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Bill to Address Skills Training is Stalled in Senate

Tuesday, March 4th, 2014

In the past 15 years, the manufacturing industry has evolved from needing low-skilled production-type assembly workers to being highly technology-infused. It’s no secret that manufacturing companies are now struggling to fill the gap for workers trained with the specific skills needed for today’s advanced manufacturing jobs.

To address this problem and provide training that the youth and the unemployed need to secure jobs, the House passed the Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act (H.R. 803) in March 2013, which was authored by Higher Education and Workforce Training subcommittee chair Virginia Foxx (R-NC). The SKILLS Act would revise and reauthorize job training, employment service, adult education and literacy, and rehabilitation programs currently provided under the Workforce Investment Act (WIA), which has not been reauthorized since its enactment, and is now nearly a decade overdue for reauthorization. The Skills Act would eliminate 35 existing programs and consolidate funding into a single Workforce Investment Fund.

Several governors and workforce training leaders praised the bill:  New Jersey Governor Chris Christie stated, “By streamlining federal workforce training programs, the SKILLS Act would reduce the administrative burden that current law places on the states. It also provides states with the needed flexibility to tailor job training programs, acknowledging that the needs of New Jersey are surely different than those of other states.”

Pennsylvania Governor Tom Corbett stated, “The SKILLS Act restores 15% state set-aside funding to support innovative strategies statewide and locally…In addition to providing flexibility and encouraging innovation, the restored state set-aside also supports the needs of our most vulnerable citizens.”

Florida Governor Rick Scott stated, “H.R. 803 proposes a market-driven approach to talent development designed to prepare individuals seeking employment for the jobs of today – and the jobs of tomorrow…Increasing the business representation on state and local boards improves our alignment with market needs.”

Dr. R. Scott Ralls, president of the North Carolina Community College System, noted that it is “important that reauthorization of the Workforce Investment Act streamlines programs, limits administrative overhead, and enables state and local flexibility to design systems that meet the legislative goals in the most effective and efficient manner. Simplifying the system and moving past the myriad of multiple program titles and funding streams is a fundamental step.”

 Todd Gustafson, executive director of Michigan Works—Berrien-Cass-Van Buren, noted, “Eliminating the 19 federal mandates on representation will further strengthen business engagement. Requiring two-thirds of board members to be employers will enhance the shift from a supply side designed system to a demand or market driven system.”

The Senate version of this bill is S. 1356, the Workforce Investment Act of 2013, and on December 19, 2013, a Motion to proceed to consideration of the measure was made in the Senate.

During an executive session in the Senate Committee on Health, Education, Labor and Pensions in August 2013, Senator Tom Harkin of Iowa delivered the following statement on S.1356, (quoted in part): “It requires states to develop and submit one unified plan to the Secretary of Education and the Secretary of Labor, covering all of the programs authorized under WIA – job training, adult education, employment services, and vocational rehabilitation – streamlining administrative processes at the state level in a thoughtful way. It eliminates several unfunded programs and provides for an innovation fund that will help the system to identify and replicate the most effective strategies for workforce development. It also includes provisions to support better data and evaluations that can be used across all core programs, including common definitions and performance indicators.”

If the Senate passes S. 1356, the measure would then move to conference, a process by which the House and Senate each appoint “conferees” to reconcile the differences between the two pieces of legislation in an effort to produce a version that could gain enough support for passage in both chambers.

According to the Congressional Budget Office, the programs covered by these bills are currently overseen by the Departments of Labor and Education and provide grants to state and local governments as well as to private and nonprofit organizations to provide specified services. Those programs received discretionary funding of $5.5 billion and mandatory funding of $3.1 billion in 2013.

The National Skills Coalition has prepared a side-by-side comparison report on the occupational training and adult education and family literacy provisions1 in the House and Senate Workforce Investment Act (WIA) reauthorization proposals with current law. The 41-page report goes into considerable detail in comparing the current law with the Skills Act and S. 1356.

One of the differences between the House Skills Act and the proposed Senate bill is the composition of the membership of the State Board. Under current law, the membership is composed of:

  • Governor
  • Two members of each chamber of the state legislature, and
  • Representatives appointed by the governor, including: Business representatives, Chief elected officials (representing both cities and counties where appropriate),Labor representatives, and Youth organization representatives

Representatives of individuals and organizations with experience and expertise in the delivery of workforce investment activities including chief executive officers of community colleges and community based organizations, lead state officials of mandatory partner agencies, and other representatives and state agency officials that the governor may designate.

In contrast, the Skills Act requires that “two-thirds of board members be representatives of the business community”  and “eliminates requirement that local board include representatives from local educational entities, labor organizations, community-based organizations, economic development agencies, and one-stop partners.” It maintains “the governor, chief elected officials, a state agency official responsible for economic development and other such representatives as the governor should designate to serve on the board.”

The Senate bill, however, revises current law for State Board membership as follows: majority of representatives must be employers or representatives of business or trade associations; at least 20 percent must be representatives of labor and CBOs or youth serving organizations, and adds representatives of a joint labor-management program or apprenticeship program as a required partner.

Judy Lawton, CEO of The Lawton Group, past president of the San Diego Workforce Investment Board and current Chair of the Adult Programs Committee, provided me with the following comments regarding the Skills Act: “The San Diego Workforce Partnership completed their Five (5) Year Plan more than a year ago and rolled it out to the public shortly thereafter. It is very comprehensive, well thought out, and definitely streamlines practices and procedures and strategic thinking along the lines of programs and program delivery methods. At our last Adult Programs Committee meeting, we recommended apprenticeship programs to the full Workforce Investment Board through the collaborative efforts of local Union leaders, business leaders, educators, and skills trainers. As for the Boards being comprised of 2/3rd business people, I’m not so sure. The WIB is already mandated by law to have 51% business and that community is well represented. The Unions belong at the table as they are becoming more involved with the necessary apprenticeship programs, and their presence is welcomed.”

The current law requires a unified state plan that is based on a five-year strategy, while the Skills Act requires a three-year plan, and the Senate bill requires a four-year plan.

Both the Skills Act and the Senate bill maintain the current law with regard to the establishment of the One-Stop Delivery System for services and the delivery of services, but have different plans than the current law for infrastructure funding.

A major difference of the Skills Act compared to current law and the Senate bill is that it repeals the Youth Activities section of the current Workforce Investment Act. It also repeals:

  • Native American programs
  • Migrant and seasonal farm worker programs
  • Veterans’ workforce investment programs
  • Youth opportunity grant program

The National Skills Coalition sent a four-page letter on March 4, 2013 to the Committee on Education and the Workforce Committee of the House of Representatives expressing their grave concerns about eliminating the above programs and explained their additional reasons for opposing the passage of the SKILLS Act. The other reasons for their opposition are too complex for me to attempt to summarize. As usual, the “devil is in the details,” so I highly recommend that readers check out the links to the report and letter that are herein provided.

 San Diego Workforce Partnership President Peter Callstrom provided me with the following word of caution:  “The Workforce Investment Act (WIA) is long overdue for reauthorization. There are competing visions with respect to how to best go forward: reauthorize as is, or reconstruct through the ‘Skills Act’ – or some combination of both. The WIA works well and thousands of individuals have, and continue to be, supported in their careers. Where, and how, we go from here is important. In the end, we all want local control in order to address our unique needs. As the local Workforce Investment Board (WIB), we welcome any solution that results in more resources for Our region led by Our residents to support Our workforce. Let’s hope that politics doesn’t get in the way of that.”

Well said, Peter.

 

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San Diego Manufacturing Trends

Wednesday, January 15th, 2014

From 2000 to 2011, the U. S. lost 5.8 million manufacturing jobs and 57,000 manufacturing firms closed. U.S. Department of Commerce shows that “U.S. multinational corporations… cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million.”

Over the last three years, we have finally seen a growth of about 526,000 manufacturing jobs nationwide for a 4.59% growth rate, but California has lagged behind the nation at only a 0.63% growth rate for 7,900 jobs gained. Mainly due to the effects of sequestration on our military/defense industry, San Diego continued to lose manufacturing jobsin 2013, losing more than 2,000 jobs from February – November.

Offshoring has been major cause of slow economic growth after Great Recession and the high unemployment has exacerbated local, state and federal budget deficits. This has resulted in a weakened middle-class, declining innovation, and lower sales levels in weakened home market.

“Reshoring”/Resurgence of “Made in USA”

A September 2003 report prepared for the U. S. Congress U. S.–China Committee on Economic and Security Review Commission, by Peter Nolan of the University of Cambridge stated, “A ‘‘herd herd ‘mentality to participate in the ‘‘Chinese miracle’’ developed among global giant corporations… Global corporations now view China as central to their long long-term strategy.”

A Stone Associates interview with Technology Forecasters (10/21/03) corroborated the fact that some companies were following this “herd mentality” in migrating to China even when it didn’t make economic sense:  “There is a herd mentality with OEMs in China China—sometimes it makes sense, sometimes it doesn’t—not always rational decision… People tell their bosses what they want to hear hear—(going to China) gives a boost to the stock valuation, but you really have to do the analysis on a case by case basis.”

Now, the offshore supply chain dynamics are changing:

  • Oil prices – tripled in the last 5 years raising shipping costs
  • Labor rates rose about 15-20% year-over-year for last 5 years in China
  • Component/material prices increasing
  • Automation/robotics in U.S. has increased productivity
  • Political instability in China – Labor riots/strikes
  • Risk of disruption from natural disasters
  • U.S. $ declining

Most companies don’t look beyond quoted unit price to make a decision of which vendor to select. They don’t do a Total Cost of Ownership (TCO) analysis, which simply stated, is an estimate of direct and indirect costs. The 13th edition of the APICS (supply chain organization) dictionary says:  “In supply chain management, the total cost of ownership of the supply delivery system is the sum of all the costs associated with every activity of the supply stream.”

The Reshoring Initiative was founded by Harry Moser, former CEO of GF Agie Charmilles in 2010. The goal is to change the sourcing mindset from “offshored is cheaper” to “local reduces the Total Cost of Ownership” and train OEMs and suppliers on why to source local and how to use TCO Calculator. Free Total Cost of Ownership (TCO) software is provided for OEMs and suppliers/unions.

Sourcing is slowly moving back to the United States. The 2012 MIT Forum for Supply Chain Innovation Reshoring Study revealed:  61% of larger companies surveyed “are considering bringing manufacturing back to the U.S” and 15.3% of U.S. companies stated that they are “definitively” planning to re-shore activities to the U.S. In April 2012 www.mfg.com stated that 40% of contract manufacturers had done reshoring work this year.

