Manufacturing Defined- Making Things!

March 17, 2014

We were pleased to be quoted in the weekend edition of the Wall Street Journal in an article by Tim Aeppel titled Feds Try Redefining Manufacturing.

Our initial post on Factoryless Goods Producers was cited in the article.

It's like manufacturing, except without us actually making anything.

It’s like manufacturing, except without us actually making anything.

The issue is that federal agencies are trying to redefine “Manufacturing” to recognize “Factoryless Goods Producers” as Manufacturers.

If you don’t actually make something- how can you be considered a Manufacturer?

If you contract to have some company in a foreign country make your product, why should you be credited as manufacturer and why should US get balance of trade credit for being the manufacturer?

We think that definitions ought to be honest.

Manufacturing is actually making things. not designing them, ordering them, or buying them from another company.

We think that manufacturing ought to be credited where the making things actually happens. Apple designs and sells some really cool electronics- but the manufacturing is not done in the US.

Why would we want to let US companies claim to be manufacturers when in fact they don’t make the products in the first place, and often have them made overseas where the operations are not governed by US legal protections for labor rules,  safety, environment?

Deceiving consumers and the voters with fraudulent numbers is what this about. It’s not about reacting to globalization. It is about counting the hollowing out of US Manufacturing as actually manufacturing.

  • Yet no new employees are hired.
  • No new assembly lines or factories are built.
  • No new payroll taxes are being paid.

Manufacturing is about making things.

If you don’t actually make it, you aren’t a manufacturer.

Sorry if that offends you.

You may be a great designer. Broker. Outsourcer. Wholesaler, Distributor. Whatever.

But you aren’t a manufacturer unless you actually make things.

Read Tim Aeppel’s WSJ Story

What is manufacturing?

He’s Lying Photo Credit


June ISM PMI Report-Resumption of Growth in Manufacturing

July 1, 2013

Good news/ bad news: Manufacturing growth resumes, but Employment shrinks in Manufacturing  for first time since September 2009…

“Manufacturing expanded in June as the PMI™ registered 50.9 percent, an increase of 1.9 percentage points when compared to May’s reading of 49 percent. June’s reading of 50.9 percent reflects the resumption of growth in the manufacturing sector for 2013, following the only month of contraction for the year in May.”- Bradley Holcomb, Chairman of the Institute for Supply Management Business Survey Committee.

Graph Courtesy Calculated Risk Blog

Graph Courtesy Calculated Risk Blog

Precision machined products are widely used key components used in a host of manufactured and durable goods. Precision machined products are a submarket of Fabricated Metals, which is tracked in this ISM Report on Manufacturing.

“A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the June PMI™ indicates growth for the 49th consecutive month in the overall economy, and indicates expansion in the manufacturing sector following one month of contraction. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through June (51.5 percent) corresponds to a 2.9 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for June (50.9 percent) is annualized, it corresponds to a 2.7 percent increase in real GDP annually.” (PMI™ stands for Purchasing Managers Index.)

ISM’s Production Index registered 53.4 percent in June, which is an increase of 4.8 percentage points when compared to the 48.6 percent reported in May.

How do your  June shipments compare to this benchmark?

The ISM report showed  11 industries reporting growth in production during the month of June — listed in order —  Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Paper Products; Nonmetallic Mineral Products; Wood Products; Fabricated Metal Products; Primary Metals; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The three industries reporting a decrease in production in June are: Chemical Products; Machinery; and Transportation Equipment.

We are glad to see manufacturing back in growth mode, however, we were not pleased with this month’s first sign of contraction in employment.

ISM’s Employment Index registered 48.7 percent in June, which is 1.4 percentage points lower than the 50.1 percent reported in May. This month’s reading indicates contraction in employment for the first time since September 2009, when the index registered 47.8 percent. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.”

Dollars-2-donuts-image2

We are betting dollars to donuts (remember when there used to be a real difference between dollars and donuts?) that the  slowdown in hiring is related to employers’ concerns over Affordable Care Act.

Dollars to Donuts

Calculated Risk


Society- Driving Technical Innovation in Precision Machining

June 19, 2013

It is not just demographics of our workforce that drives our industry. It is also the demands of society that provides us with the opportunity to innovate.

I was on a panel at IMTS last year on workforce issues.

I shared the following information regarding our workforce demographics in 2020 according to BLS

Major changes ahead for our shops.

Major changes ahead for our shops.

You can read my post here Skilled Workforce Demographics 2020

I was interested to see a presentation from Paul Horn GmbH. entitled Society- Driver of Technical Innovation at HORN Technology Days last week. Their approach was workforce agnostic- it was based on a look at the  demands from society, rather than focus on how industry will supply that demand.

