Borderless Live in conversation with Clark Harrison, Chief Operating Officer, Zobele Group
Led by Clark, Zobele’s seven industrial sites worldwide responded to the Covid-19 crisis by implementing revised operating practices that created a more secure environment for the physical health and emotional well-being of more than 6,000 employees.
Q: Please tell us about your professional background Clark?
A: I am an American and at the same time a truly global person. I have lived and worked full-time in six countries: USA, Canada, Germany, Belgium, UK and Italy and I am currently living on Lake Como in Italy, near to the Milan Malpensa International Airport.
I am a Mechanical Engineer with a specialized Manufacturing MBA by education and a 32 year operations veteran, the last 11 years of which have been as VP Operations or Chief Operating Officer. I have worked for 17 years in Automotive supply at Rockwell Automotive, TRW, Tokai Rika and American Axle and 10 years in Medical devices at Danaher Corporation acquisitions KaVo Dental and Leica Biosystems in Germany, as well as at startup companies Biocartis in Belgium and Lombard Medical in the UK.
For the last five years I have been in Consumer Products at Zobele. The main focus of my career has been operations and supply chain excellence, with a specialty in Lean Manufacturing. I learned lean on-the-job with hands-on training from top leaders who developed the original Toyota Production System working for Taiichi Ohno. I combined this methodology with what I learned from the Danaher Business System
Q: Can you tell us a bit about Zobele Group?
Zobele is a 101 year-old company, and we are the largest global contract developer and manufacturer for Fast Moving Consumer Goods in the segments of air care, pesticide, laundry & fabric care, and other personal care devices.
For confidentiality reasons, we don’t name our customers or their brands, but they are all household names in their respective markets. We produce nearly 1 billion individual products per year, and had 2019 revenues over €400 million – so our average sale prices and margins are quite low, which makes the pressure to perform and control costs extremely high.
We have two innovation centers and seven manufacturing facilities worldwide and have been led for most of our existence by three generations of the Zobele family, who later sold a majority interest in 2006 to the private equity firm, DH Private Equity Partners. In April this year, the industrial company KDC/One closed the acquisition of all the company from DH and the Zobele family. We are now a division of a combined company with revenues around EUR 2 billion per year.
Q: Where are your plants located?
A: We have seven factories around the world, each producing mainly for their local markets:
Q: How have you fared during the Covid-19 crisis so far?
A: Our products are primarily sold through groceries and supermarkets, and therefore our customer supply chains have been open and operating the whole time, so we have needed to keep our plants and suppliers operating as well. All of the countries where we operate designated most or all of our products as essential, allowing us and our suppliers to operate – under the conditions imposed locally.
Q: What has been your company strategy to deal with the Covid-19 situation?
A: We decided early on, that we will treat this virus as a highly contagious “escaped pandemic” that could no longer be stopped but must now run its course until enough immunity is developed through vaccinations and recovered patients to stop the spread – unlike the previous SARS and MERS outbreaks which were contained. We plan for the crisis to continue for about 2 years until enough immunity is developed around the world to end the spread, probably coming in multiple waves where regions tighten and relax social distancing rules, until enough immunity is built through patient recovery and vaccinations.
We decided not to treat this as a short-term (ie, few week) shutdown after which everything would be “normal” again. We developed policies that for our company are the “new normal” for the foreseeable future. Looking back, the 1918-1920 Spanish Flu lasted for 2 years and came in multiple waves – we are assuming the same now.
Q: What has been the impact of your strategy on your business?
A: Viewing this as long term led us to make certain decisions.
Most of our people are located in “low wage” countries, without big social safety nets, and they need money to feed themselves and their families – really for survival. Even in the richer countries, Governments cannot close their economies and give financial support to their populations for such a long time period with reduced tax revenues.
And even companies with higher sales and margins than ours are also not able to continue paying salaries without sales income, or they run out of cash quite quickly and go bankrupt. To protect the lives of our workers and their families, we have to remain open.
Therefore, we needed ways to protect both the “lives AND livelihoods” of our nearly 6,000 people worldwide, not just survive a few weeks of downtime. Most of our workers need their salaries for food and basic necessities, not for luxury goods. We owe it to them all to stay open and keep them safe at the same time.