Manufacturing Jobs / Year

*Estimated / **Calculated 

The Reshoring Initiative has calculated reshoring’s share of manufacturing job growth since Jan. 2010 is:

Job growth: ?500,000

Reshored jobs: ?80,000

Reshoring % of total: ?15%

Now in 2013, more companies are moving their services and manufacturing operations back to the United States. Nationally, General Electric and Whirlpool have moved some appliance manufacturing back to the U. S. Caterpillar moved operations from China to Mexico and the US. Locally, EcoATM, 451 Degrees, and Solatube have reshored by moving manufacturing back to San Diego County. Some of the parts, assemblies, and products that are not cost effective to come back to the U. S. are going across the border to Baja California, Mexico, and major contract manufacturers in Tijuana, Mexico, such as Sumitronics, are experiencing significant reshoring.

The demand for “Made in USA” goods seems to be increasing and is helping the resurgence of American manufacturing in certain areas, especially true in the apparel industry. Indeed, many consumers like the quality perception boost associated with “Made in USA” labels certifying that these goods were in fact made in America. American made items are also growing in popularity because our production costs are declining while Chinese labor is actually increasing.

Offshore outsourcing will continue indefinitely. The desirable” locations for outsourcing will change over time, and the purely financial benefits of lower cost will erode over time. The challenge is to keep as much as possible within the United States, and if more companies would utilize the TCO estimator worksheet, it would help maintain and return manufacturing to America.

Additive Manufacturing

Additive Manufacturing has been hailed by ‘The Economist’ as the catalyst of ‘the third industrial revolution’ and is projected to have a significant impact on manufacturing in the near future. It has the potential to revolutionize the way we make almost everything. Currently about 28% of the money spent on 3D printing of parts is for final products, but it is predicted to rise to 50% by 2016 and to 80% by 2020.

The major Additive Manufacturing methods are:

  • Stereo lithography
  • 3D printing
  • Laser sintering
  • high powered laser fuses powered metals into fully dense 3D objects, layer by layer
  • Fused-deposition modeling
  • A plastic or metal wire is unwound from a coil, supplying material to an extrusion nozzle to form success layers

San Diego is blessed with hundreds of design engineering and product development companies, many of which have one or more types of Additive Manufacturing equipment. There is also a service bureau for Additive Manufacturing in Poway, Solid Concepts, which has all of the types of equipment. A few of the engineering design/product development companies with which we are familiar are:

A Squared Technologies

Clarity Design

DD Studio

D&K Engineering

Dynapac Design Group

Expertise Engineering

Fallbrook Engineering

Flex Partners

Leardon Solutions

Koncept Design

Redpoint Engineering

Triaxial Design

In addition, there is the MakerPlace in San Diego, which inventors and entrepreneurs can think of it as their “dream” garage shop for developing and producing their own products. It is a place where they can use a variety of fabrication equipment & tools to work on projects:  Woodworking, metalworking, electronics, embroidery, sewing and specialty tools such as 3D printers, laser cutters and engravers. There are even

“incubator” offices upstairs for businesses to operate out of the same building as the fab shop.

Training to meet Manufacturing Skills Gap

In 2011, the U.S. Bureau of Labor statistics estimated that 2.8 million, nearly a quarter of all U.S. manufacturing workers, were 55 or older. The improvement of the manufacturing industry has been a mixed blessing because as more skilled workers are needed, the supply is limited because baby boomers are retiring or getting close to retirement. “The oldest baby boomers turned 65 on Jan. 1, 2011, and every day thereafter for about the next 19 years, some 10,000 more will reach the traditional retirement age, according to the Pew Research Center.” What makes the situation worse is that there are not enough new ones to replace them because the subsequent generations were smaller and fewer chose manufacturing as a career.

This has resulted in an insufficient number of workers trained for advanced manufacturing jobs. Modern manufacturing is highly technical and requires understanding and proficiency in a wide variety of competencies. In the past 15 years, the manufacturing industry has evolved from needing low-skilled production-type assembly workers to being highly technology-infused. Thus, it is more of a skills gap in the specific skills needed by today’s manufacturers than a shortage of skilled workers.

A key component has been the development of the (National Association of Manufacturers) NAM-Endorsed Manufacturing Skills Certification System—a system of stackable credentials applicable to all sectors in the manufacturing industry. In June 2011, President Obama announced that the Skills Certification System was the national talent solution for closing the skills gap and addressing this key issue for American manufacturers. The Society of Manufacturing Engineers (SME) Education Foundation leads in encouraging youth to get involved in manufacturing technologies through STEM-related activities in the K–12 levels, as well as supporting and advancing the Certification System for manufacturing skills.

San Diego is fortunate to have more opportunities for training in manufacturing skills than many other regions as shown below:

  • San Diego City College – AA degree in Manufacturing Technology, Machining Certificate
  • SDCCD Continuing Education Center – metal fab, welding, plasma cutting
  • Miramar College – biotech/biomedical lab technicians
  • Mira Costa College – Machining Certificate
  • San Pasqual High School – two year machining program
  • Chaparell High School (Charter) – two year machining program
  • Quality Controlled Manufacturing Inc. – machining training and apprenticeship
  • Workshops for Warriors (non-profit) – machining, sheet metal fab, welding, programming

Licensing vs. starting a company

As a member of the steering committee for the San Diego Inventors Forum (SDIF), I have noticed that in the last two years, more inventors are planning to license their technology vs. starting a company (probably about 70%) compared to about 50% previously). However, this trend doesn’t hold true for CONNECT’s Springboard program for entrepreneurs according to Ruprecht von Butlar. In an interview, he said, “The demand for the Springboard program has stayed consistent over the past few years, but the composition has changed ? more technology, biotech/biomedical, and life science. All of the entrepreneurs in their program have either already formed companies or plan to form companies rather than licensing their technology.”

I also interviewed Dr. Rosibel Ochoa, Executive Director of the UCSD Jacobs School of Engineering von Liebig Entrepreneurism Center, and she said they have 30 teams in their program, and all of them plan to start companies rather than licensing their technology.” The Center serves UCSD professors, graduate students, undergraduate students, and alumni. The professors are the only persons more interested in licensing their technology rather than leaving UCSD to be part of a team to start a company.

The difference between the Inventors Forum and the other two programs may be the fact that most of the inventors coming to our meeting in the past two years have been in the “Baby Boom” generation, now between the ages of 48 – 68, and they may realize by now that they don’t have the entrepreneurial skills to found and develop a company. Also, many of them are serial inventors, who enjoy the technical part of inventing a new product, and then want to go on to working on their next invention. Many of the under 40 inventors seem to be more interested in starting a company.

Outlook for 2014

Positives:

–     Reshoring is creating more manufacturing jobs and generating more regional GDP

–     Additive manufacturing is accelerating development of new products

–     Broad access to skills training is available in San Diego

Negatives:

–     Unknown economic impact of Obamacare for manufacturers because of employer mandate

–     Possibility of full sequestration being restored to pay for extending unemployment benefits

If the current military/defense budget remains in effect without the restoration of full sequestration that affected San Diego adversely last year, this year should be better than 2013 for local manufacturers. All of us in San Diego’s manufacturing industry certainly hope so.

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Is There Really Free Career Technical Training?

Tuesday, November 19th, 2013

Yes, there is, at least in California. I was recently given a tour of the San Diego Continuing Education headquarters facility by Dean Jane Signaigo-Cox and Vice President Brian Ellison. Continuing Education is the new name for what we used to call Adult Education where you could go back to school to get your high school diploma or take enrichment classes in art, cooking, foreign languages, sewing, etc.

While these types of classes are still being offered to adults over the age of 18, it is now possible to get technical job training and even certification in a variety of careers, such as automotive, computers, electronics, graphics, upholstery, pipe fitting, and welding. Unbelievably, these classes are free in California.

In 2006, then Governor Schwarzenegger identified workforce skills development, referred to as Career Technical Education (CTE), as a state priority. The passage of an education bond provided $500 million for CTE initially, and subsequent budgets have continued to fund the program. The plan was approved by the California State Board of Education on March 12, 2008 and approved by the U.S. Department of Education on July 1. CTE is delivered primarily through K-12 schools, adult-education programs, and community-college programs. CTE programs are closely linked with those of workforce and economic development agencies and industry and rely on the participation of community-based organizations. The programs are as follows:

California K-12/Adult Programs

  • Elementary school awareness and middle school introductory CTE programs.
  • High school CTE, offered through 1,165 high schools in single courses, in course sequences or through over 300 integrated “learning communities.”
  • Career pathways and programs through 74 regional occupational centers and programs.
  • Adult education offered through 361 adult schools and more than 1,000 sites.
  • Apprenticeship offered through more than 200 apprenticeship program and adult schools

The Continuing Education Center I visited is under the jurisdiction of the San Diego Community College District, but all of the California Community Colleges throughout the county and state offer the following programs. 

  • Occupational programs at 109 colleges, leading to certificates, associate degrees, and transfers to four-year universities.
  • Noncredit instruction for short-term CTE programs offered by 58 colleges.
  • More than 160 apprenticeship programs at 39 colleges.
  • Middle College High Schools (13) and Early College High Schools (19).
  • Tech Prep programs delivered through 80 Tech Prep consortia, comprising 109 colleges and their feeder high schools.
  • Contract education provided to organizations for their employees.

San Diego’s Continuing Education program has been making history since 1914, when it started providing job training for returning military veterans from WWI. Year after year, more than 74,000 students are served annually by the seven Continuing Education campuses and many offsite community locations throughout the city of San Diego.In 2013, more than 3,600 students received Certificates of Completion for programs through San Diego Continuing Education (accreditation through the Western Association of Schools and Colleges, the highest level of accreditation a California school or college can receive.)

According to Jane Signaigo-Cox, who oversees many of these career technical programs, “more than 1800 of the certificates awarded were for these Career Technical Education job training programs. Since students spend an average of 65 to 70 percent of course time using hands on tools and technology to learn relevant skills for today’s jobs, they are prepared for an entry level position in their field after completing these courses.”

The Little Hoover commission, a non-partisan legislative agency, named San Diego Continuing Education as a top model program for efficiency and effectiveness in California. The Commission produced an in-depth, well-documented report, “Serving Students, Serving California:  Updating the California Community Colleges to Meet Evolving Demands.” The report was presented to the California governor and legislature and includes several recommendations that suggest how programs could and should function in today’s world.

San Diego’s Continuing Education is the largest adult educational institute of its kind in the nation and has been invited to join 45 academic institutions in the Global Corporate College Network. The Global Corporate College was founded by leaders of entrepreneurial colleges and universities and leverages the best learning industry practices with the resources of accredited academic institutions.  The organization is committed to helping employers realize the full potential of their workforce by providing training opportunities for corporations and organizations throughout the U. S. and Europe and currently services 17 industry sectors. In San Diego, this type contract education is provided through the Employee Training Institute, which offers online training, classroom training, and on-the-job-site training for a fee. Hundreds of customized training options are available to San Diego businesses. Contact the Director of ETI at 619-388-1282 to learn more.

Since I am aware of the shortage of skilled workers in the manufacturing sector, I was particularly interested in the type of career technical training available to address this need. My tour of the Educational Cultural Complex campus included the pipe fitting and welding training department. I was amazed at the number of Miller Electric welding stations they had to teach students in both MIG and TIG welding techniques. They even had one of the newer Lincoln Electric welding simulators that I got to try out at the FABTECH show in Las Vegas in 2012. Because of budget cuts for staff, there is currently only one daytime welding class of about 25 students and one evening class this fall.

