Our Experience Working Overseas for the First Time in 2 Years
As many can attest, it’s been a long 2 years since the COVID-19 pandemic changed the world. In an industry where our work crosses continents, the travel restrictions and supply chain difficulties that came with the pandemic necessarily sparked vast changes in how we do business.
As we have begun traveling internationally again for the first time after a 2-year hiatus, we thought we’d share our experience.
Read on for an inside look at what business was like for us before COVID, how we adapted to the initial shutdowns, and how things have changed since, both for our business and for the global manufacturing industry as a whole.
Traveling and Working Overseas Prior to 2020
Before the pandemic, we visited our offices and manufacturing partners in Asia several times a year. In a typical year, we would visit our Taipei office regularly and work on-site with our manufacturing partners across Southeast Asia for 2-3 weeks every quarter.
In 2019 alone, we made seven trips to Asia.
There were times we booked a trip within hours of a flight to be on-site for an urgent project issue. There were always multiple flights available from all major U.S. cities, and we could be in Hong Kong or Taipei within 16-18 hours.
Our engineers from Taiwan and China were able to travel freely to all factory sites on a moment’s notice with minimal hassle. Visas and local customs requirements were relaxed everywhere except China. But even there, having local agents made entry possible without much thought or delay.
Back then, it wasn’t uncommon to run into other Americans at almost every hotel we visited in the region.
Hong Kong, in particular, was filled with expats. We had American friends living in the city as well as in Singapore. Our return to the U.S. always took us through Hong Kong, so at the end of a long trip we often blocked out a couple of days to spend in the city.
At the time, we had several NPI projects in process, at every stage, and it was more efficient to manage them face-to-face with our engineering team and clients.
In 2019, Macrotech was also in the fourth year of an effort to reduce our clients’ risk of being overly dependent on Chinese manufacturers. Rising labor rates in mainland China coupled with tariffs imposed by the U.S. ramped up our sense of urgency to diversify our roster of manufacturing partners.
To supplement our Chinese factories, we worked to qualify new factories in Thailand, India, Vietnam, Malaysia, and Taiwan.
How Macrotech Adapted to the COVID-19 Shutdowns
Our Business Continuity Plan
In the wake of an event that essentially closed down the world indefinitely, our immediate challenge was to ensure the continuity of all vital business functions, including manufacturing, engineering, sales, customer service, IT, and finance.
Macrotech’s Business Continuity Plan was immediately put into play.
This operational risk and recovery plan was an incident-specific, site-specific analysis of a range of threats (natural disaster, fire, terrorism, geopolitical events, cyberattack, utility outage and yes, pandemic).
But putting the program into play at every site simultaneously was unprecedented.
Adopting a Virtual (and then Hybrid) Work Environment
As a global organization, we were adept at functioning in a virtual environment. However, we were used to communicating between offices, not between several individuals, all forced to work from home.
We assessed the IT requirements to mitigate disruption and went entirely virtual until local restrictions were lifted on in-person work.
Even then, due to the requirements of our different business units, we found that our organization’s efficiency and production were improved by incorporating a hybrid model going forward.
Adjusting Our Manufacturing
To recover and resume normal business function within our 30-day goal, we:
- Shifted production from one facility to another
- Increased manufacturing output at operational facilities
- Prioritized production and reallocation of existing inventory
This disruption to business-as-usual gave us an opportunity to reassess how we did business. In some cases, facilities shined when given the opportunity to capture more work. As a result, we found valuable partners.
Because we spent 2019 qualifying several alternative sites, we were running at capacity again within weeks. Not all of our suppliers and their supply chains were so fortunate. Because of this, our component and raw material lead times became unpredictable, which affected our manufacturing lead times.
To mitigate the lead time disruption, Macrotech significantly increased on-hand inventory of vital and commonly-used raw materials. Where we would normally keep a 4-8 week supply, we were maintaining a 12-16 week supply.
Most of our clients had been operating with Just-In-Time inventories, but with supply chains disrupted we no longer had the luxury of on-demand builds. We worked with our clients to plan through at least Q3 of the current year, if not Q4.
We had hoped these measures would be necessary only for the short term, but as supply chain issues compounded (and, in some cases, remain so to this day), a short-term solution became a way to rethink how we do business overall.
Rethinking Business Travel
Without the ability to travel, responsibilities were shifted to local employees to be the eyes and ears on the factory floors. Virtual “visits” were the new normal. The savings we realized through our inability to travel forced us to reimagine business travel once the borders opened again.
Team members given additional responsibilities for local oversight rose to the occasion and made it possible for us to operate seamlessly without senior management’s presence on-site for more than two years and counting, in some cases.
How Working Overseas Is Different Today
Supply Chain Challenges and Logistics Disruptions
Obtaining components and raw materials continues to be a challenge. Our procurement team now plays a more prominent role in our day-to-day operations, as it’s critical that we have safety stock of every vital component on hand.
Logistics disruptions are dynamic, with ports closing or understaffed due to local restrictions or COVID outbreaks. All manufacturing organizations need to be agile, ready to move product through a variety of lanes.
While the transition sometimes involves added cost, negotiating with providers is more important than ever to keep product moving while mitigating a hit to profits.
Travel restrictions are being eased globally. However, some areas are slower to open than others. For example, we were able to enter Malaysia for the first time in 2 years just last month, and we still cannot freely travel to Taipei without a significant time commitment for mandatory quarantine.
There is also uncertainty regarding the timeline for travel abroad.
While the U.S. COVID test requirement for re-entry has been lifted, COVID tests are still a common requirement for entry to corporate offices in Asia. If an employee were to test positive before a client visit, they would likely need to extend their stay by 3-5 days to quarantine.
To mitigate this uncertainty, companies like ours need to have contingency plans for our employees who travel abroad. In our case, hotel stays are being supplanted by apartment or Airbnb rentals, giving travelers the security of constant accommodation in the event a positive test necessitates an extended stay.
Because of this, every opportunity for on-site meetings involving international travel is evaluated through a different lens. Travel that would have been approved without consideration two years ago is no longer deemed necessary when weighing the benefits and potential pitfalls.
Face-to-face meetings and factory floor visits are still critical to our business, but the parameters have changed. For example:
- We no longer have the luxury of last-minute trip planning.
- Pre-trip checklists and briefings on local requirements and restrictions are now part of our travel routine.
- Several U.S.-based businesses with operations abroad, operating within local guidelines, require testing for entry to many of their offices. As a result, we are doing more off-site meetings with clients to work around on-site limitations.
Macrotech: Your Partner for Today’s Overseas Manufacturing Needs
The past 2 years have shown us all the value of being prepared for the worst and being flexible enough to adapt to quick and constant changes. These values have always been crucial to success in overseas manufacturing, and they are even more critical today.
If your company is looking for a manufacturing partner that exemplifies these qualities, consider partnering with Macrotech. We have a track record of bringing our clients through difficult times, and we can do the same for your organization.