In March 2020, shortly after the World Health Organization declared COVID-19 a pandemic, the New York Times ran a story under the headline: “There aren’t enough ventilators to cope with the coronavirus.”
It explained that the number of ventilators in the world at the time could not meet the rising demand of patients seriously afflicted with the disease. There appeared to be no solution. The complexity of the devices, whose supply chains comprise hundreds of specialized manufacturers scattered across the globe, made production surges seemingly impossible. “Italy wanted to order 4,000,” a European manufacturer told the paper, “but there’s not a chance.”
Meanwhile, thousands of miles away, an effort was underway that would unite a group of optimists and problem solvers from Vyaire Medical, Spirit AeroSystems, McKinsey, and an array of Vyaire’s suppliers. Together, they embarked on an ambitious quest to dramatically increase ventilator production, thereby giving medical professionals a chance to better care for critically ill patients.
Before it was all said and done, the venture would put thousands of furloughed people back to work, stand up a new ventilator-manufacturing facility, and bolster links in far-flung supply chains on the way to hitting a production rate that would deliver nearly a years’ worth of ventilators every three days.
“At Vyaire, we take pride in accepting and facing challenges that others might shy away from,” says Vyaire CEO Gaurav Agarwal. “In this case, we achieved something others might not dare to imagine.”
Beyond business as usual
The history of mechanical ventilation goes back hundreds of years, but it wasn’t until the polio epidemics of the early 20th century that the devices were widely used. Among the most well-known was the Drinker respirator, or “iron lung,” which looked like a mini submarine and was powered by vacuum-cleaner motors.
They’ve come a long way since then. Today, these devices are the size of a large briefcase and utilize multiple circuit boards, complex software, and hundreds of components to control things like air pressure, flow rate, oxygen level, humidity, and temperature. Their engineering has more in common with aerospace systems than with household appliances.
Ventilators are much scarcer than either of those things, however, and the outbreak of COVID-19 introduced a vast and widening gulf between supply and demand. In April of 2020, for instance, a McKinsey team looking at global medical supplies estimated that there were about 23 ventilators per 100,000 people in North America, the region with the most plentiful supply. “In Africa,” says Miyu Toyoshima Galliart, a McKinsey associate partner, “the region with the lowest supply according to the analysis, the estimate was fewer than one [ventilator] per 100,000 people.”
“To call this extraordinary-demand scenario ‘unprecedented’ would be a gross understatement,” says McKinsey partner Ron Ritter, who helped lead the effort. “Nothing about ventilators—their supply chains, manufacturing, logistics, service, or support—was ever designed for anything like what happened with COVID-19.”
Typical ventilator production lines make five to seven units a day. Vyaire’s production team suddenly faced a demand projection of 35,000 units needed immediately.
Of course, Vyaire’s operations were built for typical demand—not the increased needs of a pandemic. Its usual ventilator production lines make five to seven units a day, which is a lot considering the complexity, quality-control requirements, and capital-asset value. (By comparison, the highest-demand commercial aircraft in modern history never once exceeded a production rate of 60 per month. While different in many ways, both are highly engineered capital assets.)
In April of 2020, Vyaire’s main ventilator product line suddenly faced a demand projection of 35,000 units needed immediately. Making that number would require a ramp in production toward 700 units a day in a matter of weeks. “Our executive team heard the concern in the voices of colleagues in the field, who were speaking with clinicians and providers across the world,” says Tammy Noll, senior vice president and general manager of Vyaire’s ventilation franchise. “We knew immediately no amount of business-as-usual was going to work.”
So, the company got to work on business-as-unusual.
The first step was to maximize output at Vyaire’s Palm Springs, California plant. Joined by industrial engineers from a major auto manufacturer in North America, Vyaire and McKinsey teams worked to revalidate basic manufacturing numbers, dial-in labor, and machinery capacity. Stopwatches and toolboxes in hand, these experts did everything they could—timed process cycles, analyzed bottlenecks, reviewed floor layouts, tweaked machines, and more—to get the most out of the capacity they had at hand.
“We started with a spreadsheet,” says Bhavuk Tandon, a McKinsey associate and member of the team walking the factory floor, “and we were conducting time studies on the floor, going through every cell, understanding all the lines and how they worked. We needed that information to help us understand what we had to do to build a facility that [would] give 30 times and more—fast.”
Without constant industrial discipline and performance pressure, a ‘hidden factory’ of latent capacity normally waits in everyday operations.
