Welcome to the premiere issue of The MAC Action Newsline, the newsletter that covers the business of manufacturing in Massachusetts. Running a manufacturing business requires attention to countless details. But to compete in this new, global economy, you must pay attention to the entire business process — from front office marketing and accounting, to back end inventory management. This newsline from The Manufacturing Advancement Center is here to guide you in your quest for continuous improvement…throughout the enterprise.

So let’s start off with some big news. The US Department of Commerce has released an important new report, Manufacturing in America: A Comprehensive Strategy to Address the Challenges to US Manufacturers . In the works for nearly a year, this is the first serious attempt by the federal government to deal with issues surrounding manufacturing.

We all know manufacturing is important to the US, currently accounting for 14% of US GDP and 11% of total US employment. In fact, if the US manufacturing sector stood on its own it would represent the 5^th largest economy in the world, larger than China’s economy as a whole. Now the US government is finally sitting up and taking notice.

According to US Security of Commerce, Donald Evans, “America’s manufacturers provide our nation and our people with good jobs, a better quality of life, and inventions that have established our national identity. Our goal is to help the American manufacturers compete and win in the 21^st century.”

The report is organized into three sections: an overview of the domestic and international economic issues facing American manufacturers, a summary of a series of roundtables the government held with manufacturers around the country, and a set of recommendations to address the challenges identified.

While the recommendations are good, such as lowering healthcare costs and decreasing the lawsuit burden on the US economy, these are long-term efforts. They won’t help us immediately recoup the loss of manufacturing jobs we’ve seen over the past few years. 

In fact, on the same day as the report was issued, Frigidaire, the largest employer in Greenville, Michigan, announced that it will be closing its facility that employs 2500 and moving to Mexico. Many large manufacturers have bought into the offshore business model, even though the cost savings are not materializing to the extent expected. Inefficiencies in foreign infrastructures, increased cost of shipping, and a greater need to educate the local workforce have kept the offshore model from fulfilling its promises for many who have tried.

To keep the US competitive, we need to maintain a solid manufacturing base – for the innovation it brings and for the widespread effect it has on our entire economy, including the service sector. While our government believes that the outsourcing of service sector jobs is good for our economy, they are having second thoughts about manufacturing jobs. More attention must be paid to the challenges faced by US manufacturers, large and small, both at the state level as well as the federal.

The good news is that the federal government has now recognized the difference between large and small manufacturing businesses. This report validates the workings of the Manufacturing Extension Partnerships and recommits the government to supporting its work with small manufacturers. According to the report, MEP clients showed 3.4 – 16% more growth in productivity over a five year period than similar non-client firms. More than 1500 firms have benefited thus far, to the tune of over $480 million in additional value-add at the firms.

So what can you do now while you’re waiting for healthcare costs to come down and for free, open, and fair trade to become an international standard? There are three major and immediate opportunities for manufacturers:

1. Get LEAN. As reported above, MEP clients show more growth in labor and productivity across industries and markets. Now is the time to implement lean manufacturing practices so you can show the same gains. Stonebridge Corp. implemented a lean quality management system and is now ISO compliant. They report increased morale, better communication and teamwork, increased sales, and lower plant and equipment costs.
2. Invest in technology. The plastics industry is the only industry to show 25 years of continuous growth. The reason? Investment in technology has led to significant innovations. Just ask Miniature Tool and Die in Charlton. As a result of their commitment to technology, they can now make multiple medical parts from a single, small pellet of plastic. While segments of the plastics industry are now under severe competitive pressure, the sectors dealing with new technologies are not.
3. Strategic planning. It’s time for small manufacturers to start thinking competitively. Take Dell, a leader in the highly competitive computer industry. Not only have they squeezed extraordinary efficiencies out of their manufacturing operations, they treat their customers like kings. Dell is closer to their customers than almost anyone. They know how the products are used, what kind of features customers are looking for, how much they’re willing to pay, when they’ll be ready to upgrade, and more. Customers see them as a friend, not an enemy. And when you look beyond the production process itself, you too will find tremendous rewards.

Which is what the Manufacturing Advancement Center and the MassMEP are all about. Call me with questions or ask about the opportunities in Tech Transfer or lean manufacturing for your business. We’re here to help you implement continuous improvement throughout your business, if you’re looking to take that step. For those manufacturers waiting for the federal government to address the issues of high structural costs, such as health care and fair trade, good luck!

Jack Healy, Director, Manufacturing Advancement Center, [email protected]