We developed the principle “safer at work than at home” to guide us. We also recognized that there were varying levels of panic about the new Coronavirus around the world (we could probably do another webinar on the culturally different reactions to the virus – between Brazilians and Bulgarians as an example). We had to both implement physical safety measures, but we had to help our people mentally feel safe as well – one without the other was not enough.
Q: So, have you been able to keep operating?
A: Yes, five of the seven plants have remained open throughout, and two reopened after a few weeks of shutdown. China was initially shutdown following the Chinese New Year holiday, along with the rest of the country. But our plant was one of the first 14 factories given permission to reopen in our area near Shenzhen, and we re-started on Sunday 16Feb.
India was shutdown suddenly on 23 March, and we were again one of the first companies given approval to restart on 7 April, although with only certain product lines deemed essential in India. On 1 May, we were allowed to restart all product lines again.
Q: How did the restarts go?
A: Restarting is harder than continuing, although the leadership teams can “focus” solely on the safety improvements during the downtime.
In China, the government shutdown was announced during the Chinese New Year holiday period, when we were already closed. Like many companies in China, our workforce is mainly comprised of workers from other parts of China who come and live in our dormitories, and they were all back in their hometowns for the New Year’s holiday. We had a couple of weeks to run through the various scenarios and come up with our policies even before the people returned, so we were fully prepared to execute our plans once given permission from the government.
We ramped up in a very strict way to full production over six weeks as our workers were able to return and were released from our process. We put returnees on the same day in the same set of dormitory rooms – we did not mix returnees from one day with those from another day to be able to strictly count the days since return and be able to release a room at a time from the strict isolation that we imposed. We did this for all returnees, not just those from Wuhan the surrounding Hubei Province – we treated everyone the same.
We either kept them quarantined for 14 days before allowing them into the factory, or for 7 days plus a -negative Covid-19 test – this was more than required, and more than other local companies. We also worked with a local hospital to arrange testing at our premises for groups of people several times per week. Had any of the workers shown symptoms, we also took them directly to the hospital for testing.
Fortunately for us, nobody tested positive. But if they had, we had arrangements with the local hospital for treatment. If the case was not severe and home quarantine was recommended, we had set aside one isolated dormitory as a strict quarantine zone. We had all the Personal Protective Equipment necessary to protect any sick people and the people who would care for and bring food. We also had the equipment for monitoring symptoms (touchless thermometers) and written rules for when to take someone to the hospital if these symptoms worsened.
During the quarantine period, we brought meals to the workers, and tried to take care of them as best as we could. After about 6 weeks, we again had our full complement of over 2,000 workers “free and clear” from quarantine and working in their normal jobs.
During that period, our HR team and many others really worked above and beyond their normal jobs! By the end of April, we had essentially cleared all past-due order backlog and were working per the current demand again.
In India, the nationwide shutdown was announced with no advance warning, leading to a rapid, unplanned shutdown. Once the process for being declared “essential industry” was clear, we immediately applied for and were granted the designation for our insecticide product lines.
We adapted the policies developed first in China to the specifics of the Indian situation. Unlike China, our workers come from the surrounding areas and we don’t have company dormitories. This meant we didn’t need dormitory control policies, but we did need transportation control policies.
However, our plant is located at the border of three provinces, and the -province where we are located allowed us to open, but kept the borders with the neighboring provinces closed. Our province has no confirmed cases of Covid-19, but the two neighboring provinces are both heavily impacted. To reopen, we started with our existing workers from within our province, but to ramp-up we also had to recruit new workers only from within our province.
In both plants, we had to have controls in place to protect new applicants and our recruiting personnel during the hiring and screening processes. We also had to work closely with our Sales team to have only one priority list for what to produce each day when headcount and capacity were limited. We also needed the Sales team to “be the single voice” and help prevent each customer from calling the plants for updates multiple times per day! We were inspected by one or more government authorities before being given permission to reopen, meaning we had to have all the new protections in place before restarting.
Q: How have your workers fared during the shutdown periods, or during travel restrictions where they could not return to work?
A: We have used social networking sites to remain in contact with our people, for example WeChat in China was the primary communication link. We could communicate the company’s plans, and also find out if everyone was healthy and safe. We could also provide written authorization for people to travel back to our business, as that was required by many local communities before letting people leave their homes.
This two-way communication has been essential throughout the process. We have also paid salaries to our workers during these times to not put them in additional hardship.
Q: We’ve talked about China and India, what about the other plants?
