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Project V - Ventilator Heroes - Friendly Neighborhood Purchasing Team

Project V - Ventilator Heroes - Friendly Neighborhood Purchasing Team

June 5, 2020 | Posted by Jason Smith

#VentilatorHeroes. Because every role matters.

Project V, Day 4. It was abundantly clear that our first big problem to solve would be parts procurement for 141 test stations. The urgency of the schedule, plus the widespread disruption of the global supply chain, equaled enormous logistical challenges.

Ordinally, procurement is handled by a 3-person finance and manufacturing team. If you factored COVID-19 out of the equation, our team would have no trouble sourcing the components for an order like this. Under normal circumstances, estimated lead time of 6-8 weeks for specialized parts may be an acceptable piece of the project schedule. Under normal circumstances, we can afford to split up the ordering process over several weeks, starting with the longest-lead parts and working down the list from there.

Project V had none of this normalcy. Each of the 14 different types of test station requires an average of 86 unique components, ranging from 11 components for a relatively simple receiving station to 167 for the metering valve test station. The total came to almost 1,000 unique parts, due to a bit of overlap, plus some percentage of over 150 different common components and tools. What made procurement a challenge, though, was the timeline.

The initial conversations between Ventec, Velentium, and General Motors that became Project V kicked off at 7 am on Friday, March 20. Knowing the urgency of the project, we started generating BOMs for each test station and placing orders for hardware that same day: 3 days before we had a signed proposal in place, 11 days before we received a purchase order.

Early responses to our procurement efforts were not encouraging. With so many people unable to work from their offices and warehouses, lead times for the longest-lead components were being estimated at double or more what’s typical. We needed overnight or same-day shipping on every order, right when delivery times appeared to be least predictable (even Amazon’s fabled 2-day shipping for in-stock items was being estimated at 5-10 days). Anything that had to cross a national border on its way to our receiving facility risked being held up indefinitely. And without a purchase order in hand, some suppliers weren’t eager or easily able to open new accounts for us or raise an existing credit ceiling to permit our order size.

Yet we needed to source these 1,000 individual parts as quickly as possible. Some items had to be custom-manufactured and calibrated, and we needed others in volumes higher than were available at any single location. That meant tracking down inventory warehouse locations, talking to upper management in each supplier’s organization to get strings pulled, lining up a series of alternative suppliers, and coordinating with the mechanical engineers in charge of each test station as they clarified details, made design changes, identified and swapped alternative components in and out of the BOM based on procurement roadblocks or project needs. We simply couldn’t do it all with a team of 3.

“ How do you spin up reinforcements for our purchasing group from nothing, all working remotely, to buy things off of a list that isn’t finalized yet, on a timeline where delivery looks impossible, with limited credit capability, to help save the world? ”

On March 24, about half an hour till midnight, Dan Purvis started scouting for more hands.

With so many people across the country unable to do “business as usual” because of social distancing and stay-at-home orders, it seemed a fair bet that Dan knew people who had some extra time on their hands and would be willing to help out. And given the nature of the challenge, Dan knew he needed to recruit people who couldn’t accept “no,” or “I’m sorry, there’s nothing more I can do” from potential suppliers. That meant people who understood the challenge, knew the value of persistence, were creative problem-solvers, good with people, and were not intimidated by risk.

 

Dan’s first call that night was to his neighbor Steve Powell, an executive at a Houston-based company, to ask if he’d be willing to roll up his sleeves to help us buy things.

“Are you working from home or going into the office? When you are home, do you have any downtime? Can you help? Would you help?”

Steve signed on! Encouraged by this success, Dan kept reaching out whenever he could snatch a few seconds that night and throughout the following day. Then, out of the blue, another Houston-based exec, Lanny McCormack, sent Dan a text.

“Checking to see how you guys are holding up?”

Dan responded, “Wanna help? Mike Pence was talking about my project from the White House yesterday. I could use you on the phone. Ventilator manufacturing test.”

“Really??”

“Yeah.”

“Sure! Give me 20 minutes.”

 

Soon enough, Steve and Lanny had Dan’s corporate American Express card details and were working with Velentium CFO Paul Oliphant to buy things as fast as they can off of a shared-access spreadsheet that our manufacturing lead, Devin Carroll, nicknamed the Multi-BOM.

At its height, the Multi-BOM had two dozen tabs (one for each type of test system, plus dedicated tabs for other aspects of procurement and receiving ops) and was being actively worked on by as many as 50 people at any given time – receivers, engineers updating their purchasing needs, managers, and buyers.

Dan charged Paul to recruit “whoever he needed,” and so more calls went out for help. Within a week of Project V’s kickoff, Paul was leading a purchasing team of nine – Anjali Berger, Ananya Bhattacharya, Devin, Mike Deo, Jessica Joslin, Lanny, Denise Oliphant, Steve, and Jason Smith. Together, this team stayed in continuous contact with one another, the build teams whose systems they were buying for, and the teams receiving purchased items into official project inventories, by phone, Zoom, Slack, and collaborative cloud-hosted spreadsheets, from about 6:30 in the morning until 10 pm for almost two weeks straight. The Purchasing Team’s job was to figure out who had the parts our technicians needed, figure out who we needed to talk to in the supplier’s organization to get that part ordered and expedited, and make it happen while keeping the Multi-BOM accurate and up-to-date.

When the dust cleared, we found that the affectionately-dubbed Friendly Neighborhood Purchasing Team had sourced nearly $2.4 million worth of components – over 37,000 total parts of almost 1,000 unique part numbers. Per-item costs ranged from $0.01 to $2,759, while vendor invoices ranged from $79,028 at the highest to just $2.62 at the lowest. Components were sourced from places as near as <1 mile from our build site, to as far away as approximately 6,900 miles. Thanks in part to the White House’s Executive Order, as well as the dogged persistence of Paul and his team, we were able to dialogue directly with executives at dozens of suppliers to get accounts opened and orders expedited.

Procurement at Project V’s scale and timetable was impossible.

The Friendly Neighborhood Purchasing Team did it anyway.

So here’s to Paul, Anjali, Ananya, Devin, Mike, Jessica, Lanny, Denise, Steve, and Jason: #VentilatorHeroes

Topics: Culture
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