Blog posts tagged with Economic-Issues-For-Mfgs

Reshoring gets welcome attention; Good business climate necessary to take advantage of potential

May 01, 2012 by MAGNET Ohio

"Onshoring" / "Insourcing" / "Reshoring" These are the names of an emerging trend to bring manufacturing production back to the U.S. that has been taken overseas (often to China) over the past several decades–primarily to take advantage of lower cost labor. For a variety of reasons, bringing these jobs back has become a viable option in some cases. These include situations where the overseas wage advantage has eroded, transportation costs have risen, and currency valuations shifted to favor U.S. production.  In addition, demands for just-in-time delivery, managing quality in supply chains, and reactions to environmental and political disruption in some overseas markets, have prompted companies to look at reshoring as an option. Big consulting firms like Boston Consulting Group, Alix Partners, McKinsey, and Accenture have all studied the reshoring potentials.  In some instances they advocated to their manufacturing clients that they seriously look at reshoring as a business option. Reshoring also is very popular politically.  President Obama has established an Insourcing Initiative, partly to leverage the experience of some of the big companies like General Electric and Caterpillar that have been in the forefront of reshoring.  G.E. recently as announced that it will bring enough jobs back from China that

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Case Western survey reveals good side and ugly side of automotive supply chain

March 20, 2012 by MAGNET Ohio

By Susan R. Helper and Tim Krueger America’s automotive supply chain is a vital organ of our country’s economic engine, employing about 578,500 workers.  The lower tiers of the supply chain alone account for 30% of U.S. auto industry employment. In 2008 and 2009, when fear of an auto industry collapse was palpable, the fate of the supply chain was a major concern both because of the number of American jobs it supports and because a problem in one small part of the supply chain can send disastrous ripple effects through the entire industry.  Given its importance, our team of researchers at Case Western Reserve University set out to study the health of America’s automotive supply chain.  We sought to gain a better understanding of the industry’s problems, and their solutions. Our study was funded by the federal Department of Labor, and we are grateful to MAGNET, the Manufacturing Advocacy & Growth Network, for their collaboration as well. In a nutshell, the results of our study show that not all automotive suppliers are equal.  In fact, even firms with similar core competencies, supplying similar products for similar prices, adopt entirely different business strategies.  What’s more, it turns out that different

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As economy heats up, motor vehicle supply chain faces new challenges and opportunities

March 19, 2012 by MAGNET Ohio

The Wall Steet Journal recently reported that the surge in consumer borrowing is primarily due to auto and student loans—two factors that bode well for the auto industry (Consumers Ramped Up Borrowing in January, by Neil Shah, Wall Street Journal, March 7, 2012). The average car on U.S. roads is now a record 10.8 years old. More people buying cars gives more solid evidence to a rebounding auto industry. More people returning to school, could lead to more skilled workers for advanced manufacturing positions that are going unfilled. Ohio is experiencing both of these phenomena even as the unemployment rate continues to go down. The PNC National Economic Outlook for March reported "there was a big jump of 6.8 percent in output of motor vehicles and parts in January, consistent with stronger sales; this was on top of a 3.8 percent gain in December (revised up from 0.6 percent). Auto manufacturers have boosted production as demand has picked up. This is also spurring hiring in manufacturing, and broader economic recovery, especially in the Midwest." For the past several months, in Ohio, we’ve been seeing headlines that confirm what appears to be a recovery in the auto industry. Headlines like: Ford

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Manufacturing can be the cornerstone to economic recovery

September 13, 2011 by MAGNET Ohio

The Manufacturing Extension Partnership (MEP) program is the foremost public-private partnership in the U.S. MEP is tightly focused on sustaining and growing vibrant economies through innovative manufacturing. So those of us in leadership roles within the MEP are pleased to hear words coming from Washington that re-affirm our belief that innovation in manufacturing can be a cornerstone to the economic recovery strategy. In the 21st century, manufacturing will rely on engineers, technicians and creative leadership—brains not brawn—to elevate the status of U.S. know-how and ingenuity. We at MAGNET, which is the MEP organization for Northern Ohio, are encouraged by President Obama’s remarks during his address to the joint session of Congress on Sept. 8, 2011. The President emphasized the importance of manufacturing and, in particular, the importance of establishing on-the-job training and tuition incentives for students to study engineering. In the President’s words: "Already, we’ve mobilized business leaders to train 10,000 American engineers a year, by providing company internships and training. Other businesses are covering tuition for workers who learn new skills at community colleges. And we’re going to make sure the next generation of manufacturing takes root not in China or Europe, but right here, in the United States

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Great News! Congress FY2012 budget supports key manufacturing initiatives

August 03, 2011 by MAGNET Ohio

The House Appropriations Committee’s FY2012 budget appropriations bill passed out of committee on July 13 shows strong support for reviving manufacturing and helping small manufacturers and entrepreneurs gain access to loans to spur innovation. The Committee has increased funding for programs focused on innovation, and "reshoring"—a new verb for bringing manufacturing back home. The vote to fund programs like the National Innovation Marketplace, the new Innovative Manufacturing Loans, and the Repatriation Initiative are an acknowledgement that many manufacturing jobs which migrated overseas were not all low-skilled, dead-end mindless jobs.  Many of the lost jobs require advanced training and skills in operating and maintaining very complex machinery. We need those jobs to come back to the U.S. so the creativity and ingenuity doesn’t disappear along with the technical know-how. Small manufacturers are especially aware that ideas for new products and process improvement often go hand-in-hand with production where processes are tested and innovation is born.  Innovation and know-how depend on understanding how things work and making them work better, faster, safer, and with less energy consumption. That can happen in a research laboratory or in the neighbor’s garage, but my experience says a lot more of it happens in places where making