A: Starting with the China policies we developed first, we created a single corporate policy that we rolled out to the other plants. Since the other plants did not close, they had to both operate and implement the changes simultaneously. Fortunately, they had the China model to copy from and did not have to create everything from scratch.
In some other countries, even if the business is open, certain people are declared as high risk and told to stay home. For example, in Mexico people over 60 and with conditions such as hypertension are required to stay home. It is really critical to constantly check each local, state or province and national rules, as they change frequently. Some people have also chosen to remain at home, even if allowed to work. Nearly all have returned after seeing all the protections we put in place for them.
Q: So, what specifically have you done for protections, can you give some examples?
A: We broke down the protections into different categories: At work working, at work on break, getting in and out of the building, during transport to and from work, and at home or dormitory.
At work working, we require everyone to wear face masks at all times in all areas. In production, teams of engineers remade the production lines with additional space between the workers. For example, in Mexico the regulation requires 1.5 meters of distance between workers. In India it was 1 meter originally, and was increased to 2 meters. Our engineers went line by line and increased the length, redefined the work balance, and in some cases, slowed down the lines to operate with less people, but safely. In places where we physically could not increase the space between people, we also installed clear plastic barriers between people or implemented wearable clear plastic face-shields in addition to the surgical masks that everyone wears.
In offices, we evaluated every job and “assigned” some people to home working either full time or on a rotating basis. We then redistributed the people who had to be onsite using the empty desks and offices to create space between the office staff. Most recently, we installed clear plastic barriers between closely spaced desks and “pods”.
At work on break, we staggered the break times so few people were on break at any single time.
We switched from serve-yourself with common serving spoons, to being served by a single person wearing protective equipment. We switched from reusable plates to disposable packs. We asked office people to go back and eat at their desks in some locations. We removed chairs and installed barriers between seats and tables in the cafeterias. We added additional, frequent cleaning processes to the cafeteria and break areas between each group. Our leaders oversee the break areas to ensure that nobody is congregating together and that the cleaning is being done.
Entering and Exiting the building, we installed no-touch hand sanitizers at all entrances and exits. We assigned shift leaders to watch and enforce social distancing rules on people entering and exiting. We staggered shift start and end times to not have everyone moving in and out at one time. We opened additional doors to spread the people out – we have over 500 people per shift in Mexico for example, who were going in and out by one large doorway. We painted or taped lines on the floor indicating where people should stand and how far apart to help the flow during entry and exit.
During transportation, where we have company paid buses, we rented additional buses to create more space per person on the bus, and/or we staggered shift start and end times to use the same bus more than once per shift. We taped “X’s” on the seats to show where people should and should not sit to maximize spacing. We clean the buses between each trip. We provided masks and/or gloves to use during the trips.
Where people used public busses, we started renting company busses instead, and follow the rules above. Where people drive themselves. We offered additional money to people to use their own car and not carpool or use company busses. We created additional parking as needed for this.
And at home, we made and distributed “safe at home kits” to all of our people. Those kits contain hand sanitizer, masks, gloves, and written best practices for safety: frequent hand washing, not touching face, wearing masks in public, etc.
Q: You used the word “assigned” in relation to home working, what do you mean by that?
A: Those of us who have done home working for many weeks now realize that this is not a “benefit” as many people thought at first. Working from home can be challenging, distracting, all-consuming, and lonely. So we “assigned” rather than “offered” home working to people based on their job function, or personal risk factors – if those were disclosed to us.
The point of home working was to protect the majority of our people who had to be at the factory from any more contact than absolutely necessary. This also protected the person at home, but we have seen that the risk of infection for our people is greatest outside work, as they may not have all the same safety equipment we have at work. That is a big reason why we made the safe at home kits as well.
Q: With hindsight is there anything that you would have done differently?
A: Hindsight is not helpful in this context, but we have learnt that the important thing to do is to be flexible and make changes as you go, learning and adapting the process from each experience and from plant to plant
Q: Personally, how have you been affected – you mentioned having to reinvent yourself?
A: I have always believed that being on the shop floor and seeing how things happen in real time is the best way for any leader to understand what is really going on. I have tended to be on the road for more than 20 days each month. Clearly, that has not been possible these recent weeks. So all of us have learned to adapt and use video. Regular calls with people on the ground and with the executive team have worked well and this is clearly a new skill for many, but one which I foresee will be indispensable for all leaders in the future.