Decisions, Decisions, Decisions about Maintaining U.S. Manufacturing Competitiveness

As the unemployment rate continues to weigh heavily on a turnaround in the U. S. economy, the national conversation seems to have turned, once again, to the manufacturing industry for analysis and answers.

And why not? Those of us who work in the industry know how important U.S. manufacturing is! Yes, it makes up 21% of the global manufacturing economy, and at $1.6 trillion in annual revenue accounts for 11.2% of GDP. Manufacturing employs some twelve million workers or 9% of the U.S. workforce down from a peak of about 19 million workers in 1970 or about 21% of the workforce. U.S. manufacturing workers are twice as productive as workers in the next ten economies. According to the U.S. Bureau of Labor Statistics, unit labor costs have declined 40% relative to the average unit labor cost of fourteen countries that are major competitors in global markets.

Still we know that many jobs have been outsourced overseas, but we now know that the trend to send part production for some items overseas is reversing because of low quality, high energy and transportation costs and wages that are beginning to increase. From 2005 to 2010, wages in China increased 69% and are expected to continue to increase about 17% annually.

As work continues to be re-shored back to the U.S., jobs will certainly follow. GE has announced that it will bring some appliance production back to the U.S. Caterpillar is bringing some excavator production back to Texas, NCR is bringing ATM production back and those are just a few of the re-shoring efforts by big name companies. There are thousands of small and medium-size manufacturers that are bringing parts production back as well.

Over the last couple of years since the end of the most recent economic downturn, U. S. manufacturing has added nearly a quarter of a million jobs back to the economy according to the National Association of Manufacturers (NAM), but there is a disconnect between the unemployment rate today when we know that many jobs in manufacturing are going unfilled because employers need a skilled workforce and are unable to find qualified candidates to meet their needs.

President Obama recently announced a major expansion of Skills for America’s Future, an industry-led initiative to improve industry partnerships with community colleges and build a nationwide network to maximize workforce development strategies, job training programs, and job placements.

The Manufacturing Institute, the affiliated non-profit of NAM, announced an effort to help provide 500,000 community college students with industry-recognized credentials that will help them get secure jobs in the manufacturing sector. The Society of Manufacturing Engineers (SME), the American Welding Society, (AWS) and the National Institute for Metalworking Skills (NIMS) are included in this credentialing program.

The President also announced an effort to develop a new credentialing system that works for industry and will give students the opportunity to earn manufacturing credentials that will travel across state lines and be of value to a wider range of employers.

A number of community colleges across the country that are part of the National Coalition of Advanced Technology Centers (NCATC) already have outstanding programs in place to supply industry with a qualified workforce, but more is needed and the President’s plan will be helpful, although it will take time.

To bridge the skills gap now, many companies are increasing expenditures in new capital equipment to become more productive and increase their global competitiveness by taking advantage of the continuation of Sec. 179 tax incentives. President Obama first proposed temporary 100% expensing for capital investments last September. The new law enacts the President’s proposal by increasing bonus depreciation to 100% for new equipment purchased and placed into service after September 8, 2010 and through December 31, 2011.

This September, while many American companies join with educators on solutions for workforce development and re-training efforts, they will also attend the imX event and Learning Labs for insight and answers about how they can innovate, become more productive and more competitive in the global marketplace.

Positioned as the Epicenter of Innovation, imX is the forum that will provide a preview of the technologies that this revived workforce will manage in the coming resurgence of U.S. manufacturing.

Peter Borden, President

AMTDA

U.S. Manufacturing Renaissance Will Require Collaboration

The May 10, 2011 editorial titled “The coming renaissance in U.S. manufacturing,” provides an inspiring outlook on an industry that is critical to our nation’s future. However, for this renaissance to take shape and be sustainable, it will require an entirely new way of thinking and behaving.

In the past, the approach favored by manufacturers was an “own it all” and bury the competition mentality, leaving the details to work themselves out along the way.

In today’s economy, it will be crucial for domestic multiple vendor companies – OEMs, integrators and distributors – to work collaboratively. Only with this mindset will the U.S. manufacturing community be able to compete and win globally.

The customer of today, and tomorrow, is more interested in finding the right “total solution” than a “quick fix” to resolve one specific challenge. Customers expect, and will continue to demand, that vendors come together to create these solutions on their behalf.

Manufacturing leaders are gathering to chart this new course for the industry at imX this fall. Will you be on board? Click here to apply for your invitation.

Steve Prahalis

Event Manager for imX

Future of Manufacturing Means Working, Winning Together

Manufacturing Engineering Magazine recently spoke with two imX eXperience partners about the present and future of the manufacturing industry. The importance of collaboration to the latter will be an important theme of imX. The article, titled “Working Together, Winning Together,” appears in the May 2011 issue and features interviews with Tom Dillon, Vice Chairman, DMG / Mori Seiki USA, and John Israelsson, President, Sandvik Coromant US. Excerpts are below.