After certification, entry-level pipe fitters can earn $17/hour and welders can earn $19/hour, which is a very good entry-level wage in San Diego. Journeymen welders can make double this wage. These are no easy programs:  both require 1,200 hours of training, completed in 48 to 52 weeks. The Continuing Education program provides Career Development Services (CDS) that helps students with resume preparation, interview tips, and specific information about companies that are looking for certain skills.  Regular job fairs are hosted at various campuses. Students also have the opportunity to meet with a career counselor who can help with identifying and setting goals that will keep students on the right track toward employment.

Most of the career technical training requiring specific equipment is only available at the Educational Cultural Complex, but electronic technician training is only provided at the mid-city campus. Training for machinists is only available at the San Diego City College campus as a for-credit college class.

Even after losing more than a half million manufacturing jobs since 2008, “California is by far the number one state for manufacturing jobs, firms and output – accounting for 11.7 percent of the total output, and employing 9 percent of the workforce. CA manufacturing generates $229.9 billion, more than any other state.”

Manufacturing’s tarnished image has caused Gen X and Millennials to not even think of manufacturing as a career. As Sr. Editor, Patricia Panchak of Industry Week, wrote in her November 7th article, “Manufacturer’s Agenda: Toward a New Skilled Workforce Shortage Solution,”, “too many people viewed manufacturing jobs as low-paying, “dumb, dirty, dangerous and disappearing.”

This is certainly not true in San Diego and other parts of California. The majority of manufacturing plants in California are clean and high-tech compared to the heavy industry of the mid-west and so-called “Rust Belt.” Manufacturing jobs provide the opportunity to make higher wages according to many past Industry Week articles that have highlighted“statistics showing that manufacturing jobs on average pay higher salaries than jobs in other sectors.”

If you are in a low-paying or dead-end job, you may want to consider getting the technical training you need to obtain a higher paying job in manufacturing through your local community college or continuing education program.

If you are a company owner or member of the management team of a manufacturing company, you may want to contact your local community college or continuing education center to provide job offers to graduates of their certification programs or get your existing employees trained in new skills.

If you don’t live in California, then try a search using “career technical training” in your state to see what you can find. It may change your life or help you find the skilled workers your company needs.

 

 

 

 

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What is a Secret to the Success of Indiana Manufacturers?

Tuesday, November 5th, 2013

Many companies in Northern Indiana were hit hard by the recession and the dramatic downturn in the auto industry, but some manufacturers were able to weather the storm, recover rapidly, and resume good growth well before the rest of the country. Manufacturing in the U.S. is undergoing a renaissance, and Indiana ranks as the top state where manufacturing contributes the most to the nation’s total economic output. For example, Northeast Indiana’s medical device companies control 34 percent of the worldwide orthopedic market, translating into $12 billion in revenues. They are market share leaders in the $37 billion orthopedic and biologics industry, and combined together, they control 60 percent of the worldwide hip replacement market and 64 percent of the worldwide knee replacement market. Three companies shared their stories with me in recent interviews.

Micropulse Incorporated

I interviewed Brian Emerick, CEO, who founded Micropulse in 1988 and is the sole owner of the company. The company now manufactures from a state-of-the-art 100,000 square foot facility with over 200 employees next to the farmhouse where it was originally started.

Micropulse prototypes and manufactures the most demanding instruments and implants in the medical device industry. They don’t have their own product line and make custom parts for OEMs. They are a contract manufacturer selling to the orthopedic industry. About 50% of their business is spine related, and the rest is a mix of hip, knee, and other joint implants.

Their employees have been trained in “Lean manufacturing” principles and tools using the local Manufacturing Extension Program and courses at the local community colleges. They have several Black Belts now on staff, and they do regular Kaizen events and utilize Six Sigma practices and tools. Their quality system is certified to ISO 13485.

Brian said, “We started being impacted by competition from offshore, especially China about 10 years ago, but business is coming back. Some of our bigger customers like Johnson & Johnson and Zimmer set up plants in China. We do more work with smaller companies that don’t have their own plants in China because the quality requirements for implants are too stringent to use Chinese contract manufacturers.”

They were flat in 2009 during the recession, but the orthopedic industry as a whole was down about 25%. They have great customers and started growing again in 2010. Their growth since has been about 10% per year. They recovered by not buying much and cutting expenses.

They spend about $2 million per year buying new equipment and updating software systems. They are considering adding another 60,000 sq. ft. within the next 18 months.

Brian said, “The secret to our success is the employees that make up our team. We have a solid workforce with very low turnover and have quality customers.”

C&A Tool

Richard Conrow founded C&A Tool in 1969 in a garage in Churubusco, Indiana as a tool and die operation with 10 employees. C&A Tool is a poster child for the manufacturing revival in the U.S. As a privately held company, C&A Tool has continued to add jobs, machinery and square footage each year. Having sustained 44 years of economic ups and downs, the company has grown to employ more than 530 people with 750,000 square feet of manufacturing space.

I interviewed Rob Marr, V. P., who said, “Our services are contract machining and high precision grinding. We don’t have our own products, but do a lot of prototype and development for our customers.” They bought Direct Laser Sintering equipment to be able to do Additive Manufacturing, also known as 3D printing, which utilizes 3D CAD data to produce a part. In the case of C&A Tool, the parts are metal, not plastic, made by Direct Laser Sintering. This technology produces metal prototypes and production parts in a matter of hours.

Their main markets are:  orthopedics for instruments and implants, automotive, electric motors, fuel systems, and aerospace. The company currently has four facilities and has invested in new capabilities, adding new equipment to support jet engine, power generation and industrial markets. This market mix means that they are ISO 9001:2008 certified, as well as TS949, AS 9100, and ISO 13485 certified.

Training the next generation of manufacturers is critical for the future. Rob is passionate about educating the manufacturing workforce, the general public, and his local community that manufacturing is not the dark and dingy days of our forefathers. For the past 36 years, C&A Tool has partnered with the local high schools to offer part time jobs to more than 60 students during the school day that allow them to have on the job training and transition from the classroom to the workplace more seamlessly. In addition to training high school students, the company brings in math teachers to show them the real world of manufacturing.

They have been impacted by competition from offshore, especially China, but have been getting business back for a couple of years. They compete more with Europe than China because of their high precision machining and grinding.

They were impacted by the recession, particularly their automotive business. During part of 2009, their business was down by 40%. New development was down, but they didn’t lay off any one and even bought another facility in 2009. They did not do anything special to recover, just continued their business culture.

They focus on investing heavily in capital equipment and software every year, even during the recession. They buy new equipment as their motto is “to maintain an excess capacity of square footage and equipment, even if it doesn’t have the customer base to support the investment at the moment to be able to take advantage of new opportunities.”

Rob said, “The secret to our success is that our founder laid a foundation for the company with the right people and equipment. We have evolved over the years. It really comes down to the people and allowing them to succeed and learn from their mistakes. We do what’s right by investing in people and equipment so our employees can take pride in their work and we elevate the industry.”

Forest River Inc.

Forest River was founded in 1996 by Peter Liegl. He foresaw an RV company dedicated to helping people experience the joy of the outdoors by building better recreational vehicles. After purchasing certain assets of Cobra Industries, the company started manufacturing pop-up tent campers, travel trailers fifth wheels and park models.

Continually growing, Forest River now operates multiple manufacturing facilities throughout the Midwest and West coast producing motorized Class A, B and C vehicles, travel trailers, fifth wheels, pop-up tent campers, park model trailers, destination trailers, cargo trailers, commercial vehicles, buses, pontoons, restroom trailers and mobile offices.

They were acquired in 2005 by Berkshire Hathaway, but Mr. Liegl has remained the CEO. Forest River shares 80-81% of the industry with two other companies, leading with a 35% market share.

Doug Baeddert, GM of 14 operating units, said “We don’t sell direct to the public; we sell through dealers focused on their main markets of recreation, commercial businesses for vehicles, pontoons, and mobile offices, and municipalities for buses and restroom trailers.”

Their plants are non-union, and 85% of all production occurs in Indiana. The industry is an assembly-based industry not a vertical industry. They rely on their suppliers and are basically an “assembler” of parts, components, and assemblies that are manufactured by their vendors. For example, many of their wood assemblies are made by small Amish wood shops that are located in Northern Indiana.

They have not been impacted by offshore competition for their products, but over the last 15 years, the imported content of their vehicles has grown. It reached a peak a couple of years ago and is leveling off now.

Doug said, “In 2008-2009, there was a 33-34% reduction of manufacturing of RVs industry-wide. The consolidation of companies has been healthy and good for the financial stability of our industry. There has also been a consolidation of dealers so there are about one-third fewer dealers than prior to the recession.”

During the recession, they didn’t cut any salaried or sales personnel because they weren’t top heavy. They downsized some of the production workforce, but not significantly. They haven’t noticed any effect from sequestration nationwide, and their growth is up 40% this year.

They don’t have a formal budget for investing, but they are continually doing new product design and improving their existing products. Each division is autonomous in product development and is very entrepreneurial, innovative, creative, and visionary in their design work for new products. They can make minor changes from concept to prototype in as little as three days. However, a major technology change, particularly vehicles, can take up to a year.

Doug said, “The secret to our success is the right leadership of our founder, Pete, our people, our products, and our processes. We give enough rope to our people to succeed or fail and have a very low turnover.”

In answer to my question about their secret to success, they all said their core competency as a company is the talent and expertise of their people from management on down the line, not just their equipment or facilities. My own experience in business and as a writer has convinced me that it is the team of people that make up a company that is the key to its success or failure. These stories are examples of achieving the American dream of being a successful entrepreneur.

 

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Second Annual Manufacturing Day Celebrates American Knowhow

Tuesday, September 24th, 2013

The mission of Manufacturing Day 2013 on Friday, October 4th is to highlight the importance of manufacturing to the nation’s economy, address common misperceptions about manufacturing by giving manufacturers an opportunity to open their doors, and show what manufacturing is — and what it isn’t.

Manufacturing Day has become an annual national event after its inaugural year in 2012 that is executed at the local level supporting hundreds of manufacturers across the nation that host students, teachers, parents, job seekers and other local community members at open houses designed to showcase modern manufacturing technology and careers.

In its first year, more than 240 events were held in manufacturing facilities in 37 states and more than 7,000 people participated. This year’s celebration will feature open houses, public tours, career workshops and other activities to increase public awareness of modern manufacturing. Events also will introduce manufacturers to business improvement resources and services delivered through the MEP’s network of hundreds of affiliated centers across the country.

By working together during and after Manufacturing Day, manufacturers will begin to address the skilled labor shortage they face, connect with future generations, take charge of the public image of manufacturing, draw attention to the many rewarding high-skill jobs available in manufacturing fields, and ensure the ongoing prosperity of the whole industry.