The practice, Ron says, can be an effective first step during critical shortages. “Without constant industrial discipline and performance pressure, a ‘hidden factory’ of latent capacity normally waits in everyday operations,” he explains. “Finding it normally produces a 20 to 30 percent boost in output right away.”
Once the analysis was complete, Vyaire added shifts to the reoptimized line. The moves helped increase production by about threefold. It was a huge leap by industry standards, but well short of what it would take to begin meeting demand. To get there, the company would need to make an even bigger move—to the American heartland.
A new workforce, a new building
With its Palm Springs plant running as hard as it could—yet still falling behind demand—Vyaire leaders began working hard to find more workers. “This was about finding an entire second workforce,” says David Marchand, now a McKinsey alum, who helped lead the project. “In a single product line, we needed an estimated 800 people: front-line operators, supervisors, process engineers, maintenance techs, security guards, department leads, site executives, warehouse staff, shipping departments, buyers—and they needed to know how to perform extremely well together, right away.”
When needed immediately, a workforce like that can’t be hired incrementally. The only way to acquire one was to locate an intact team—which came from Spirit AeroSystems.
The aerospace and medical-device industries may seem like strange bedfellows, but Spirit was the right partner for several reasons. Operationally, their people know industrialization, have high production standards, and operate complex supply chains. And in this case, given COVID-19’s impact on air travel, the company had people who were furloughed and more than ready to get back to work.
We embraced the opportunity to do something so relevant for the community and the world. This was clearly an international-security-level situation.
But beyond that, it was Spirit’s culture that made them the perfect fit. According to Spirit AeroSystems CEO Tom Gentile, “Spirit cultivates a ‘can be done,’ mission-oriented culture that has been built on accepting challenges.” This challenge tapped the company’s core values of transparency, collaboration, and inspiration, and it inspired the combined workforce of over 1000 employees. “We embraced the opportunity to do something so relevant for the community and the world,” says Tom. “This was clearly an international-security-level situation.”
To get the most out of this workforce, Vyaire looked beyond California in search of more production capacity. They found it 1,200 miles away in Wichita, Kansas, where Vyaire decided to open an additional ventilator plant. That may be easy to imagine, but it was hard to execute. Beyond a suitable 55,000 square-foot building, it took machinery, inbound logistics, outbound freight, quality control, assembly, testing facilities, and much more.
Capacities for each manufacturing-process step had to be calculated. Several miles of copper, medical-grade oxygen gas-flow lines, electrical drops, and industrial-grade air compressors had to be installed. Data connectivity to handle huge test-protocol transactions with cloud-based legacy software needed to be set. Workstations, production tooling, and a range of fixtures had to be built or sourced and calibrated. Even basics like car parking for 200-person shifts, break rooms, badging, security, and fire-control had to be installed.
Most critically, Vyaire and Spirit had to design and build workforce COVID-19 safety, including social-distancing fixtures, temperature screening, reporting, and testing protocols. “We were hyper focused on providing a safe environment for every single person who was about to work in that building,” says Noll. “We also knew the risk of outbreak in this facility carried added weight. Not only were we concerned about their health and that of their families, but we were also cognizant that the consequences of illness there would be felt by patients in need of these devices across the globe.”
Vyaire and Spirit were now ready to chase a benchmark that, months prior, would’ve only existed in a company’s wildest dreams. All they needed now were enough parts to make it a reality.
Supply-chain operations make and deliver tangible aspects of our lives and create the fundamental material pathways in a functioning society. Unappreciated in normal times, they rush to the forefront in times of crisis, such as the great wars and most recently, COVID-19.
Ventilators depend on outsourced materials. During COVID-19, these suppliers were just as pressed as Vyaire.
Ventilators depend on outsourced materials. Much of their supply-chain expense sits among fasteners, precision-machined valves, resin-molded components, electronic circuits, batteries, and more. During COVID-19, the plants that manufacture these components were just as pressed as Vyaire.
Versions of the same efficiency processes happening in Palm Springs and Wichita unfolded in hundreds of operations across the ventilator supply chain. The effectiveness of these moves was critical to boosting output, but they were harder for Vyaire to control. The suppliers medical-device manufacturers use were scattered globally. During the COVID-19 outbreak, they were often hit by competing demands. For example, an electronics manufacturer that makes medical-device circuit boards could see a wave of demand for virtual-work devices.
