Uncertainty in business became the focal point of business meetings around the world in March 2020 thanks to the pandemic. But nothing could’ve prepared small to mid-size businesses for the onslaught of operational crises that they would face. For some, it was dealing with the lack of work. For others, it was dealing with stay-at-home orders. Yet for more, it was the crazy inadequate capacity to deal with production orders. And for all companies, big and small, it was the crisis of dealing with safety at work.
For most of us, the many little issues built upon themselves and challenged us. We had no choice but to learn to cope or close our doors. How have you fared through it all?
A decade from now, it will be fascinating to look at our stories and see how we emerged from our pandemic circumstances. For now, it is interesting to exchange ideas and observations. This is by no means a comprehensive report of how President Phillip Rossi brought Precision Electronic Glass through the first year of the COVID crisis. It is a snapshot in time. Perhaps, if the lessons warrant, we will work on something more comprehensive as time passes. But first, there is Rossi’s story.
A Dawning Realization that 2020 Projections Might Need Adjusting
“Covid has had a dramatic impact on everyone. But in the beginning, none of us really understood what was happening,” Rossi recalls. “My projections for the year were still on target at first. In 2019 business was very strong. We hoped to continue that in 2020.” However, once the flights from China and Europe begin to shut down, uncertainty in the business climate begins to grow.
PEG continues operations throughout the shutdown because the governor of New Jersey deems that manufacturing is an essential business. That is good news. Still, Rossi has some difficult business decisions to make in anticipation of the inevitable slowdown. Not an easy thing to do for a family-owned company started by his father, John, six decades earlier and operating all this time in the same community. Seriously, some of his employees are second-generation with PEG.
A Measure of History Using the 2008 Recession Yardstick
“This business is part of our family,” Rossi says. “I start thinking back to 2008 and the stock market crash. Initially business was very good for the first 2-3 months but then, as now, we didn’t know what to expect. As time passed, we saw company after company shut down in the service industry.”
Rossi uses this experience of 2008 as a compass for today, recalling how he and his father managed the company through those years of recovery. This guides and continues to provide some clarity after almost a year of the pandemic and dealing with COVID-19 among their friends and families.
Essential Status Helps PEG Manage the Uncertainty in Business
Many of PEG’s products are needed on the first line of defense. Glass components play an essential role for scanning and testing, research, and treatment including vaccine development, delivery, and ventilation products. This role in providing critical components needed for saving lives and also for vaccine production helps PEG continue to expand in areas of production.
But demand for other types of essential products drops off as a result of less demand for the medical components used in elective surgery and diagnostics. Unfortunately, even as areas of the country re-open, a growing slump in subsectors hits the glass technology industry.
Complicating things further, customers and suppliers in other parts of the country and globe remain shut down. Today major gaps in the customer base remain.
Are the Changes to Accommodate Pandemic Business Needs Sustainable?
There is uncertainty in business throughout the technical glass industry and in every other industry comprised of small to mid-size businesses. Businesses that are open and operating are making huge changes to accommodate safety and supply chain needs. They are reconfiguring processes, production lines, and workplaces. They are shopping hard to find new domestic suppliers that can be cost-competitive.
Producers are altering factories to accommodate domestic supply needs, often with huge capital outlays. The uncertainty in business in this case is whether or not domestic fulfillment will remain sustainable. For PEG, the saving grace is that no major changes are needed to accommodate the manufacturing of glass components for delivery to U.S.-based clients.
Another saving grace has been the government’s PPP assistance program. “We were very fortunate that we were open since a lot of businesses had just closed when it was made available. Thankfully it has given us some added security and helped make up for the gap in demand. Even so, we are working at a slower pace than in the past,” Rossi said.
Uncertainty in Business a Year Into the Pandemic
Much has changed for every industry operating in pandemic economics for the past year. Business owners must think on their feet, learn, and adjust as they go. Rossi has noted customers are performing far less research and development throughout the pandemic than any year prior in PEG’s history.
“We are used to our customers constantly developing new things,” he says, noting that the uncertainty in business is greatly hindering strategic planning. In fact, he knows some companies only do about 10% capacity compared to their normal production. That keeps him awake at night.
