KALAMAZOO — As they deal with the effects the coronavirus pandemic is having on their bottom lines, businesses and organizations are engaging in some in-your-face thinking to generate revenue and keep their employees working.
Late last month, Goodwill Industries of Southwestern Michigan took over the production of face shields from Kalamazoo-based Keystone Solutions Group, an engineering, product development and medical device contract manufacturing company.
Keystone designed and originally produced the face shields at its location in the Oshtemo Business Park.
Goodwill will sell the face shields directly under the brand 420 East, while Keystone will continue to act as the distributor. The 420 East brand is a nod to the address for the Goodwill facility on East Alcott Street.
John Dillworth, president and CEO of Goodwill Industries of Southwestern Michigan, said the face shields will be sold to the organization’s customers, some area nonprofits, and Goodwill affiliates throughout the United States. The face shields will sell for $3 apiece and will be packaged in 50-count boxes.
“Our biggest customers will be other Goodwills across the country,” Dillworth said. “There are 140 across the U.S. and a lot of them have come to the conclusion that face shields are better than face masks.
“If you look at how some people are wearing face masks, it’s embarrassing because they’re not wearing them properly and they’re constantly adjusting them, which means they’re touching their faces. The face shield keeps you from doing that because of the plastic covering.”
A group of 16 Goodwill team members are making the face shields and will double production this week to 12,000 units. Dillworth said he anticipates production to increase next week to 22,500 face shields when additional plastic and foam supplies arrive.
“We are a little behind on production versus demand,” Dillworth said. “When we’re getting orders now, we’re shipping them out three days after we get them.”
He said his organization wouldn’t have been able to source the supplies without Keystone, which already had contacts for the foam and plastic used to make the face shields.
“We’re buying elastic for the face shields and the packaging material and labels,” Dillworth said. “We had some better sources of more cost-effective packaging supplies.”
The for-profit/nonprofit collaboration was an outgrowth of conversations that took place between Dillworth and Jim Medsker, Keystone’s CEO and a member of Goodwill’s board since 2013. Medsker had served as board president of Goodwill from 2018-2019.
“We had identified that we needed face shields for our employees, and at the same time (Jim) reached out to me and said they needed a workforce to meet the capacity to produce face shields,” Dillworth said.
To produce the volumes needed to meet the demand for face shields, Keystone would have had to “staff up,” according to Vaughn Gerber, the company’s director of central engineering.
“Part of the reason we decided to hand this off is that at the same time we started making the face shields, we also started the process of manufacturing test kit swabs,” Gerber said. “That’s really where our focus has been, on launching sterile test kit swabs.”
The demand for these swabs is upwards of hundreds of thousands and growing, primarily due to the COVID-19 pandemic, Gerber said.
“We’ve actually had interest for the test kit swabs in higher volumes than that,” he said. “The challenge is getting the raw swabs in.”
Despite working with limited resources, Keystone has remained fully operational and is considered an essential business because of its product line. The company has 60 employees, which includes a production team that continues to come in to manufacture various medical equipment and supplies and an office staff that is currently working from home.
Keystone’s products are shipped to customers in the U.S. and North America who in turn may ship them worldwide.
Other than one product line where there has been a minor softening, “we haven’t seen a sharp decline in the demand for products that we make,” Gerber said. “This has allowed us to keep our crew working here.”
The company began making face shields on April 7 with a goal of producing 4,300 per day. Gerber said the production continued through that week. The following week, Keystone handed off the raw materials to Goodwill and helped the organization set up its assembly process.
Dillworth said Keystone had a good design for the face shields, which hold up well and can be cleaned with common products such as Windex.
Had Keystone continued with the face shield production, the company would have had to hire additional employees, while Goodwill had people out of work who wanted a job.
“Goodwill can manufacture and distribute through their own sources, and we do have some accounts that we are going to be distributing to as well,” Gerber said.
Everyone involved in the collaboration is benefitting from it, Dillworth said. He cited Medsker as being instrumental early on in putting Goodwill on the path to ISO certification, creating a clean room for production work, and upgrading the skill sets of employees.
“When it came to contract manufacturing, this has enabled us to get a few customers we wouldn’t have had otherwise,” Dillworth said.
The face shield production also opened up a new revenue stream that is giving Goodwill a financial boost while also employing people.
The organization had 312 employees before it closed under the state mandated stay-at-home order. Two hundred and fifty of those employees have been furloughed. The organization has an annual budget of $14 million, 80 percent of which comes from its 10 retail stores. An 11th store located in Paw Paw is closed and will not reopen when the lease expires in July.
In addition to the revenues generated, store sales also supply the vast majority of surplus funds for Goodwill’s mission, Dillworth said.
“Last year, the stores contributed $780,000 to our mission,” he said.
The remainder of the budget comes from contract work and grants and fees for mission services programming.
“Fortunately, we’ve had a very strong run of good years financially so when this rainy day hit, we know we have a surplus of funds to weather the storm, but it’s not inexhaustible at all,” Dillworth said. “If we’re in the same position in August, we’ll be in a heap of trouble.”
Plan for reopening
Once the state allows stores to reopen, Goodwill will implement social distancing guidelines and a one-way traffic pattern in its stores. Dillworth said the biggest difference for customers is that they will have to take items intended for donation out of their cars as opposed to having Goodwill team members do it.
Despite these precautions, Dillworth wonders whether customers will feel comfortable coming back into the stores to shop.
“They’ve had enough time at home that they’re shopping online more. We’re already looking at what we could do to triple our online sales,” he said. “The key in a changing environment is being open and flexible to new and different things.”
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