ST. PETERSBURG — Jabil makes everything from iPhone components to Internet-connected kitchen appliances and GoPro cameras, but until January, it never thought much about needing huge quantities of hand sanitizer at its factories.
Then the new coronavirus broke out in China, where Jabil has more than 100,000 of its 225,000 employees. They include about 500 workers at its technical facility in Wuhan, the city of 11 million that was ground zero for the COVID-19 pandemic. Suddenly hand sanitizer, even for facilities that are near-sterile environments to begin with, became a big thing.
Within days, Jabil’s factory in Chengdu, China, about 700 miles from Wuhan, was making hand sanitizer for all of the company’s 50-plus factories from a formula that Jabil developed and then shared with customers, communities and competitors.
In St. Petersburg, where the company has its headquarters, it sourced the ingredients to 3 Daughters Brewing so that it could make hand sanitizer for local paramedics and emergency responders.
And that was just the start of how Jabil adjusted to a shifting set of priorities.
“When you go through something like this, you kind of re-sort the deck,” Jabil chief executive officer Mark Mondello said in an interview this week with the Tampa Bay Times. “Us helping where we can help is just a natural extension of our value set.”
First and foremost, he said, is the safety of employees. Everyone entering a Jabil facility gets a health and temperature screening. Inside, there are more hand-washing stations, plexiglass barriers and practices to keep workers at a safe distance from each other. Jabil likewise restricted travel early on, let high-risk employees work from home or have paid furloughs and established comprehensive quarantine and tracing protocols for suspected cases.
Mondello declined to discuss the numbers, which he said could quickly be out of date, but said Jabil has had a minor number of diagnosed cases, relative to the size of the company, and no deaths. Of those diagnosed, about half work in factories and about half in offices. None contracted the virus inside a Jabil workplace, according to the company.
Still, the virus hit Jabil’s operations early and directly, disrupting its factories and supply chains, costing it tens of millions of dollars and re-organizing its priorities. In addition to taking steps to protect its workers, Jabil’s response has included retooling production to make masks, gloves, face shields, ventilators and diagnostic products, including coronavirus test kits.
The company now is on track to make 10 million masks a month for its employees, and, eventually, to be donated to communities where it works. It’s similarly working with a customer that supplies hospitals on plans to produce more than 5,000 face shields a week.
This is not new territory for Jabil, whose health care division is the industry’s largest provider of design, manufacturing and other services for medical devices, orthopedics, diagnostics, pharmaceutical delivery and consumer health products.
Jabil has 36 health care plants with 5.5 million square feet of medical manufacturing in 12 countries. Now is the time to bring those capabilities to bear without thinking about boundaries or limits, executive vice president Kenny Wilson said.
“In a time of crisis like this, you stress your processes,” he said in a statement, “and you find out just how good you are.”
When a Jabil customer wanted to design an N95 mask that could be sterilized and reused, it forwarded a design to Jabil, which 3D-printed a prototype within 24 hours. Two days and several versions later, Jabil provided a finished mask to medical professionals in Massachusetts, who tried it and asked for more. Now Jabil plans to make 30,000 to 50,000 reusable N95 masks a day for both health care providers and its own employees.
Jabil’s ventilator-related manufacturing includes:
• Working with the Philips health care technology company to ramp up production of its Respironics V60 ventilators.
• Increasing its production of printed circuit board assemblies used in ventilators.
• Leaning on its supply chain relationships to meet customers’ needs.
• Helping customers rapidly prototype new designs for ventilators and component parts. For example, Jabil’s 3-D engineering manufacturing team has made splitters that allow one ventilator to provide air to two or more patients at a time. It’s dedicated five 3-D printing operations to the device, putting it on pace to print 64,000 splitters in the next three weeks.
Jabil also is producing test kits, making cartridges that go into analyzers to test for the coronavirus and building large diagnostic machines that can process thousands of blood tests to look for antibodies that show whether patients have developed an immunity.
And it’s doing each with a goal of “getting these products to market on an accelerated timeline," according to executive vice president Steve Borges.
Nearly 90 percent of Jabil’s sites are running and meeting the demands of its 420 customers.
Last month, Jabil, the No. 140 company on the Fortune 500, told investors that responding to the pandemic had cost it about $53 million through the end of February. That was a tiny fraction of its $6.1 billion in net revenues for the same quarter. Mondello said this week he had no update on that number.
“Do I think there will be additional costs to the company? I do,” he said. “What magnitude? I just wouldn’t want to speculate. I will say this: Things will be tight for us, as they will all companies. If things don’t get markedly worse from here, even if this elongates a bit, our balance sheet’s in relatively good shape. So, if we’re smart about it, I think the company comes out of the back end of this in okay shape."
As a publicly traded company, he said, Jabil constantly thinks about shareholders — and indeed, the board of directors this month approved paying dividends for the latest quarter.
At the moment, however, employee safety, responding to customers’ quickly changing needs and delivering medical supplies to “front-line workers fighting the good fight on the virus” have all taken on overarching degrees of importance, Mondello said.
“In a case like this, that priority for us, over the mid to long term, ends up serving our shareholders well,” he said.
For Mondello, who rose from a first Jabil job as a manufacturing supervisor to become the company’s CEO in 2013, the pandemic means being on the phone virtually nonstop from 5 a.m. until late into the night seven days a week. But he said that’s not different from the work being done by the rest of the Jabil’s workforce, which continues to run a $26 billion enterprise while adjusting on the fly to a fast-moving crisis that’s as much economic as it is biological.
“I just watch the resiliency," he said. "I watch the care. I watch the innovation. I watch the speed at which we’re bringing solutions to the market in these crazy times, and, boy, it makes me smile.”
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