Suppliers did their best to respond. Many found ways to ramp-up quickly and help get Vyaire and Spirit what they needed. Others lost adjacent demand and had capacity to spare. But in some cases, suppliers lost capacity or had exceedingly long lead times. The most critical of these situations—the ones whose projected output would limit the team’s target rate—were placed on a “red list.” Early on, the red list was long. “It was apparent that dozens of material sources might hold us back,” says Jenna Stauffer, a McKinsey engagement manager who worked on supply chains in the effort.
Clearing the red list would require advanced intervention. A group comprising Vyaire’s most experienced buyers and manufacturing experts worked directly with suppliers to get specific information on process flows, bottleneck constraints, shipping delays, and the company’s own component constraints.
In most cases, these interventions worked. But in extreme cases, teams cleared to travel during COVID-19 lockdown conditions worked directly with vendors on site. In one example, a European producer of pressure transducers emerged as a key constraint. Teams traveled to the plant, mapped the entire process flow, and installed IoT sensors on a key rate-determining step in a single day. The work provided live, digital tracking of actual production against the max potential rate, and it helped the site raise its output within 48 hours.
The red list work was among the most relentless of the entire effort. It went on around the clock daily, as time zones rolled through the global night, demanding nonstop problem solving for months.
The impossible made possible—by people
If machines and technology were this effort’s arms and legs, people—many of whom have never met in person to this day—were its head and heart. They were united through a relentless drive to help, a product of the cultures at both Vyaire and Spirit, and they had the skills necessary to do so.
“Vyaire and Spirit were so driven and daring,” says Catherine-Sophie Haigh, a McKinsey operations specialist who worked on the project. “Together, everyone realized this was a once-in-a-career opportunity, and they trusted the teammate by their side—in many cases by their ‘virtual’ side.”
Vyaire and Spirit were so driven and daring. Together, everyone realized this was a once-in-a-career opportunity.
This was especially evident around one of the initiative’s most critical moments. When it became clear that the Palm Springs plant would never have the capacity to hit rising target rates, and splitting focus between it and the Wichita plant was sapping energy, leaders decided to execute what became known as “lift and shift” to consolidate the entire operation under a single roof. This meant shutting down the key ventilator production lines in the California plant over a weekend, crating all production equipment, and moving it as quickly and safely as possible to Kansas.
Given the stakes, the risk of losing equipment in transit, having it not restart, or suffering irreparable damage was frightening. “I’d done something like this on a smaller scale before,” says McKinsey partner Jonathan Tilley, who helped lead the effort. “It’s not plug and play. I was nervous, and we all knew what a loss in output meant for people who needed ventilators.”
During removal, teams would video-record and catalogue every screw, bolt, and connector to help the receiving teams put it all back together. The transit process was scrutinized for weather conditions and other variables. The team even consulted a satellite manufacturer to learn about preventing vibration damage en route to the new facility. “This entire move was conceived, decided, and completed in less than ten days,” Jonathan adds. “By working together, we all pulled it off.”
The “lift and shift” success turned out to be one proof point in a massive success story. As the project progressed into the fall of 2020, Vyaire’s global delivery of ventilators crossed 35,000, with peak rates of more than 600 per day sustained on one product line, with more than 1,000 across all.
“I still remember when the call came across to join this effort,” says McKinsey senior expert and associate partner Phil Duncan, who helped lead the work. “It was one of those moments in your career when you know you’ve just got to do it. It was a little nerve-wracking at points. It was emotional and meaningful. We all have a ton of pride in this because we did the work together.”
At peak, Vyaire was producing more ventilators in three days than their entire 2019 output. Over 19,000 units were built in the Kansas factory in just over 12 weeks by Spirit’s workforce. Similar feats were accomplished at other plants around the world, including among thousands of component suppliers.
“We all worked together to create a state-of-the-art ventilator-production operation, supply chain, logistics, and workforce in less than six weeks that sent critical devices to patients in need around the world,” says Spirit’s CEO Tom Gentile. “I could not be prouder of what we all have done.”
Vyaire CEO Gaurav Agarwal agrees. “Yes, it was bold, and daunting at times, but there was never a chance we weren’t going to stand up to this moment,” he says. “Patients and customers were counting on us and our collective teams to meet the challenge.”
This particular moment may have passed, and critical-care ventilator demand has since eased, but according to McKinsey’s Ron Ritter, the campaign nevertheless stands as an epic industrial success: “It also says a lot about what organizations can do when they have the courage to face what feels like an impossible objective, and inspire their people to do the same.”
To learn more about how McKinsey helps organizations improve manufacturing, please visit our Operations website, where you can also gain insight into CEO leadership of operations, supply-chain resilience, and much more.