This year’s Manufacturing Day is being co-produced by the Fabricators & Manufacturers Association, International (FMA), the National Association of Manufacturers (NAM), the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP), Industrial Strength Marketing which is a leading industrial B2B marketing agency, and the Manufacturing Institute. The national media partner for the event is the Science Channel.

“Manufacturing Day is a great opportunity to shift Americans’ perception that it is not our grandfather’s manufacturing anymore and to showcase the tremendous career opportunities manufacturing has to offer,” said NAM President and CEO Jay Timmons. “This day is an engaging way to attract young people and get them excited about pursuing a career in a technology-driven, innovative environment that will also provide a good-paying job. We encourage all manufacturers and manufacturing associations to get involved and share what we already know—manufacturing makes us strong.”

A long list of trade associations and private companies have joined the effort as sponsors that includes Shell and the Alliance for American Manufacturing at the Gold level, The Association of Manufacturing Excellence, Precision Metalforming Association, SME Education Foundation, Association for Manufacturing Excellence, the Plastics Industry Trade Association, and IHS GlobalSpec at the Silver level, as well as many others at the Bronze level. The long list of endorsers on the website includes my own www.savingusmanufacturing.com organization.

“We’re honored to be a part of Manufacturing Day this year and look forward to helping make it a success,” said Scott Paul, president of AAM. “An innovative and growing manufacturing base is vital to America’s economic and national security, as well as to providing good jobs for future generations.”

“The co-producers could not be more pleased that these organizations and companies, which work on such an integral level with all sectors of the manufacturing industry, are putting their full support behind Manufacturing Day,” said Ed Youdell, president and CEO of the Fabricators & Manufacturers Association. “Their reputation and their reach to professionals in the industry, as well as educators and students, will help generate participation in Manufacturing Day events across the nation.”

The SME Education Foundation sees this is an opportunity for educators and parents to visit local employers with children, particularly those in middle school, to get them excited about the career opportunities available for those who have critically important STEM (science, technology, engineering and mathematics) skills.

“The SME Education Foundation is dedicated to opening multiple pathways for young people to find fulfilling, high paying careers in manufacturing.  Manufacturing Day is an opportunity to highlight manufacturing as vital to our economy and a career path that helps to growing wealth for the individual and for our nation,” said Bart A. Aslin, CEO, SME Education Foundation.  “Positive national media attention can help to dispel misconceptions about industries that provide safe, clean work environments while manufacturing products that improve standards of living in our global economy.”

Supported by this group of co-producers and industry sponsors, Manufacturing Day is designed to amplify the voice of individual manufacturers and coordinate a collective chorus of manufacturers with common concerns and challenges. The rallying point for a growing mass movement, Manufacturing Day empowers manufacturers to come together to address their collective challenges so they can help their communities and future generations thrive.

From now until Manufacturing Day, October 4th, enter the Manufacturing Day Sweepstakes to win a trip for two to a 2014 race of your choice, courtesy of Shell Lubricants. Eligible races include any of the Sprint Cup Series or Nationwide Series races during the 2014 season. The winner will be selected on October 7, 2013 and will be contacted shortly thereafter to claim their prize. Click here to enter today!

According to the 2012 Public Perception of Manufacturing report by the nonprofit Manufacturing Institute, 80 percent of Americans believe manufacturing is important to our economic prosperity, standard of living and national security. Yet, only 30 percent would encourage their children to go into manufacturing as a career. The hope is that by providing media, educators, parents, and kids with an inside look at the high-tech world of manufacturing this percentage will begin to grow.

With the gap growing each year between the skills students learn in school and those they will need on the job, it is increasingly difficult for manufacturers to find and hire qualified employees. By promoting Manufacturing Day, manufacturing associations and other organizations led by NIST MEP centers and the FMA said they want to remove some of the myths surrounding manufacturing. For example, manufacturing is a solid, long-term career choice for qualified candidates—including the young people who will form the workforce of tomorrow.

Here is a summary of a few reasons why we should acknowledge the importance of manufacturing by observing October 4th as Manufacturing Day that are outlined in greater detail in the chapter on “Why we should save American Manufacturing” from my book Can American Manufacturing be Saved? Why we should and how we can:

  • Manufacturing is the foundation of the American economy, and high-paying manufacturing jobs spurred a robust and growing economy and improved our quality of life. Manufacturing jobs were responsible for the lower working class rising into the middle class the last century.
  • Manufacturing is critical to our national defense because American manufacturers supply the military with the essential needed to defend our country. Without a strong manufacturing industry, America could lose future wars.
  • Manufacturing wages and benefits are 25-50 percent higher than non-manufacturing jobs. Only 16 percent of today’s workers earn the $20/hour ? down 60 percent since 1979.
  • United States is the world’s third largest exporter after China & Germany. Manufactured goods make up more than 60percent of U. S. exports, and high-tech products are largest export sector – four times as much as agriculture.
  • Manufacturing supports states’ economies through the taxes they pay. Manufacturing is the largest sector in 10 states, second largest in 9 states, and third largest in 21 states. Losing the critical mass of manufacturing will result in larger state and federal budget deficits. Over 90 percent of all manufacturers are small businesses of less than 100 people.

In my home town of San Diego, Manufacturing Day is being promoted by the California Governor’s Office of Business and Economic Development, the County of San Diego, the City of San Diego, the San Diego Regional Economic Development Corporation, the East County EDC, the San Diego North County EDC, CONNECT, California Manufacturing Technology Consulting (CMTC), the Tijuana EDC, and D&K Engineering. The day starts off with:

8 a.m.  Breakfast and Networking
8:30 – 10 a.m. Program
San Diego City College, Corporate Ed Center
1551 C Street, San Diego, CA 92101

Moderator: Mark Cafferty, President & CEO, San Diego Regional EDC

Panelists joining the conversation are:
Stephan Aarstol, Founder & CEO, Tower Paddle Boards
Alex Kunczynski, President, D&K Engineering

Rick Urban, COO/CFO, Quality Controlled Manufacturing Inc.

Chris Wellons, Vice President of Manufacturing, Taylor Guitars

Unfortunately, this event is already sold out, but you can add your name to the wait list at www.october4mfgday.eventbrite.com.

Tours:  Following this Kick-off breakfast, you are invited to tour various local manufacturers who have agreed to open their doors to the community. Further information and registration to attend the tours can be found at www.MFGDay.com. Click on “Attend an Event” to find a tour near you.

To learn more about Manufacturing Day or to sign up to host or participate in one of the events, log on to www.mfgday. Organizations that wish to become involved as official sponsors of this program may email info@mfgday.com.

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How we can Solve the Skills Shortage and Attract the Next Generation of Manufacturing Workers

Tuesday, April 2nd, 2013

We lost 5.7 million manufacturing jobs between the year 2000 and 2010, and over 57,000 manufacturing companies went out of business. We have only gained about 500,000 manufacturing jobs since January 2010, so some ask why we have nearly 600,00 jobs going unfilled when the unemployment rate for the manufacturing industry jumped is still ranging from 6.4 percent in November 2012 to 7.2 percent in February 2013. The main reasons are:

  • Unemployed workers are mainly from industries that have been decimated by trade deficits with China and American manufacturers choosing to outsource manufacturing offshore.
  • Fewer young people choosing manufacturing as a career choice because of poor image
  • Attrition from retirement that is getting worse as baby boomers started to retire

First, a large percentage of the people who lost their jobs came out of industries that were decimated by Chinese product dumping and the offshoring of manufacturing – textiles, furniture, tires, sporting goods, and the garment industry, to name just a few.

Most of these industries were dominated by large manufacturers employing hundreds to thousands of workers in plants located in the northeast, Midwest, and south. These workers either worked on assembly lines or utilized specific skills suited to their industries. In some cases, a textile plant, furniture plant, or automotive plant was the only large employer in a town. When the plant closed, workers either had to take whatever other job they could find or relocate to another area. In most cases, these workers didn’t have the specific skills needed in high-tech manufacturing industries.

An added blow was the decimation of the automobile and auto parts industry during the Great Recession when North American auto production dropped from a high of 17 million vehicles per year down to below 10 million vehicles in 2008 before climbing back up to about 13 million in 2012.

Second, manufacturing’s tarnished image has led young people entering the workforce to choose other career paths. In an article titled, “What the shortage in skilled manufacturing workers means to a hungry industry” of the e-newsletter Smart Business, Kika Young, human resources director at Forest City Gear Co. Inc. of Rockford, IL, said “Most people in Gen Y out of high school don’t think of manufacturing as a career or as a good option. They don’t think of it as glamorous; they think of it as dark and dingy and dirty and aren’t interested in going into that.”

Emily Stover DeRocco, president of The Manufacturing Institute of Washington, D.C., said, “It’s absolutely true that the image and the definition of manufacturing in this country has not kept up with the industry.” She added, “Companies need to invest more in employee training and make workforce skills a top strategic priority. Our education system must also do a better job aligning education and training to the needs of employers and job seekers. In the face of a global recession and intense international competition, American manufacturers must differentiate themselves through innovation and a highly skilled workforce.”

Third, the attrition of skilled workers through retirement, death, and disability year after year is compounding the problem. Harry Moser, retired president of GF AgieCharmilles and founder of the Reshoring Initiative, estimates that “about 8 percent of the manufacturing workforce is lost each year due to retirement, promotion, career changes, disability, and mortality.” In the machining industry, this means a loss of “about 20,000 to 25,000 skilled machinists per year…In contrast, only about 8,000 per year receive sufficient machining training in high school, community college and apprentice programs to be considered good recruits.”

In 2011, the U.S. Bureau of Labor statistics estimated that 2.8 million, nearly a quarter of all U.S. manufacturing workers, are 55 or older. While manufacturing has led the United States out of the recession, the improvement has been a mixed blessing because as more skilled workers are needed, the supply is limited because baby boomers are retiring or getting close to retirement. What makes the situation worse is that there are not enough new ones to replace them because the subsequent generations were smaller and fewer chose manufacturing as a career.

The convergence of all of these factors has resulted in an insufficient number of workers trained for advanced manufacturing jobs. It is more of a skills gap in the specific skills needed by today’s manufacturers than a shortage of skilled workers. In the past 15 years, the manufacturing industry has evolved from needing low-skilled production-type assembly workers to being highly technology-infused.

The 2012 ManpowerGroup annual Talent Shortage Survey revealed that 49 percent of U.S. employers are experiencing difficulty filling mission-critical positions within their organizations despite continued high unemployment. According to the more than 1,300 U.S. employers surveyed, the positions that

are most difficult to fill include Skilled Trades, Engineers and IT Staff, all of which have appeared on the U.S. list multiple times since the survey began in 2006.

Jonas Prising, ManpowerGroup president of the Americas, said, “This skills mismatch has major ramifications on employment and business success in the U.S and around the globe. Wise corporate leaders are doing something about it, and we increasingly see that they’re developing workforce strategies and partnerships with local educational institutions to train their next generation of workers.”

