From the Desk of Jack Healy
New England Gains 164 Manufacturing Plants
By Jack Healy, Director, Manufacturing Advancement Center, [email protected]
What seems to be counter-cyclical news is the recent announcement that New England gained 164 manufacturing plants over the past 12 months, and 1,700 over the past five years. This information was disclosed in recent data collected and issued by Manufacturers’ News Inc. Howard Dubin, Chairman of Manufacturers’ News, stated, "This unique region gained plants because its workers rank high in the skills, education, and technology that make up America’s new advanced manufacturing." While this may be true, it is yet another factor contributing to the current area-wide skills shortage.
Massachusetts remains the region’s top industrial state, accounting for 38% of New England manufacturing plants, while supporting 45.5% of the area’s industrial employment, according to statistics compiled by Manufacturers’ News.
Connecticut ranks second with 6,203 plants or 24% of New England manufacturing plants and 26.6% of manufacturing’s employment. Rhode Island is the smallest state in the New England manufacturing community with 2,416 plants and 78,673 jobs. Providence, Rhode Island, is New England’s top industrial city, housing 407 plants or 17% of Rhode Island manufacturers. Boston and Worcester, MA, rank second and third with 300 and 255 plants, respectively.
Aside from a few growing industry sectors, such as medical devices, what we are now seeing are numerous small manufacturing enterprises repositioning themselves and starting new operations to launch new technologies. As the large OEMs downsize and outsource to overseas suppliers, they are leaving a domestic supply chain of thousands of small manufacturing enterprises (SME) in search of new business.
In Need of a Technology Roadmap
Recognizing this change, the Manufacturing Extension Partnerships (MEP) in Maine and Massachusetts have launched an "Innovation" program. The program helps SMEs evaluate their current products and operating strengths, and develop a "technology roadmap" that will enable the companies to reposition. This roadmap includes the training of staff, both on a company-wide and an individual basis, to deal with the new technology that will be launched.
In Massachusetts, 20 different companies have participated in the "Innovation" program; approximately 730 employees have been trained and an additional $120 million dollars in sales are projected within the next four years. There are similar numbers for the Maine program.
Of course, this makes one wonder what great things would happen if a few thousand SME’s were put through this program. Approximately 35 people per company have been involved in the technology training thus far, achieving an average of $6 million dollars in projected new sales per company. What we really need is to train thousands of employees in new technologies in order to move our industries into the future.
We see this trend toward corporate reinvention not only in New England, but worldwide, as well. At the recent World Economic forum there was an unprecedented 22 sessions under the theme of "Innovation, Creativity, and Design Strategy." How all of this fares in the future remains to be seen, as the one missing ingredient that will ensure the realization of such innovation is leadership.
Best Practices Improve Performance
McKinsey Co. and the Centre for Economic Performance at the London School of Economics looked at the relationship between management and performance in more than 700 companies throughout Europe and the US. They found "a solid link between how well managers adopt proven best practices such as Lean–production methods on the shop floor and techniques for setting targets and tracking outcomes–and how well a company performs." McKinsey went further to state that "the best-managed companies in our survey–irrespective of their location, size, manufacturing sector, wages, or spending on research and development–also scored the highest on other key business metrics, including sales per employee, rate of revenue and market share growth, and market capitalization."
In its work in assisting small manufacturing enterprises on becoming globally competitive, the Manufacturing Extension Partnership has also found that management leadership is critical. The overall implications are clear:
- Mediocre management goes hand in hand with mediocre company results.
- Globalization, specialization, and technology are heightening competition among manufacturers and intensifying the pressure for leadership (management), from the boardroom to the shop floor.
Bringing Best Leadership Practices to the Local Community
As the McKinsey report summarized, "Whatever an organization’s objective, managers influence a company’s future by defining standards and by managing people, assets, and capabilities." In this regard, the Manufacturing Advancement Center will be working with the William J. O’Brien Leadership Forum, to bring good manufacturing practices to the manufacturing community. We expect that under today’s pressures, good managers will always be interested in Good Manufacturing Practices that will enable them to set higher standards for their respective organizations.
For all interested parties, there is no cost to belong to the Leadership Forum. If you wish to join please send an e-mail to [email protected], with your contact information and acknowledgement that you wish to participate; you will be automatically enrolled.
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