Small Business Manufacturing in a COVID world

Can you believe that the first month of 2021 is behind us? In the blink of an eye, January 2021 is gone! I will admit that I could not wait for 2020 to end and 2021 to begin. After months of dealing with the pandemic, business uncertainty, social unrest, and a very contentious election, the arrival of 2021 was a welcome sight. Yet, with the first month behind us, it does not feel like anything has changed. We are still dealing with the impact of COVID, the economy is still slow, and social unrest continues, as does the deep political divide. As a small business owner, all this leaves me asking the question, “Is there any reason for near-term optimism?”

At KTM Solutions, our business depends on the health of the industries we support, particularly as they invest in US manufacturing. Our primary customers are in the aerospace, automotive, and energy industries. All of these industries, some to a larger extent than others, are still reeling from the impacts of COVID or trying to understand how the new government will impact investment decisions. For this reason, I find it hard to be bullish on the next six months. COVID has changed how we approach our customer base. Some of our customers (particularly those that support air travel) are struggling along with the airline industry.

Those not impacted by COVID share concerns about government changes in energy policy, foreign trade, and taxation of businesses. As such, capital investment, which is the source of much of our project income, is being held close until companies have more confidence. Yet, I am confounded by the growth in the stock market. The gains continue. Such a strange world. Is 2021 just the second round of 2020?

How is a small manufacturing business to survive during these times? We have to keep moving forward and doing the hard work. Due to political pressures, decisions were made in the spring of 2020 that continue to impact the economy.

From a manufacturing standpoint, even though the direction to close down businesses happened months ago, the supply chain has not recovered. The shutdowns revealed the fragility of the supply chain. I also believe the pandemic is used as an excuse by some suppliers to underperform.

Even so, I am convinced that these disruptions will eventually heal, and manufacturing will come back—but my concern is that this could be a much longer recovery than we expected. In the end, those companies that are still standing will be in a good position to see phenomenal growth. How many will be able to hold on?

To survive, we have to shift our short-term focus without letting go of the long-term vision. KTM Solutions decided in March 2020 to embrace the reality of the pandemic impact. We pivoted our business to produce polycarbonate partitions. Clearly, this was a significant departure from our core business. KTM Solutions is in business to provide professionally engineered tooling solutions for manufacturers of all sizes and industries. Our primary customers purchase professional engineering and turnkey jigs, fixtures, lifting devices and custom machines to support their production. Most everything we design and build unique (meaning only one copy is usually required). Our manufacturing is more like a job shop.

The partition business could not have been much further from our normal business. Consider: structural steel, single copy fixtures and jigs versus multiple copy polycarbonate barriers. If someone would have told me a year ago that we would be producing plastic partitions, over 2000 copies per month, I would have said they were crazy. But we were fortunate to identify this need early. In fact, our early adoption put us in the position of “thought leader.” The partition business paid the bills for the last two quarters of 2020.

We know the partition business is only short lived. We look forward to the return of our normal business. I will be delighted to see our long-time customers begin to thrive again. We long for the day when US manufacturing investment rebuilds to pre-COVID volumes. As a supplier to the aircraft industry, we look forward to the return of air travel. After all, this is our core business—and who does not want to see a return to some semblance of normalcy?

The partition business also taught us a lot. At KTM, we learned how to streamline design process for production applications. We also developed a smooth production line, learned to quickly hire and train new workers, and developed a flexibility that we did not have prior to this experience. Lessons learned from the partition business also opened up an avenue to design and develop a line of machine guarding that we might not have developed otherwise. Time will tell if this is a product KTM Solutions should add to our tooling portfolio.

So, what can we do as small businesses manufacturing in a COVID world? We need to do what is necessary do survive. We need to approach opportunities without fear. We need to find a way to stick around to provide our traditional services when the dust settles. Our employees need us to survive. The larger companies will need us when their business returns. We need to use this opportunity presented through circumstance to be flexible, pivot to new things, and take the chance to learn. Look for ways to use the investment, perhaps a lesson from the school of hard knocks, to better our core business. Hunker down and learn to be efficient. We have to do our part, do the hard work, but remember that the results lie in the hands of a higher power. That is why I continue to pray that the good Lord provide the opportunities to continue and allow us to deliver value to our customers, new and existing, wherever they may be.

–

 

Paul V. Kumler, P.E., is president of KTM Solutions, an engineering company that services the aerospace and large-scale manufacturing industries. KTM Solutions designs and builds tooling supporting a broad clientele and various industries. (www.ktmmechanical.com) The company is headquartered in Greer, South Carolina, with remote offices in Charleston, South Carolina. Mr. Kumler serves in several volunteer roles including the SC Aerospace Advisory Board. Mr. Kumler, a professional engineer, is licensed in Louisiana, South Carolina, Texas, and Washington. He is married to Ginger A. Kumler. Together, they have two grown children and three grandchildren.