Training to Address Skills Shortage:

According to a 2011 U.S. Government Accountability Office study of fiscal year 2009, the federal government had 47 programs run by nine different agencies. The GAO noted that more information is needed to measure the true effectiveness of the programs. “Almost all of the 47 programs tracked multiple outcome measures related to employment and training, and the most frequently tracked outcome measure was ‘entered employment,’ “the agency stated. “ However, little is known about the effectiveness of employment and training programs because, since 2004, only five reported conducting an impact study, and about half of all the remaining programs have not had a performance review of any kind.”

Obviously, we could make government work better and save money in the process by consolidating some of these programs and giving some of the money to the states for programs that work best for their workers. However, it doesn’t necessarily mean programs can be combined. It might not make sense, for example, to combine the “Disabled Veterans’ Outreach Program” with the “Migrant and Seasonal Farmworkers Program,” or the “Native American Employment and Training Program” with the “National Guard Youth Challenge Program.” In addition, the programs are not equal in size or scope. The GAO reported that seven programs accounted for 75 percent of the $18 billion spent on job training, while two programs (“Wagner-Peyser funded Employment Service” and “Workforce Investment Act Adult”) served about 77 percent of all participants.

However, we don’t need to rely solely on government-funded training for manufacturing jobs. A great deal has already been done industry, trade and professional organizations, colleges, and universities to train and retrain today’s workers and prepare the next generation of manufacturing workers.

For example, the National Institute for Metalworking Skills (NIMS) was formed in 1995 by the metalworking trade associations to develop and maintain a globally competitive American workforce. NIMS sets skills standards for the industry, certifies individual skills against the standards, and accredits training programs that meet NIMS quality requirements. NIMS operates under rigorous and highly disciplined processes as the only developer of American National Standards for the nation’s metalworking industry accredited by the American National Standards Institute (ANSI).

NIMS has a stakeholder base of over 6,000 metalworking companies and major trade associations in the industry. The Association for Manufacturing Technology, the American Machine Tool Distributors’ Association, the National Tooling & Machining Association, the Precision Machine Products Association, the Precision Metalforming Association, and the Tooling and Manufacturing Association have invested over $7.5 million in private funds for the development of the NIMS standards and its credentials.  The associations also contribute annually to sustain NIMS operations and are committed to the upgrading and maintenance of the standards.

NIMS has developed skills standards in 24 operational areas covering the breadth of metalworking operations, and there are 52 distinct NIMS skill certifications. The Standards range from entry to a master level. All NIMS standards are industry-written and industry-validated, and are subject to regular, periodic reviews under the procedures accredited and audited by ANSI. NIMS certifies individual skills against the national standards and requires that the candidate meets both performance and theory requirements that are industry-designed and industry-piloted.
NIMS accredits training programs that meet its quality requirements. The NIMS accreditation requirements include an on-site audit and evaluation by a NIMS industry team that reviews and conducts on-site inspections of all aspects of the training programs, including administrative support, curriculum, plant, equipment and tooling, student and trainee progress, industry involvement, instructor qualifications and safety. Officials governing NIMS accredited programs report annually on progress and are subject to re-accreditation on a five-year cycle.

The Society of Manufacturing Engineers (SME), the world’s leading professional society advancing manufacturing knowledge, also provides the following professional certifications:  Manufacturing Technologist, Manufacturing Engineering, Engineering Manager, Lean Certification (Bronze, Silver, and Gold), and Six Sigma. SME’s Certified Manufacturing Technologist program is utilized as an outcome assessment by numerous colleges and universities with Manufacturing, Manufacturing Engineering or Engineering Technology programs.

In 2010, the Society of Manufacturing acquired Tooling University LLC (Tooling U) based in Cleveland, Ohio to provide online, onsite, and webinar training for manufacturing companies and educational institutions. With more than 400 unique titles, Tooling U offers a full range of content to train machine operators, welders, assemblers, inspectors, and maintenance professionals. These classes are delivered through a custom learning management system (LMS), which provides extensive tracking and reporting capabilities. The competencies tie the online curriculum to matching hands-on tasks that put the theory to practice.

The Fabricators and Manufacturers Association, International (FMA) champions the success of the metal processing, forming, and fabricating industry.  FMA educates the industry through the following programs:

FabCast – FMA’s webinar platform utilizes Internet connection and telephone to deliver live, interactive technical education programs directly to manufacturers on such topics as laser cutting, roll forming, metal stamping, etc. Companies can train their whole team at once, even from multiple locations. Companies can break up full days of instruction into modules and spread out over a period of time (i.e. two hours four days a week, four hours once a week for a month, etc.).

FMA also offers on-site, live training conducted at companies on their equipment as well as on-line training (e-Fab) that allows a company to get the training that they need, when they need it. E-Fab courses combine a full day’s worth of instruction by FMA’s leading subject matter experts with the flexibility of online delivery, available 24/7, 365 days a year.

FMA provides a Precision Sheet Metal Operator (PSMO) Certification – the metal fabricating industry’s only comprehensive exam designed to assess a candidate’s knowledge of fundamental precision sheet metal operations. Fabrication processes covered in the exam include shearing, sawing, press brake, turret punch press, laser cutting, and mechanical finishing.

Attracting the Next Generation of Manufacturing Workers:

If we want to attract today’s youth to manufacturing careers, we need to change their perceptions about what the manufacturing industry is like and show them what great career opportunities exist in the industry. We need to expose them to the variety of career opportunities in manufacturing and help them realize that manufacturing careers pay 25-50 percent higher than non-manufacturing jobs, so they will choose to be part of modern manufacturing.

We need to reacquaint youth with the process of designing and building products from an early age and provide them with the opportunities to learn in both traditional and non-traditional ways. Here are some suggestions:

Conduct manufacturing summer camps – In 2011, the Fabricators and Manufacturers Association, International (FMA) Nuts, Bolts and Thingamajigs Foundation (NBT) and the National Association for Community College Entrepreneurship (NACCE) partnered to launch a unique summer camp program called Gadget Camp, where teenagers learn how to build things from concept to creation. Attendees are required to design a product through computer-aided design (CAD) technology and oversee the design to completion. The initial summer camp will eventually develop into a national program with as many as 300 locations across the United States.

Restore shop classes to our high schools – The elimination of these courses from our school systems has inevitably had a negative impact on the way we view making a living with our hands. Project Lead The Way® (PLTW) has been working since 1997 to promote pre-engineering courses for middle and high school students. PLTW forms partnerships with public schools, higher education institutions, and the private sector to increase the quantity and quality of engineers and engineering technologists graduating from our educational system. The PLTW curriculum was first introduced to 12 New York State high schools in the 1997-98 school years, and today, the programs are offered in over 1,300 schools in 45 states and the District of Columbia.

Improve the image of manufacturing careers – The National Tooling and Machining Association (NTMA) is another trade association that has a program to encourage youth to consider manufacturing as a career. NTMA is the Founding Sponsor of an exciting educational program that provides unlimited career awareness experiences in advanced manufacturing technology for students from middle school through college age. The approach has three components: a robotics curriculum based on national standards, teacher training workshops, and competitive events where students showcase their custom-built machines and compete for top honors. NTMA has six active regional leagues in their National Robotics League, a competition of battling robots that generates huge excitement among high school students.

Establish Apprenticeship Programs – In 2011, NIMS launched a new Competency-based Apprenticeship System for the nation’s metalworking industry. Employers are able to customize training to meet their own needs while maintaining the national integrity of apprenticeship training. Developed in partnership with the United States Department of Labor, the new system is the result of two years of work. Over 300 companies participated in the deliberations and design. The new National Guideline Standards for NIMS Competency-based Apprenticeship have been approved by the Department of Labor. NIMS has trained Department of Labor apprenticeship staff at the national and state level in the new system.

Portray manufacturing careers as fun and exciting – the convergence of cloud computing, mobile apps, and gamification within the manufacturing sector is in its infancy. Gamification is the use of game thinking and game mechanics in a non-game context to capitalize on youth’s obsession with video games. The best example is Plantville, a new online gaming platform that simulates the experience of being a plant manager, introduced by Siemens Industry, Inc. in March 2011. Players are faced with the challenge of maintaining the operation of their plant while trying to improve the productivity, efficiency, sustainability and overall health of their facility.

The existing programs described and recommendations outlined in this article are a good start to ensure that we have enough skilled workers for manufacturers to employ as more and more companies return manufacturing to America from outsourcing offshore and replace the “baby boomers” as they retire over the next 20 years.

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Indiana Manufacturers Have Weathered the Storm of the Great Recession

Tuesday, December 18th, 2012

According to results of the 2012 Indiana Manufacturing Survey: “Halftime” for Indiana Manufacturing, Indiana manufacturers have weathered the storm of the Great Recession and are well positioned to compete in the future., The report, commissioned by Katz, Sapper & Miller certified public accounting firm, was conducted by Scott A. Brown, Partner, Katz, Sapper & Miller, LLP in conjunction with Mark Frohlich, associate professor of operations management and Steven Jones, associate professor of finance  on the faculty of the Kelley School of Business Indianapolis, Indiana University.

This report has tracked Indiana manufacturing for six years, from the end of the economic boom through the Great Recession to the present. The authors “view the past year as a ‘halftime’ break for Indiana manufacturing after what proved to be an incredibly difficult first half.”

The vast majority of companies surveyed (82%) responded at the company level, while 10% are individual plants and 7% are divisions of larger organizations. Privately owned companies represent 87% of respondents and the other 13% are publicly traded companies. The average number of employees is 306, and the largest organization has 8,000 employees.

About 40% of companies rely on job shop-type production, and 41% use batch manufacturing. Very few companies operate assembly lines (8%) or continuous flow processes (11%), both of which are capital intensive and used to produce relatively standardized, high-volume items.

The three largest industry groups represented are industrial equipment (19%), automotive (19%), and aerospace and defense (10%). Another 18% of respondents are almost evenly distributed between high-tech (5%), healthcare (6%), and furniture/home goods (7%).

In the past four years since the financial crisis of late 2008, “manufacturers have faced challenges ranging from credit crunches and supplier bankruptcies to slumping consumer demand, soaring energy costs, and relentless foreign competition.” The report chronicles that “in 2008-09, Indiana manufacturers were mainly focused on cost-cutting and economic survival. By 2010-11, targeted investments aimed at growth began to reappear on the agendas of many manufacturers.” Now, four years later, “a significant majority now report that their business is either ‘healthy’ or ‘stable,’ with tougher times behind them” and “investment for growth is a priority for many companies around the state,” while “almost three out of every four manufacturers surveyed are investing for growth.”

“From a financial perspective, I think it small- to medium-sized manufacturers have made it through the Great Recession, and they’re starting to recover,” said Jones. “That is revealed in the survey responses indicating there’s less concern about working capital management and renewed focus on investment strategy, rather than cost cutting.”

