When the COVID-19 pandemic interrupted the supply chain in March 2020, Master Lock had many questions to answer: How can we continue to provide customers with the products they need? How do we do this in a way that protects our employees from the COVID-19 virus? How do we support our suppliers and allow them to continue to produce the components needed for our products?

Master Lock is the largest padlock brand in North America, producing thousands of stock-keeping units (SKU) for a variety of consumer, commercial and industrial end-user applications. Its customers include home furnishing centers, hardware stores, retailers, wholesale distributors and professional dealers.

The company's lock manufacturing business in the United States uses materials from domestic and international sources. When there was a shortage of materials in March 2020, Master Lock took swift and decisive action to continue manufacturing and delivering products to customers. 

Authorize a dedicated response team

Master Lock immediately launched a cross-functional COVID response team called the Project Management Office (PMO). Justin Matuszek, director of product management, was appointed to lead the work. The PMO has representatives from product management, purchasing, demand planning, manufacturing, sales, production planning, customer service, and finance.

The goal of the PMO team is to decide in real time how to prioritize the product and deliver it to Master Lock’s customers. However, to manufacture and deliver products in a global pandemic, the health and safety of employees must be the top priority, so the PMO team is also responsible for making real-time decisions to protect Master Lock employees from the COVID-19 virus.

The leaders of the PMO knew that for the newly formed response team to succeed, full-time staff across business units and administrative support were needed. Master Lock did not make employees work part-time for the PMO and assume their normal duties, thereby overloading them with work, but dedicated cross-functional resources to the team. This strategic decision maximizes everyone’s focus on PMO goals and eliminates any competing priorities that would hinder Master Lock’s ability to respond.

It is very important for the PMO to establish the correct operating rhythm. At the beginning of each day, the response team met to learn more about the supply chain activities in the past 24 hours and set goals for the next 24 hours. Create task lists, sometimes accurate to the hour, so that PMO team members can hold each other accountable. This structure provides the decision speed and agility necessary to make real-time supply chain decisions. Matuszek recalled: "There was no waiting for the executive summary meeting. We have the right to make a decision and, if necessary, we can hire an executive leader to ensure that we are consistent."

After setting goals for the cross-functional response team and setting the daily operating rhythm, the PMO can focus on protecting employees from the COVID-19 virus, protecting Master Lock’s customers, and supporting its suppliers.

The priority of PMO is to ensure that employees can continue to rely on a clean and safe working environment every day. Following the US Centers for Disease Control and Prevention (CDC) and local guidelines, Master Lock has implemented strict COVID-19 testing and tracking protocols. In facilities where employees work close to each other, employees must wear masks and face shields and maintain social distancing when possible. In offices, cubicles, cafeterias and other places where it is difficult to maintain social distance, clear barriers have also been installed to protect employees.

Communication also plays an important role in ensuring the safety and knowledge of employees. As market uncertainty increased, the leadership team realized the need to increase the frequency and transparency of communication. Employees need to know what decisions have been made to protect their health and safety and how to continue to serve customers. The leadership not only shared what is known in the supply chain, but also shared what is still unknown. This transparent communication allows employees to focus on the company's most critical goals, while also opening the door for issues or employees to express concerns.

The physical threat of COVID is not the only factor affecting employees. The leadership of Master Lock understands that some employees need additional support. The company launched a health plan for all employees in 2020. The program includes additional consultations, daily live fitness classes conducted by certified coaches, yoga classes, lectures by nutritionists and psychologists, and initial consultations with certified consultants to help employees set personalized mental health and well-being Target.

During periods of uncertain supply and demand, one of the main concerns is the possibility of panic buying. To help resolve customer concerns and protect supply, Master held a conference call with major customers during a lock-in period to review the company's supply chain recovery plan. Master Lock shares supply restrictions and recovery plans with these customers, and keeps them informed of plan changes based on evolving safety procedures.

