact solving the typical engineering problems and understanding the visceral challenges why something is difficult to assemble to achieve stable and reliable production process.

Of course, daily reports from the supplier or factory provide some insights but it only offers limited data from a snap shot in time and might be skewed due to misaligned incentives leading to mistrust and additional problems.

Having to launch products remotely will have most companies, smaller or large, searching for new technologies to get eyes on their lines and trustworthy realtime, aggregated data from their suppliers, a difficult task without the right technology, associated infrastructure cost and likely newly required labor skills.

Our experienced teams at NPA can assist you in this transition and develop specific solutions for your company to reduce risk and cost while increasing your operational performance. If you want to learn more about this topic, contact us .
The (bad) State of Manufacturing

The PMI Index went on a Free Fall in April down to 41.5%, it's lowest point since April 2009. New Orders contracted by 23% over the past two months, Production dropped 20% in April. Backlog of Orders is significantly weakening with another 8% drop. The overall industry freeback is strongly negative regarding near term outlook . (Source: ISM)

The drop in Manufacturing is also creating significant supply chain shortages. If your company is affected by component shortages, try EPE , they are famous for getting you the genuine OEM components you need, in a hurry.

While many of us are still on stay-at-home orders, there is some encouraging news .

Many of the startups we spoke to are able to continue their product development efforts and/or continue to build their prototypes / products for development or deployment purposes.

It shows again the advantage of startups, where small, autonomous teams can quickly find new ideas and solve challenges, while big centralized teams often get bogged down by hierarchy structures.

April VC funding was quite generous for the 54 Boston Startups that secured the $3.5 Billion (incl. one of NPA's Startups to watch). Find out about the fresh dough here . (Let's hope they didn't also apply for PPP) (Source: BOSTINNO)

The Massachusetts Innovation Network is now accepting applications for the 2020 New England Innovation Awards Apply here .

Techstars is holding their Air Force Accelerator Virtual Demo Day on May 14th. Find sign-up info here .

Our long term friends from HRResolved offer outsourced Human Resource services which might come in handy during these challenging times. Check them out.
Contact us if you need engineering, supply chain or manufacturing help or if this fresh dough is burning a hole in your pocket.
So many of NPA's Hardware startups to watch are actively contributing to the many COVID-19 efforts.

THANK YOU ALL for saving lives!

Altiostar deploys it's open virtual RAN software for India’s Bharti Airtel across multiple major cities in India and also announced it is one of the founding members of the new Open RAN Policy Coalition . More about it here . (Source: Fiercewireless) & there (Source: PRNewswire)

Desktop Metal had a layoff in April. The company provided no info publicly as to how many people were affected.

Formlabs received FDA emergency clearance to print ventilator parts. More details here . (Source: ZDNet).

Locus Robotics announced a new Rapid Assessment & Design Service for the deployment of AMRs (Automated Mobile Robots). Find out more here (Source: SupplyChainBrain).

Nuvotronics successfully participated in NASA’s mission to remotely measure Snow Water Equivalent, which is critical for water resource management and climate studies. They provided advanced wide band antenna elements for these measurements. More here . (Source: Cubic Press Release)

Rise Robotics (updated from April) se cured a total of $7.9M of additional funding (including the $3M in seed funding from MIT's spin, The Engine we reported in April). More about it  here. (Source: SEC)

SparkCharge secured $3.3M in seed funding to f urther deploy their Portable UltraFast Electric Vehicle Chargers . More about this here. (Source: SparkCharge)

Tokyo has some serious Corona issues and requires you all to Facetime them immediately. Kinda fishy (Source: NBC)

The Brits are burning 5G infrastructure at the stake to eliminate Corona. Aha, make sense, sure must be right. What are you smoking Pal (Source: UK Independent)

Haven't perfected your sourdough bread yet? Here is the fitness tracker for your dough. Rise and Shine (Source: The Verge)

What happens when you combine music, Joe Rogan, and probability ? The Infinite Monkey Theorem Experiment (Source: The Pudding)

Some brands that still have solid marketing budgets made some pretty cool and funny ads during the crisis. Enjoy!
Burger King stayhomeofthewhopper
U ntil next time!

P.S. Contact us we are looking for support, both in our Purchasing & Quality teams. Most assignments are great for part-time work !
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