“One in 10 companies surveyed plan to open new manufacturing facilities in Indiana over the next two years, and 44 percent rate their financial performance as “healthy,” a significant increase from last year’s response of 30 percent.”

The survey did find that net profit margins increased more for firms that introduced new products sometime in the two years prior. In the 2012 survey findings, the companies introducing new products increased to 44% (up from 38% in 2011), and they saw a 24% improvement in net profit margin (down from 26% in 2011.

According to survey 2012 survey results, business strategies have changed from 2011. In 2011, “the two most important underlying dimensions were superior product design and fast and reliable delivery along with superior customer service.” In 2012, “superior quality and lower selling prices have emerged as the two most important underlying dimensions on which manufacturers are differentiating their businesses.”

The authors “research reveals three key ways strategies are shifting as we move beyond the Great Recession toward a new era that is likely to be even more competitive:”

  1. Keep focused on the customer – strategies increasingly feature superior quality and lower prices, along with superior product design and customer service.
  2. Don’t underestimate the importance of technology – leading-edge technologies are playing a critical role in advancing these companies in conjunction with process improvement programs such as Lean and Six Sigma, advanced automation, and smart manufacturing technologies.
  3. Collaboration remains critical – partnerships and collaboration with up- and downstream customers and suppliers in the supply chain

Frohlich and Jones recommend, “Indiana manufacturing companies stay focused on the customer, avoid underestimating the importance of technology and know that collaboration remains critical.”

“These results indicate a reason to be optimistic about the manufacturing sector and jobs investment in the State of Indiana,” said Jones.

A slightly higher percentage of companies are “on-shoring” (aka “reshoring”) manufacturing back into the United States. When asked if they expect to relocate or onshore any manufacturing back to the United States during 2012-13, or alternatively, do they plan on relocating, or offshoring, any production outside the United States during 2012-2013, 9% indicated they intend to onshore and 8% intend to offshore. The top four reasons why companies are “reshoring” were:  better control over production (60%), proximity to customers and main markets (50%), closer to key suppliers (40%), and reduce total “landed” costs; i.e., customs/duties, transportation, warehousing, etch (40%). The main reasons for offshoring manufacturing out of the United States are:  lower offshore labor costs and proximity to customers in new markets.

“What now are recognized as systematic errors in offshoring over the past 10-15 years were a lot of mistakes based on myopic financial decision making,” said Jones. “Firms made offshoring decisions assuming exchange rates wouldn’t change, which is wholly unrealistic in currency markets. Many made these financial decisions using only the data in front of them. Additionally, the real cost of labor has gone up in China. All of this represents what, in retrospect, may be an excessive amount of offshoring in the previous decade.”

The survey revealed that the main reasons for Indiana’s competitive edge include:

  • Better access to new technologies
  • Better control over production
  • Locations closer to customers, markets and suppliers
  • Great accounting and auditing oversight

The report states, “The major remaining concern for the state is having a trained workforce that is qualified to pursue advanced manufacturing strategies.”

“These results clearly indicate a growing concern about access to an adequately trained Hoosier workforce, more so than in past years,” the report reads. “Consistent with the previous results indicating growing concerns about worker training, only 30 percent of respondents view Indiana’s workforce as a competitive advantage for the state.”

The authors conclude that “While Indiana’s manufacturers still face strong global competition, their practices and products are beginning to permeate all elements of operations; opening up new markets and sources of demand; driving innovation; and even changing industry cost structures.”

This report shows where Indiana’s manufacturers are right now, but the question is what to do next? The report indicates “a strong sense among Indiana’s manufacturers that execution is now the challenge to bringing about the new era of manufacturing. Confidence among business leaders about their progress toward this new era is strong, and their companies are taking concrete steps towards improving manufacturing…While today’s business environment provides a multitude of new challenges to manage, it also offers significant opportunities for those who can master its dynamics.”

The survey found that a new manufacturing era is on the horizon, and “there is widespread agreement about what the next era of manufacturing will look like. It is one where manufacturing is not only a separate strategic initiative, but also something fully integrated into the strategy and operations of a company. For example, manufacturers will need to develop a broader sense of what value creation means to customers as a whole.”

The underlying tone in this year’s report is that “the next five years could well determine not only the fate of some firms, but also, in significant ways, the success of Indiana and that of our country in the global economy for years to come…Manufacturing can and should continue to thrive if the right policies and strategies are pursued. Real and fundamental changes are continuing to take place across manufacturing in all kinds of capabilities.”

The authors conclude that “the message is clear: Indiana (and American) manufacturing has survived a tough first half. Now it must move forward to remain competitive in the future.”

This report is another example of how American manufacturers can survive and even grow and prosper in the face of global competition. The companies doing the best have implemented many of the recommendations contained in the chapter ? “What can manufacturers do to save themselves? ? in my book, Can American Manufacturing be Saved? Why we should and how we can. Innovative new products, fast, reliable delivery, superior customer service in conjunction with applying the principles and tools of Lean and Six Sigma are a few of the suggestions from this chapter. I encourage everyone to read the new 2012 edition of my book to find out what you can do as a manufacturer to grow and succeed, what national policies need to be changed and implemented to foster success of this critical sector of our economy, and what you can do as an individual to save American manufacturing.

 

 

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“What does the economy have to do with national security?”

Tuesday, March 20th, 2012

Most people in the United States would define national security as military readiness, homeland defense, and generally protecting American interests at home and abroad.  They don’t recognize that the economy has an effect on our national security.  This is the main purpose of the book “Economic Security:  Neglected Dimension of National Security?” edited by Dr. Sheila Ronis for the Center for Strategic Conferencing, Institute for National Strategic Studies and published by the National Defense University Press in the fall of  2011.

Other questions she considered are:  “But how does the United States remain strong? What does that mean in a world of globalization? How do we even define what national security is in such a complex and interdependent world?  Can we survive, let alone remain a superpower, if we no longer control any means of production?  If we remain a major debtor nation?  If we continue our dependence on unstable countries for our energy supplies?  If we invest insufficient amounts of our resources in research and development, science and technology?  Or if we perceive the training and education of people as a cost as opposed to an investment?”

This report was the result of a conference held on August 24–25, 2010, by the National Defense University.  The conference explored the economic element of national power.  Over two days, several keynote speakers and participants in six panel discussions explored the complexity of this subject and examined the major elements that define the economic component of national security.

The panels and keynote presentations looked at the economic element of national power from different system views, including the role of debt, the government, industrial capability, energy, science, technology, and human capital—create a systemic view of what could be done to improve an understanding of the economic element of national power. Selected papers from the conference that represent these views comprise this volume, edited by Dr. Sheila Ronis, Director of the Master of Business Administration/Master of Management Programs at Walsh College and President of The University Group, Inc., a management consulting firm and think tank specializing in strategic management, visioning, national security, and public policy.  Dr. Ronis has chaired the Vision Working Group of the Project on National Security Reform (PNSR) in Washington, DC, which has been tasked by Congress to rewrite the National Security Act of 1947. As a Distinguished Fellow at PNSR, Dr. Ronis is responsible for the plan and processes to develop the Center for Strategic Analysis and Assessment, to provide the mechanism to conduct foresight studies and the development of the grand strategies that would follow—the kind of studies that would look at an entire system, such as the economy and its relationship to national security.

Dr. Ronis begins with a definition of national security that “can include anything that adds to the strength of the Nation,” such as “the strength of our nation’s infrastructure, our strong societal and moral codes, the rule of law, stable government, social, political, and economic institutions, and leadership.”  It also includes “our nation’s schools and educational programs to ensure a knowledgeable citizenry and lifelong learning—a must for a democracy.”  Then, it also “requires investments in science, engineering, research and development, and technological leadership. We cannot be strong without a viable way to power our cities, feed ourselves, and move from one place to another. Most of all, a strong economy is an essential ingredient of a global superpower.”  Without a strong market-based economy we would quickly lose our superpower status.  We need to have a strong base of globally competitive products and services that produce jobs. The “economy must include sound government policies to promote responsible choices and reduce our debt, and grand strategies for energy and environmental sustainability, science and technology leadership (at least in some areas), human capital capabilities, manufacturing, and the industrial base.”   “And…National security goes to the very core of how we define who we are as a people and a free society. It concerns how we view our world responsibilities.”

Dr. Ronis states that there can be no question of the need to include the economic viability of our nation as a major element of national security because “without capital, there is no business; without business, there is no profit; without profit, there are no jobs.  And without jobs, there are no taxes, and there is no military capability.  The viability of a nation’s industrial infrastructure, which provides jobs for its people, creates and distributes wealth, and leverages profits, is essential. Without jobs, the quality of peoples’ lives deteriorates to a point where society itself can disintegrate.”

Chapter one is a transcript of the comments made by opening keynote speaker David Walker, U. S. Comptroller General and head of the Government Accountability Office (GAO) from 1998 to 2008, and  Founder and CEO of the Comeback America Initiative.  When he started at the GAO, it didn’t have “a strategic, integrated, forward-looking, and outcome-based strategic plan.”  They put such a plan in place at GAO during his tenure, and he said, “It is the closest thing that exists to a strategic plan for the Federal Government, but the GAO is in the legislative branch. So we need one for the executive branch. It needs to be led by the OMB (Office of Management and Budget), and hopefully, eventually it will be.”

He stated, “Things like savings, critical infrastructure, investments in basic research, educational outcomes, and healthcare outcomes are key leading indicators, and in all of these areas, we are below average for an industrialized nation.”  He contends that if the economic element of national power is neglected and misunderstood, nothing will be more dangerous to the Nation than the national debt and its unintended consequences for generations to come.  Last year government represented 25 percent of the economy, above the recent average of 21 percent. “But if we do not reform our existing entitlement programs and other aspects of government, it will represent about 40 percent of the economy by 2040, and that does not count state and local governments.”

He stated that the composition of the budget has changed dramatically in the last four decades.  “Forty years ago, it was dominated by defense at 42 percent.  Today, it is dominated by social insurance programs, which grow faster than inflation and grow faster than the economy even when the economy is growing. Forty years ago, when Congress came to town, they got to decide how 62 percent of the budget would be spent, of which today defense is about half of the discretionary budget.  Now they decide how about 38 percent gets spent, and if we continue on our status quo, do nothing, let-it-ride policy, it will go down to 18 percent by 2040.  This obviously is an imprudent and unsustainable course.”  He points out that if you count our unfunded Social Security and Medicare debt, our total debt is $62 trillion, not the $14 trillion we hear about.  He states that if the total debt is taken into consideration, we are worse off than Spain,    and only three years away from becoming like Greece.  His arguments are alarming and are critical for policymakers and every citizen to understand.   In conclusion, he provides a common-sense approach to making the tough choices and changes we need to make before it’s too late to get our financial house in order.