ME: Is there a greater demand these days for turnkey solutions than we saw in the past? Do manufacturing professionals want plug and play?

Israelsson: To a certain extent, absolutely, there’s more demand for turnkey solutions. But I think… customers today seem to need more help than before to develop a total solution. Maybe they don’t have all the resources… so they are looking to their suppliers—their machine tool suppliers and their cutting tool suppliers—to help them develop that total solution….

Dillon: They still talk about it being a turnkey, but in reality it’s a shared key…. We know our machines; the customer usually knows how to machine their parts as well as anyone because they are doing it already. Together we have the capacity to create positive difference on our end-users' manufacturing floors. The operative word here is “together”. They just want to do it better, faster, more economically. We can certainly assist a great deal in this area, but, in the end, it’s about working together.

ME: [imX] is designed or intended mainly as an educational event. What education-oriented activities are you planning for imX?

Israelsson: Traditionally, we talk about learning, Learning Labs, immediate things. If you think about the target audience for imX—more senior management, more decision makers—they probably are thinking more about profitability, about how to work smarter in general….

Dillon: We are now talking with customers more about where they want to be and less about where they presently are. As for imX, it’s a unique concept. If we can speak to the people who understand where they need to be in the future at their company, they can share such information with other staff members “…I saw something at imX that made good business sense to me.” We will win together, we may not “always” win together, but it will always be together.

More Complex, Integrated Solutions Help Continue USMTC Increases in 2011

The U.S. manufacturing technology consumption has, again, exceeded March expectations and by a large margin.

According to AMTDA, the American Machine Tool Distributors’ Association and AMT – The Association for Manufacturing Technology, March U.S. manufacturing technology consumption totaled $511.15 million. This total, as reported by companies participating in the USMTC program, was up 57.6% from February, and up 99% when compared with the total of $256.88 million reported for March 2010. With a year-to-date total of $1,203.57 million, 2011 is up 118.6% compared with 2010.*

This is a great sign for the U.S. economy. Not only are customers modernizing to become more efficient and to increase capacity as energy and commodity process rise, but also, supplier price increases and reduced inventories seem to be pulling orders sooner in order to use year end depreciation tax advantages.

What is striking is the continued focus on delivering more complex and innovative solutions through collaboration between OEMs and their integration partners. This is the type of collaboration that will be on display at imX.

In the same way that machine tool sales are now combining more features for a total solution, imX is built on promoting Productivity over Capacity. The focus is not on showing every machine or product in a company’s inventory, but instead hosting a conversation on technology integration and innovation, both in the marketplace now, as well as what’s coming down the road.

imX is the forward launch point for manufacturing in the U.S., and we’re counting on you to be part of this “event like no other.”

Peter Borden, President

AMTDA

* For more information including regional breakdowns, visit the USMTC report online. The data in the USMTC report are based on the totals of actual data reported by companies participating in the USMTC program.

imX Achieves Goals of Cooperation & Quality Attendees

As imX has evolved from a concept that pre-dates the Big Recession to a reality that will be upon us in just five months, there have been two primary goals. The first is that imX is about collaboration over competition. The second is that imX is about the quality and not the quantity of attendees.

It has been apparent for quite some time that this event has succeeded on the collaborative angle. From AMTDA and SME joining forces in 2008 to create and execute this “event like no other”, to the commitment of our eight eXperience Partners -- DMG/Mori Seiki U.S.A., FANUC, Kennametal, MAG IAS LLC, Makino, Methods Machine Tools, Okuma America and Sandvik Coromant – we have collaboration down pat.

What we couldn’t know for sure, however, is whether imX truly would attract the high-level industry leaders from across the nation.

Well, the results are now coming in. Having issued only a fraction of the invitations planned for imX, we can confirm that our forecasts were accurate. The first 1,000 eXecutive Guests not only come from 40 different states, they are proving to be the high-level executives for whom imX was developed. Here’s just a sampling of the titles we’re seeing:

· President

· Director of Operations

· Director of Product Innovations

· Director of Manufacturing

· General Manager

· Plant Manager

· VP of Manufacturing

· CEO

· Owner

· VP of Operations and Projects

· Director of Engineering

· Chief Estimator

So it’s clear that we’re on to something with this “event-like-no-other” model. Come September 12-14, the Las Vegas Convention Center will be where industry leaders come together to move manufacturing forward.

Will you be part of the effort?

Welcome to imX. We look forward to your feedback.

Steve Prahalis, eXperience manager