The company relies heavily on engineering and product teams to identify alternative solutions for customers. In some cases, similar products are in stock (or the components that make it are in stock) and can be replaced to meet customer needs. In other cases, the product must be reworked at the manufacturing site of Master Lock to support customer requirements.

Finding alternative solutions for customers' orders has had a ripple effect in Master Lock's entire supply chain. Plans showing the required workload, funding, lead time, resources, and materials were quickly integrated. The team collaborates across functions to promote quick action, usually requiring customer input and cooperation. 

“We have obtained resources from all areas of the business, and if input from a particular discipline is needed, they will give up everything to get the answers they need and respond to the team,” Matuszek said. "We changed from'How can our supply chain team solve this problem' to'How can I help solve this problem?'"

Facts have proved that the daily rigor of PMO and the prioritization of customer-centric activities are the keys to Master Lock's ability to quickly respond to changing needs. This responsiveness is essential to ensure that customers can continue to rely on Master Lock as a business partner.

Master Lock also regularly meets with suppliers of key components in its products. These suppliers shared their knowledge of labor, raw materials and product availability, and Master Lock did the same. They also shared information about new government regulations, ways to protect employees from COVID-19, and changing business practices. As suppliers responded to the pandemic and began to increase production, the meeting transitioned from information sharing to Master Lock's collaboration with suppliers in daily production plans. This day-to-day communication is essential to ensure that the right products are produced to meet changing customer needs.

One of the options considered by the PMO is to vertically integrate the manufacturing of components that are in short supply. Master Lock’s analysis shows that vertical integration will not allow the company to respond quickly enough to supply chain disruptions. In order to adapt to changes in supply and demand as soon as possible, Master Lock turned to focus on improving the emergency response capabilities of suppliers and shortening the delivery time. To this end, the company works closely with its suppliers to conduct data-driven discussions around commodities, materials, labor, transportation, and other factors that affect product costs and service levels. 

In one example, Master Lock worked with a major supplier to increase production capacity by 25% in approximately eight weeks. Suppliers shared information about the rate of increase in capacity and whether the restrictions are related to labor and/or equipment. Master Lock and its suppliers have developed a plan to optimize investment in additional capacity. Some of these discussions were already in progress before the pandemic, but due to the urgent need to increase production capacity, the project was able to move forward quickly with the supplier.

Paving the way forward for 2021

In large part due to Master Lock’s experience during the pandemic, risk assessment and discussion are now part of the company’s "daily meeting", which is a cross-functional standing meeting designed to keep all employees updated on key business operations Situation, including safety, quality, cost, order, delivery, supply. Each functional team will provide the latest information on key performance indicators, obstacles and situations that may affect revenue or growth, so that employees and leaders can keep abreast of the pulse of the business.

Before the pandemic, Master Lock launched the "Next Generation Sourcing" program, but the pandemic environment provided additional guidance for sourcing strategies. Through this move, Master Lock continues to strengthen its supplier partnerships, and takes into account the surge capacity, evaluates manufacturing and purchasing decisions, and finds ways to reduce the delivery time of key products and components.

The company also continues to use the "80/20" approach to prioritize limited resources. Generally speaking, 20% of a company’s products create 80% of the value; therefore, the entire organization emphasizes the 80/20 principle in order to use limited resources to manufacture and deliver 20% of the products, these products drive 80% of the value . These principles prove particularly valuable when the company decides which components need to increase air freight and which components should be transported by standard sea freight. This approach ensures that key product inputs can be delivered in time to meet customer needs. 

In the face of the pandemic challenge, Master Lock was able to successfully adjust its supply chain. Today, the company continues to benefit from what has been learned in 2020, and many practices implemented during this period continue to help the business. With all the progress it has made, the supply chain team has always remained agile to meet the needs of customers—regardless of the environment.

Mark Kosfeld is the deputy director of the Institute of Supply Chain Management at the University of Wisconsin-Milwaukee.

Leah Westpfahl is the Global Supply Chain Director of Master Lock.

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