In chapter two, John Morton traces the historical roots of the economy and its role in enabling the superpower status of the Nation.  Mr. Morton is a Distinguished Fellow and the Homeland Security Lead for the Project on National Security Reform. He is also the Strategic Advisor to DomesticPreparedness.com and a consultant to Gryphon Technologies. He states, “Today, America sustains that position primarily through two elements of its national power: its peerless military and its dollar currency, upon which the international monetary and economic system is largely based. A third element initially enabled that hegemony in the 1940s: the national economy—that is, the Nation’s industrial might. Much of that element is no longer present today.”  He presents a brilliant analysis of how American industry was the foundation of America’s becoming a superpower from the Civil War to the present day and how the alliance of government, science, industry, academe, and the military forged the national security establishment, later called the defense industrial base.  He proposes that the United States needs an economic grand strategy in order to continue America’s role in the world, which is based on its military and economic prowess and capability.

In chapter three, Keith Cooley explains his approach to an energy plan, which includes a grand strategy that, if enacted, will support the Nation’s future.  Mr. Cooley is Chief Executive Officer (CEO) of the advisory firm Principia, LLC.  He previously was President and CEO of NextEnergy, an accelerator for alternative energy businesses and technologies. He paraphrases the International Energy Association definition of energy security as simply “the assurance of the uninterrupted supply of energy at an affordable price, while respecting environmental concerns.” His chapter addresses the notion of energy security as national security from four points of view that are, in his opinion, strategic priorities:

  • Priority 1: creating strong civic, business, and political leadership to quickly implement needed changes that assure energy and national security for this country.
  • Priority 2: developing and sustaining an alternative energy capability
  • Priority 3: migrating to alternative (sometimes called “clean”) energy sources
  • Priority 4: widespread increased dependence on domestic energy efficiency

He states, that “no 21st-century economy can be secured without a steady supply of energy. Without adequate energy to power contemporary civilization, there is no security at all.”  He concludes by urging “action on energy security issues at the highest levels of government, industry, and civic engagement. We have many examples to draw lessons from both here and abroad that can inform our actions. But we must act; we must engage. It is the only path available for our survival.”

In chapter four, Louis Infante offers his approach to energy security.  Mr. Infante is the Executive Director, Government and Military, for Ricardo, Inc., an independent automotive engineering consulting company, where he is responsible for strategy development and enactment in the military and government markets.  He advocates a National Energy Security Initiative administered by the Department of Energy (DOE) and joined by every government department with responsibilities that will be affected by energy—in essence, practically all departments.”  He describes a specific model that the U. S. could use to manage the complexities of its entire energy system. “This initiative would include mechanisms to improve the research and development policymaking decisions and strategies to make them real.”  He recommends that “U.S. leadership must overcome barriers to establishment of a national policy on energy that prescribes an endgame and the plan to achieve it.”  He concludes that “the National Energy Security Initiative will provide the coordinating efforts in planning and technology R&D that can assure success in the redevelopment of the U.S. energy system. And it can start within DOD as a first application of success.”

In chapter five, Myra Howze Shiplett, Wendy Russell, Anne M. Khademian, and Lenora Peters Gant address the complex set of issues of whether a nation can be an economic or military superpower without a plan to ensure it has people with the right knowledge and capabilities throughout its society.  They point out, “In 2010, America was “ranked 12th in the number of 24- to 35-year-olds with college degrees . . . among 36 developed nations” compared to “sixth in post-secondary educational attainment in the world among 25- to 60-year-olds.” Also, a major problem is that “Nationwide, only about 70 percent of students earn their high school diplomas” with lower rates for minority students ? “only 57.8 percent of Hispanic, 53.4 percent of African American, and 49.3 percent of American Indian and Alaska Native students.”  They discuss the five steps needed for the “Architecture of the High School Educational Future” and a new kind of graduate education that will produce “practitioners/scholars” with the skill sets needed for public service.  They conclude that “A vibrant, growing economy that provides jobs for America’s citizens is an essential component of our national security. A critical success factor for such an economy is a well-educated workforce, equipped to deal with the complexities of the 21st century…The security of our nation demands this commitment.”

In chapter six, Carmen Medina explores the many issues that surround what it means to have innovation as a major element of a nation’s economy.  Carmen Medina retired from the Central Intelligence Agency (CIA) in February 2010 after over 30 years of service. Her last assignment was as Director of the Center for the Study of Intelligence (CSI), where she developed and managed CIA’s first agency-wide Lessons Learned Program. First, she explores some definitions of innovation: “technology-based that leads to new industries”, as opposed to “social innovation, which refers to changes in the way people behave,” as well as agricultural innovation, “defined as the application of knowledge of all types to achieve desired social and economic outcomes.”  She states that “The capacity for innovation has been the primary catalyst of U.S. economic growth. Indeed, capitalism essentially is built on innovation and the concept of creative destruction. Going forward, innovation will be even more critical to U.S. economic prosperity.”

She identifies a problem, stating “There is, however, no doubt that the U.S. capacity for innovation has declined in relative and absolute terms over the last 20 years or so.  Our standing has consistently declined.”  In addition, “the emergence of the BRIC economies—those of Brazil, Russia, India, and China—will fundamentally alter the world economic map by 2020.”  The conclusion of this chapter is that “It is probably impossible for the United States to have a robust economy and remain a superpower if its companies lose their ability to be innovative.

Very often, important White Papers, reports, and books are ignored by the mass news media, but this is one book that every elected official from the president down to local legislators should read.  The current situation is alarming, and we have a limited amount of time to address these issues if we want to stop our slide into becoming a third-world nation.  Manufacturing, innovation, energy security, and an educated citizenry are necessary to maintain freedom as a democratic republic.   As the report concludes, “To be successful in addressing a complex system, we need to integrate all major elements of national power: diplomatic, informational, military, economic, and so on… The entire world expects the United States to remain a leader. We cannot do this unless we are strong. And we cannot be strong unless we plan for and shape our future as a Nation with a sound economy.”

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Will the AME, NAM and NACFAM Alliance Revitalize Manufacturing?

Tuesday, March 6th, 2012

The Association for Manufacturing Excellence (AME) is joining with leading organizations, such as the National Association of Manufacturers (NAM), and the National Council For Advanced Manufacturing (NACFAM) to form an alliance to revitalize manufacturing and grow the economy, while improving the standard of living of all citizens in North America.  These organizations are inviting public and private sectors to come together to build on the NAM study, A Manufacturing Renaissance: Four Goals for Economic Growth.

The AME white paper “Challenges Facing the Manufacturing Industry…” states “The strategy calls for putting people, schools, businesses and the government to work; producing literate career-ready citizens capable of joining the workforce; and enabling manufacturers to once again lead the designing, building and exporting of quality products and services around the globe.” The top three priorities are:

  • Build a better educated and trained workforce
  • Promote product and process innovation, as well as research and development
  • Improve global competitiveness for companies

AME advocates that each priority “must be considered in developing public policies that support the revitalization of the manufacturing sector, and policy-makers must consider these elements in shaping future public policy and legislation.”   The goal is to help companies and our education systems transform themselves by using more innovative processes to become more competitive to put people back to work in making things in America.

I  strongly agree with AME’s viewpoint that we need to revitalize American manufacturing because “manufacturing is very critical to economic growth, prosperity and a higher standard of living.”  This is because manufacturing jobs have a multiplier effect-? every manufacturing job creates three to four other jobs.  Manufacturing creates more wealth than any other sector in the economy.  “Manufacturing pays higher wages and provides greater benefits, on average, than other industries. It performs almost two-thirds of private sector research and development, creates the highest number of jobs to support the industry while serving the surrounding communities, and contributes to more than 50 percent of the country’s total exports.”

The White Paper notes that we’ve lost nearly six million manufacturing jobs in the United States since January 2000, for an average of about 54,000 per month, according to the Bureau of Labor Statistics.  We also lost 56,190 manufacturing facilities from 2001 to 2010, or about 15 per day.

AME has issued a call for action to policy-makers, industry professionals and academic leaders to play critical roles in revitalizing the economy through the rebirth of manufacturing jobs.  To do this, we need to ensure the supply of educated citizens, necessary physical infrastructure, and a favorable tax and regulatory framework that fosters increased collaboration between public and private sector partners.

AME has been leading the “Revitalization of Manufacturing” initiative, wherein AME and their allied organizations have been reaching out to policy-makers nationwide, and encouraging them to join or develop efforts focusing on local and state job creation.  AME states that “itt is imperative that policy-makers recognize the importance of an industry that has been the backbone of the North American economy.  To date, AME has received more than 400 signatures of support from state and federal policy-makers, industry trade associations and operations executives representing manufacturers across North America.”

AME advocates “a renewed emphasis on making businesses more competitive by developing the educational and training infrastructure to produce qualified individuals to fill these new opportunities.”   To accomplish these initiatives, AME is joining with leading organizations to adopt the three priorities by:

Reforming public education to produce career ready citizens – Parents, teachers and business leaders need to recognize that other nations are both out-educating us and out-competing us.  Some of the ongoing initiatives by manufacturing organizations to help reform public education are:

  • The Manufacturing Institute’s Roadmap to Education Reform for Manufacturing, a comprehensive blueprint for education reform
  • American Productivity and Quality Center’s (APQC) Education North Star program that helps school districts do more with less by transforming education through process and performance management
  • Career Pathways,  a program that encourages students to consider a career in manufacturing and help prepare them by using the Manufacturing Pathway Map

Last fall, I wrote about a number of programs sponsored by other organizations to interest and prepare youth for careers in manufacturing in the article, “How Can we Attract Youth to Manufacturing Careers?”

Establishing consortiums of like-minded individuals with the same mission to help sustain and grow businesses through sharing technology and innovative ideas.  AME recommends that businesses “grow a culture that achieves results through engaging their people” to “develop pragmatic, working-level leaders who can pull it all together.”  In addition, businesses “need to foster rapid advancement of technology and innovation by establishing regional consortiums to help bring jobs back home.”

“AME Northern Kentucky/Cincinnati Consortium is the first building block of the AME Consortia network, and the organizations plans to deploy at least 10 more in 2012.  AME also has alliance partners, like the Virginia Business Excellence Consortium.”

Reshoring by making better informed business decisions  to keep and bring jobs back home – the Reshoring Initiative was founded by Harry Moser in 2010.  He is collaborating with AME to promote reshoring as part of the “Revitalization of Manufacturing” initiative.  AME recommends that companies use the Total Cost of Ownership (TCO) analysis tool Mr. Moser developed “to effectively compare total cost of local and offshore sources, enabling them to make informed business decisions. ‘We are committed to changing the sourcing paradigm from ‘off-shored is cheaper’ to ‘local reduces the total cost of ownership,’ said Moser.”

Redeploying Training Within Industry (TWI) programs to train or retrain workers to have the skills to work in advanced manufacturing jobs to revitalize manufacturing and re-energize the economy.  First created during WWII to replace workers who left the factories and went off to war, the TWI programs were revived in 2001 by the Central New York Technology Development Organization, a member of the U.S. Manufacturers Extension Partnership (MEP), after which the TWI Institute was formed to oversee the global deployment of the program.

