Why The Defense Production Act Is A Growth Catalyst For Manufacturers

The Defense Production Act (DPA) is a critical weapon in the fight against Covid-19. For nearly a year, it has been invoked to drive the delivery of COVID-19 testing kits and personal protection equipment (PPE). Now, it will also play a central role in accelerating the production of coronavirus vaccines with the National Strategy for the COVID-19 Response and Pandemic Preparedness released by President Joe Biden on January 21.

The DPA gives the President the authority to expedite and expand the supply of materials and services for the U.S. to promote the national defense. In the war against COVID-19, that means establishing a stable, secure and resilient supply chain with increased domestic manufacturing in four key critical sectors:

• Vaccine development and manufacturing
• Antigen and molecular-based testing
• PPE and durable medical equipment
• Therapeutics and key drugs

The high demand in these areas will spur growth for manufacturers already producing parts, products and packaging to support the federal government’s COVID-19 response. Additionally, it will open opportunities to more companies as the new administration invests in manufacturing capabilities and capacity to produce vials, syringes and other products required to package and administer coronavirus vaccines.

Whether expanding production under the Defense Production Act or joining the effort for the first time, companies can benefit from four key lessons learned from manufacturers who successfully pivoted to produce much-needed PPE and COVID-19 testing supplies in 2020—even as a majority of their employees worked from home to protect their health.

  1. Adapting to varying production demands is critical.
    The ability to flex and adapt to changing production styles is essential for responding to the rapid changes in demand driven by the pandemic. This is illustrated by the success of DELMIAworks’ customers, such as Augustine Technology, Core Technology Molding, Eldon James, Revere Plastics, and Vital Plastics. Each of these manufacturers pivoted from producing their main product lines to produce PPE at the start of the pandemic using insights from their ERP and manufacturing execution system (MES) software to evaluate demand, understand capacity, plan production, and manage their supply chains.
  2. A single source of data enables superior agility.
    With a full view of business, from the back office to the shop floor, manufacturers producing testing components and PPE have been able to establish a seamless information flow and digitally transform their production operations. The DELMIAworks 2020 platform delivers this comprehensive visibility by running all of its modules on top of a single database that offers immediate and consistent insights across the organization. Because no special integrations are required, manufacturers also have been able to get additional DELMIAworks modules up and running in 2020 to quickly expand operations for producing much needed medical supplies. Finally, support for 21 pre-built manufacturing types in DELMIAworks has facilitated the ability to get new production operations in place to support new market demands.
  1. Track and traceability streamline compliance.
    International Standards Organization (ISO) 13485 and 9001 standards, Current Good Manufacturing Practice (CGMP) regulations, and a range of Food and Drug Administration (FDA) rules are just a few of the many compliance requirements facing manufacturers in the medical product and pharmaceutical industries. Track and traceability are invaluable in maintaining this compliance—both for established manufacturers and newer entrants coming onboard under the Defense Production Act to produce COVID-19 testing kits, vaccine vials and syringes, and packaging.

Importantly, by automating the tracking of supplies and production, track manufacturers can also troubleshoot supplier quality problems before they become larger issues. As a result, many manufacturing firms have been able to avoid high, unpredictable expenses of a product recall. Additionally, the visibility across multiple manufacturing facilities enabled by track and traceability ensures that companies can maintain quality levels and meet production forecasts.

  1. Quality management helps drive profitability.
    Manufacturers in the medical products industry observe that having quality management system (QMS) functionality integrated with their ERP software enables them to comply with FDA 21 CFR Part 820 while finding new ways to increase profitability. Not only do QMS capabilities help minimize rework and drive down manufacturing costs; they also help manufacturers to compete on quality and maintain profit margins. By adopting an aggressive strategy of improving product quality, manufacturers in the medical product sector can recover from $6B to $11B a year according to a recent McKinsey & Company study, Capturing the Value of Good Quality in Medical Devices.

Over the last year, the nation’s manufacturing base has proven its ability to adapt and excel in meeting the needs of healthcare professionals with testing, PPE, ventilators and other products in our battle against COVID-19. And it’s been inspiring to see so many manufacturers transform themselves in days—shifting from one manufacturing style to another using our DELMIAworks ERP system—to contribute to this production.

Expanding the application of DPA is a great decision by President Biden because it unifies all manufacturers to the common goal of providing much-needed vaccines, supplies, and medical equipment. We look forward to helping manufacturers, whether they are building on their 2020 production or joining the effort for the first time, in expanding and optimizing their operations to these urgent demands.

2021 Manufacturing Trends

Louis Columbus

Louis is currently serving as DELMIAWorks Brand Senior Marketing Manager. Previous positions include Director Product Management at Ingram Cloud, Vice President Marketing at iBASEt, Plex Systems, Senior Analyst at AMR Research (now Gartner), marketing and business development at SaaS start-ups.