Of course, the election and subsequent political changes add a layer of change to the equation. Even though this is an expected part of the business picture, the pandemic adds immense complexity.
Virtual Tools Are Not a Substitute for On-Site Testing
True there are many business tools that connect Rossi and his engineers to remote global client teams, the PEG leader says, “Microsoft teams and software like it are a band-aid. Being out of the office was never an option for our team. We had to find a way to work that kept everyone safe.” Rossi’s frustration echoes that of business owners across industries. It rocks his world — and not in a good way. More like a major earthquake. Yes, the PEG team is among the fortunate but Rossi wonders, if they struggle as an essential business, how will his friends, colleagues, and customers survive?
“There are so many hurdles to overcome right now,” he notes.”Under normal circumstances, we ship around the world. Today, having a call with people is a lot more difficult, especially in other countries. People work from home and become distracted by family members because everyone is at home.
“Prototyping and testing meet entirely new challenges. Testing onsite is often impossible. Yes, we are managing but they are not moving with the speed and efficiency normally expected. At this rate, I see 2021 as an unremarkable year for businesses for the most part. Well-established businesses will survive, but most things will move slowly.”
Identifying and Adapting to Permanent and Long-Lasting Change
It is clear to Rossi that the pandemic is a marker for change. Some changes may be long-lasting, others are likely to be permanent. “While it is very hard to predict what changes we will see, it is pretty safe to say that there will be consolidations across all industries,” Rossi said, “In fact, we are already seeing healthier companies acquiring smaller competitors and startups.”
In general, business strategies getting the most attention across all industries include domestic fulfillment of supply chain requirements, increased demand in re-skilling and trade school certifications, custom components, and a focus on build-to-order, additive manufacturing, and short-runs. Fortunately, PEG has been working in these areas, re-engineering and substituting sustainable glass components for more than six decades. All of these areas are familiar territory for PEG.
“As the leader of this company, it is important to let my customers know that our years in business serve us well. I have my father to thank and our shared foresight and planning. It is not a bragging point, believe me. I would do anything I could to change where we all are right now. But I do want those who do business with us to know we are in a good place. We are well-marketed and have a good reputation,” Rossi said.
Helping Others Adapt to Domestic Suppliers
“The past 10 years and our ongoing evolution have really prepared us,” Rossi says. “We are financially sound. Our processes and business are proven. If we weren’t, this would be a very difficult time. Unfortunately, there are so many businesses with good ideas, but they are living marginally. In all this chaos, it is a shame that few will notice the many promising new businesses that disappear.”
One area where PEG has been successful in assisting businesses has been in the domestic fulfillment of components. For many companies that were fulfilling components overseas, there was a major disruption in the supply chain after March 2020. As the pandemic surged and needs in research, medical, and diagnostics picked up in the fall, PEG fulfilled glass components for companies needing help with x-rays, ventilation, and vaccine development.
Always evolving and ever-ready to step up to the plate, PEG is also well-prepared to meet the needs of new industries. The PEG engineering team has frequently stepped up for companies searching for suppliers, even helping them to determine whether glass works as an optional material for their components.
Despite Uncertainty in Business, What Makes It All Worthwhile
Rossi reflects on trying times in the business. A time in the 1990s stands out. At that time, he worked with his father and two brothers on securing their largest account to date at that time. “It was easy, fun, and we were all working hard together to pull it off,” Rossi says it was a lot like working with his team this year. “It was amazing to see my team work together to adapt to all of the changing COVID regulations and the changes in customer demands. They have made our survival possible,” Rossi says.
“You know, every year at the end of the year when we make money, I feel pretty good about the job we have done as a team. That is because I love my staff. This is like a second family for many of us,” Rossi says. “Together, we pull off amazing things — often things that seem impossible before we put our minds and talents to work on a solution. Did we make a difference? Yes, we did. And when I can say that at the end of each year, it is the most satisfying thing.
“In the end, our customers love dealing with us because we are responsive to their needs, and we are quick. They tell me the good thing is that you are direct, give us the facts, and you are easy to do business with. I know if my Dad was still with us today, he would be proud of what we have done with his legacy.”