AME’s White Paper only identifies the TWI programs, but I wrote about training programs sponsored by other organizations, such as the Society of Manufacturing Engineers’ Tooling U and The Fabricators and Manufacturers Association, International in my article, ”What’s Being Done to Address the Lack of Skilled Workers?

In order to be more globally competitive, AME recommends that companies use Lean Certification, an internationally recognized certification process developed by the Society of Manufacturing Engineers (SME), AME, Shingo Prize, and the American Society for Quality (ASQ), which establishes the standard for continuous improvement and Lean practices.

The White Paper states that at its 2012 national board meeting, “AME reaffirmed its commitment to helping small-and medium-sized businesses create more manufacturing jobs, and the organization’s strategic plans address the challenges facing manufacturing by formulating counter-measurements to address them with its public and private alliance partners.”

In conclusion, the White Paper states, …the public and private sectors must come together to build an integrated plan supportive of these initiatives, especially NAM’s Manufacturing Strategy for Jobs and Competitiveness and Roadmap to Education Reform for Manufacturing; the LEARN Act; and the Reshoring Initiative.  These will ultimately revitalize the industry and grow the economy.”

I have repeatedly said in my book and blog articles that it will take the efforts of the public and private sectors, as well as individual Americans, to first save and then revitalize American manufacturing.  I agree that these strategies will be beneficial, but they will not be enough to accomplish this goal.   First of all, I do not agree that the challenges to accomplish this goal are the “four major challenges on which its future depends and has been failing to meet… globalization, the revolution in information technology, the nation’s chronic deficits and its pattern of energy consumption” that are quoted from Thomas L. Friedman and Michael Mandelbaum’s book, That Used to Be Us, How America Fell Behind in the World It Invented and How We Can Come Back.

These are all realities that must be addressed, but they are not the main challenges that face America’s manufacturing industry.  The main challenge can be summed up in one word:  China.  By this I mean China’s predatory mercantilism in the form of currency manipulation, export subsidies, theft of intellectual property, product “dumping,” export restrictions on raw materials, and more recently, technology transfer and rare earth hoarding.

As long as companies that are members of AME, NAM, and NACFAM, such as Westinghouse, General Electric, and Caterpillar, choose to close factories in the United States to offshore manufacturing to China for the illusion of selling to the 1.3 billion Chinese consumers, we will continue to lose manufacturing jobs.

As long as these organizations and their member companies advocate so-called free trade policies and are afraid to stand up to China’s predatory mercantilism and urge our elected officials to demand that China adhere to the terms of its admission into the World Trade Organization, our huge trade deficits will continue to escalate.

These companies must stop being Chinese apologists and appeasers just to add more profit to their bottom line.  They need to realize that complying with China’s demand for technology transfer in order to build or establish a plant in China is destroying the future of their own companies.

Now is the time for action.  The best thing that AME, NAM and NACFAM members could do is to take a pledge to not close any more plants in the U. S. to set up manufacturing in China.  Then, we would really be able to revitalize American Manufacturing.

 

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Why We Don’t Need a New Program to Train America’s Manufacturing Workers

Tuesday, January 31st, 2012

In his State of Union address, President Obama placed American manufacturing at the center of a “blueprint” for bringing back jobs and strengthening our economy.  After years of being one of the “voices in the wilderness” urging our elected leaders to “save American manufacturing,” it was gratifying to hear manufacturing being given such prominence.

I am concerned, though, that his idea of “one program, one website, and one place to go for all the information and help” American workers need for training or retraining for jobs would result in more government control and more deficit funding, adding to the burden of debt for American taxpayers.  We don’t need to wait for government to come up with a new program and spend taxpayer dollars developing new curricula for training for manufacturing jobs.   We don’t need to wash years of work and collaborations between industry, trade and professional organizations, colleges, and universities down the drain.  A great deal has already been done and is being done to train and retrain today’s workers and prepare the next generation of manufacturing workers.

When considering training, we need to understand the difference between certification versus a certificate.  Certificate programs are training based on proprietary criteria/curriculum and sometimes include an exam without any recertification requirements. Numerous training companies, educational institutions, and individual training consultants compete to sell training courses that purportedly include “certification.”  In many cases, these are not based on a standard body of knowledge as developed by objective third-party entities, but rather paper certificates awarded for specific training.  Certificate programs are useful to prepare workers for entry-level positions in many industries.

Certifications are based upon profession and competency.  Certifications are independent, third-party assessments of knowledge, skills, and experience based upon a known publicly available standard overseen by industry.  The exam includes legally defensible content and can be referenced back to widely available industry accepted references.  Recertification is a key component and ensures individuals show evidence of continued learning.  Professional certification is a designation earned by a person to assure they meet the minimum knowledge requirements of the profession and is transferable from state to state and company to company.

For example, the National Institute for Metalworking Skills (NIMS) was formed in 1995 by the metalworking trade associations to develop and maintain a globally competitive American workforce.  NIMS sets skills standards for the industry, certifies individual skills against the standards, and accredits training programs that meet NIMS quality requirements.   NIMS operates under rigorous and highly disciplined processes as the only developer of American National Standards for the nation’s metalworking industry accredited by the American National Standards Institute (ANSI).

NIMS has a stakeholder base of over 6,000 metalworking companies. The major trade associations in the industry- the Association for Manufacturing Technology, the American Machine Tool Distributors’ Association, the National Tooling & Machining Association, the Precision Machine Products Association, the Precision Metalforming Association, and the Tooling and Manufacturing Association have invested over $7.5 million in private funds for the development of the NIMS standards and its credentials.  The associations also contribute annually to sustain NIMS operations and are committed to the upgrading and maintenance of the standards.

NIMS has developed skills standards in 24 operational areas covering the breadth of metalworking operations including metalforming (Stamping, Press Brake, Roll Forming, Laser Cutting) and machining ( Machining, Tool and Die Making, Mold Making, Screw Machining, Machine Building and Machine Maintenance, Service and Repair). The Standards range from entry (Level I) to a master level (Level III).  All NIMS standards are industry-written and industry-validated, and are subject to regular, periodic reviews under the procedures accredited and audited by ANSI.

NIMS certifies individual skills against the national standards.  The NIMS credentialing program requires that the candidate meet both performance and theory requirements.  Both the performance and knowledge examinations are industry-designed and industry-piloted. There are 52 distinct NIMS skill certifications.  Industry uses the credentials to recruit, hire, place and promote individual workers.  Training programs use the credentials as performance measures of attainment, often incorporating the credentials as completion requirements and as the basis for articulation among training programs.

NIMS accredits training programs that meet its quality requirements.  The NIMS accreditation requirements include an on-site audit and evaluation by a NIMS industry team that reviews and conducts on-site inspections of all aspects of the training programs, including administrative support, curriculum, plant, equipment and tooling, student and trainee progress, industry involvement, instructor qualifications and safety.   Officials governing NIMS accredited programs report annually on progress and are subject to re-accreditation on a five year cycle.
NIMS has launched a new Competency-based Apprenticeship System for the nation’s metalworking industry.  The NIMS system represents a dramatic departure from the time based system and integrates the NIMS national standards and skill certifications in defining and measuring required competencies.

Developed in partnership with the United States Department of Labor, the new system is the result of two years of work.  Over 300 companies participated in the deliberations and design.   The new National Guideline Standards for NIMS Competency-based Apprenticeship have been approved by the Department of Labor.  NIMS has trained Department of Labor apprenticeship staff at the national and state level in the new system.

Another professional organization that provides certification is the Society of Manufacturing Engineers (SME), the world’s leading professional society advancing manufacturing knowledge and influencing more than half a million manufacturing practitioners annually.  Through its local chapters, technical communities, publications, expositions, and professional development resources, SME promotes an increased awareness of manufacturing engineering and keeps manufacturing professionals up to date on leading trends and technologies.  SME provides the following professional certifications:  Manufacturing Technologist, Manufacturing Engineering, Engineering Manager, Lean Certification (Bronze, Silver, and Gold), and Six Sigma.

SME’s Certified Manufacturing Technologist program is utilized as an outcome assessment by numerous colleges and universities with Manufacturing, Manufacturing Engineering or Engineering Technology programs.  Students who successfully earn the certification demonstrate broad knowledge and its application as related to the fundamentals of manufacturing, which sets them apart from other potential job candidates.In addition, the SME Education Foundation has the mission to prepare the next generation of manufacturing engineers and technologists through outreach programs to encourage students to study Science, Technology, Engineering, and Mathematics (STEM) as well as Computer Integrated Manufacturing (CIM) education.  Over its 30-year history, SME has invested $17.3 million in grants to 35 colleges and universities to develop industry-driven curricula.

In 2010, the Society of Manufacturing acquired Tooling University LLC (Tooling U) based in Cleveland, Ohio to provide online, onsite, and webinar training for manufacturing companies and educational institutions. With more than 400 unique titles, Tooling U offers a full range of content to train machine operators, welders, assemblers, inspectors, and maintenance professionals.  These classes are delivered through a custom learning management system (LMS), which provides extensive tracking and reporting capabilities. The competencies tie the online curriculum to matching hands-on tasks that put the theory to practice.

The Fabricators and Manufacturers Association, International (FMA) champions the success of the metal processing, forming, and fabricating industry.  FMA educates the industry through the following programs:

FabCast – FMA’s webinar platform utilizes Internet connection and telephone to deliver live, interactive technical education programs directly to manufacturers on such topics as laser cutting, roll forming, metal stamping, etc.  Companies can train their whole team at once, even from multiple locations.  Companies can break up full days of instruction into modules and spread out over a period of time (i.e. two hours four days a week, four hours once a week for a month, etc.).

Precision Sheet Metal Operator (PSMO) Certification – FMA’s PSMO Certification is the metal fabricating industry’s only comprehensive exam designed to assess a candidate’s knowledge of fundamental precision sheet metal operations.  Fabrication processes covered in the exam include shearing, sawing, press brake, turret punch press, laser cutting, and mechanical finishing.

FMA offers on-site, live training conducted at companies on their equipment as well as on-line training (e-Fab) that allows a company to get the training that they need, when they need it.  E-Fab courses combine a full day’s worth of instruction by FMA’s leading subject matter experts with the flexibility of online delivery, available 24/7, 365 days a year.

Finally, there is ASQ, which is a global community of people passionate about quality who use the tools, the ideas, and their expertise to make the world work better.  ASQ certification is a formal recognition that an individual has demonstrated a proficiency within, and comprehension of, a specific body of knowledge.  ASQ certification crosses industry lines, ranging from Biomedical Auditor, Quality Technician, Inspector, and Engineer, Reliability Engineer, Six Sigma Black Belt to Software Quality Engineer.  Nearly 150,000 certifications have been issued to dedicated professionals worldwide.

Training and retraining workers who are unemployed or underemployed are critical for the health and growth of the manufacturing industry, which will create good-paying jobs.  The focus of a one-stop website for employment should be to distribute the training and certifications provided by the above-listed organizations at the national level down to the local level.

 

 

 

 

 

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