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MIT Technology Review: Location matters in manufacturing

July 22, 2011 by MAGNET Ohio

The MIT Technology Review today published an article that makes the case that the migration of manufacturing from the U.S. to Asia is an urgent problem for reasons other than the obvious effect on manufacturing employment. In her analysis of optoelectronic and automotive component manufacturing, Carnegie Mellon University professor Erica Fuchs shows that the fate of emerging technologies can be linked to the choice of manufacturing location. Quick quote: "In studies with colleagues at MIT, Fuchs shows that the relocation of component manufacturing from the United States to East Asia in optoelectronics and to China in composite body parts for automobiles changed the economics of producing the technologies. "The result in both cases is that emerging technologies developed in the United States were not economically viable to produce in the Asian countries because of differences in manufacturing practices. And Fuchs suspects similar effects are happening more generally as production shifts to the developing world. "Location matters for ‘which products will be economically viable, which products countries will be most competitive in producing, and which products countries and companies globally are most likely to develop,’ she says." Read the full text of the article here: Location matters in manufacturing, by David

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MIT Technology Review Why Manufacturing Matters

July 06, 2011 by MAGNET Ohio

"Manufacturing is not merely about giving people jobs. The next generation of technological innovations is intimately tied to production processes." In an article published in the MIT Technology Review on July 1, Suzanne Berger,  a professor of political science at MIT who  co-chairs the Institute’s Production in the Innovation Economy project, makes the case that future technology innovation will not follow the pattern established over the last three  decades by the information technology sector. "The experiences of successful firms over the past 30 years make it plausible to think that manufacturing can be outsourced and offshored without any damage to the engines of innovation. Once it was possible to codify the different stages of the journey from conception to final product and to break design apart from production, major new industries could arise around enterprises like Apple, Qualcomm, and Cisco. … [However,] There is a close connection between R&D and manufacturing in many of the emerging sectors (wind and solar, biotech, new materials, batteries and others) because modularization may just not work as well for these technologies as it has for IT. R&D engineers may have to stay close to manufacturing to develop new strategies for making processes more efficient."

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President Obama announces $500-million investment in Advanced Manufacturing Partnership

June 24, 2011 by MAGNET Ohio

Pittsburgh, June 24, 2011—Today, at Carnegie Mellon University, President Obama launched the Advanced Manufacturing Partnership (AMP), a national effort bringing together industry, universities, and the federal government to invest in the emerging technologies that will create high quality manufacturing jobs and enhance our global competitiveness. Investing in technologies, such as information technology, biotechnology, and nanotechnology, will support the creation of good jobs by helping U.S. manufacturers reduce costs, improve quality, and accelerate product development. The President’s plan, which leverages existing programs and proposals, will invest more than $500 million to jumpstart this effort. "Today, I’m calling for all of us to come together- private sector industry, universities, and the government- to spark a renaissance in American manufacturing and help our manufacturers develop the cutting-edge tools they need to compete with anyone in the world," said President Obama. "With these key investments, we can ensure that the United States remains a nation that ‘invents it here and manufactures it here’ and creates high-quality, good paying jobs for American workers." (Read more…) Related documents: White House Press Release: President Obama Launches Advanced Manufacturing Partnership, June 24, 2011 Full text of the President’s June 24, 2011 remarks in Pittsburgh Archived video of the President’s

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Annual survey recognizes Ohio excellence in manufacturing and logistics

June 22, 2011 by MAGNET Ohio

According to Ball State University’s annual Manufacturing and Logistics Report Card, Ohio is one of only two states to earn both an "A" grade in manufacturing and logistics. Indiana also earned an "A" grade in both industries. The manufacturing rating is based on total income earned by manufacturing employees in a given state, the wage premium received by manufacturing employees relative to those of other states and the per capita share of manufacturing employment. The logistics rating is based on the share of total logistics industry income as a share of total state income and the employment per capita. In announcing the report’s results, the Ohio Business Development Coalition interviewed MAGNET’s President and CEO, Dan Berry, who said: "As globalization, technology and innovation reshape our economy, some of the greatest opportunities for economic growth in Ohio lie in manufacturing," said Daniel Berry, president and CEO of the Manufacturing Advocacy & Growth Network, a Cleveland-based economic development group aimed at helping manufacturers in Ohio become more competitive and grow. "We are looking for opportunities to build on the strengths of our industrial heritage that’s highlighted in the Ball State University report by connecting these capabilities with future manufacturing needs in technology-driven

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Make sure you Qualify before you Diversify

March 21, 2011 by MAGNET Ohio

As your company prepares to diversify into an adjacent market of its current business—or, as it prepares to adapt existing products or services to enter a brand new market—be sure to take a long, hard look at your company’s organizational strengths and weaknesses. Here are several important questions to ask before you take that leap: How do you go to market right now? What are the expectations of your new market as to how you reach them? What is your current manufacturing capacity? If you hit a home run in your new market will you be able to keep up with the additional volume? Do you have a robust and effective Quality Management System in place now? The answers to these questions, especially the last one,  may well be critical to your success in a new market. Look carefully before you leap Recently, an Ohio manufacturer saw an opportunity to diversify its customer base by expanding from its traditional industrial users to specialty users.  The company’s managers carefully researched the new target market. After identifying the key players,  they  decided to  hire salesmen from their target competitors to help them succeed in the new market. Despite this advance preparation, when they

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