My economics professor would be so proud.

in 2008-2009 we learned that it is Demand, and Not supply, that drives the economy.

in 2008-2009 we learned that it is Demand, and not Supply, that drives the economy.

So how does Horn see societal demand driving innovation in the precision machining space?

7 Megatrends to Impact our Industry

  • Mobility
  • Population Growth
  • Globalization
  • Communication
  • Health
  • Aging Society
  • Urbanization

Changes in each of these areas requires technical innovation in Production Technology, Materials, Processes, Electronics, and Software, to make new technologies economically adoptable “Just in Time.”

Pillars of technical innovation

Pillars of technical innovation

Interestingly, Precision Machining “owns” all five of the “columns” in this model as we grow into our future state.

Which of these  are your particular “sweet spot?” What is your plan to gain competence in the others?

Who would argue that we are not facing new challenges in production technology, materials, processes, or increased use of electronics and software to make tomorrow’s more challenging parts?

We will revisit some of these megatrends in coming blogs.

Do you have a process for identifying “over the horizon” issues that will affect your shop?

Which megatrends are opportunities more so than challenges for your shop and team?

Thanks to  PMPA Technical Member Horn USA for sharing the materials from Technology Days


Manufacturing Optimism- Roscoe Wallace With Kaiser Aluminum

May 30, 2013

We caught up with Roscoe Wallace at PMTS  and got his take on Manufacturing from his perspective as an Aluminum supplier.

Positivity about

  • manufacturing,
  • productivity,
  • reshoring, 
  • manufacturing as a career.

Concerns about

  • material integrity from off shore
  • right skill sets for job openings  that their customers have  in advanced manufacturing.

Thanks to Roscoe for his positive news from the aluminum side of precision machining.

And thank you to Kaiser Aluminum.


Where The Jobs Are- Mark Tomlinson in Huffington Post

April 5, 2013

The manufacturing industry is facing an employment crisis. The rate of technical advances has outpaced our ability to educate and train workers on new machines and applications, creating a “skills gap.”-Mark Tomlinson, CEO, Society of Manufacturing Engineers.

Skilled machinists positions continue to be open in our industry.

Skilled machinists positions continue to be open in our industry.

I thought it was interesting that even during the depths of the last recession, the classified ads in the major newspapers still showed opportunities for setup and machinists in our precision machining sector of advanced manufacturing. It’s still true today. We have visited local community colleges  around the country that provide machining training and we hear the same story, after the first semester, “most of our students already have found a job or have one promised upon graduation.”

Here’s more from Mark-

“This is a great time to work in manufacturing. We’re applying once pie-in-the-sky technologies to real-world needs: creating strong yet flexible limb replacements for our wounded warriors, robots that crawl into the fuselage of an aircraft, mountain bikes for extreme enthusiasts, engineered for safety pushing the boundaries of men and machine. It’s stuff that captures the imagination.

“Yet students are not pursuing these jobs despite the cool factor. Some of it is institutional and some of it is perception. A major challenge is there is no academic infrastructure to administer STEM (science, technology, engineering and mathematics) curriculum on a national scale. That’s compounded by a lack interest in STEM by educators, parents and students who may be more inclined toward attending a four-year college.”

We need to help change the perception of manufacturing and skilled trades.  In educators, parents, and students.

We need to help change the notion that going heavily into debt for a bachelors degree without a plan for return on investment (ROI)is the weay fofr our sons and daughters to get their start in life.

We need to show parents, students, counselors, teachers, our communities, the “existential joys of manufacturing”- the cool stuff we make, the high tech machines we use to make it, and the broad math, science, problemsolving intellectual skill set that we bring to our work.

That our skilled machinists are worthy of the highest respect.

Mark Tomlinson told the Huffington Post “We know where the jobs are.”

Indeed.

If you would like to investigate a career in advanced manufacturing / precision machining- we’ve prepared a a database to help you access training resources wherever you are. PMPA Career Info Database.

For more info you can also  search on “Manufacturing,” “Skills,” or “Career” in this blog’s search box in the upper right corner.

Or go to PMPA website Careers section.

Photo


Pi Day 2013 and Student Engagement

March 14, 2013

The uhh- “techie” part of us is celebrating Pi Day at 1:59 pm today

Today 3-14 at 1:59  I will be celebrqting Pi Day. 3.14159 is the value of pi to 5 decimals...

Today 3-14 at 1:59 I will be celebrating Pi Day. 3.14159 is the value of pi to 5 decimals…

So besides being  the cause of much techie “irrational” exuberance, Pi Day  is a great way to get some engagement with students.

Marymount High School has several activities, last year they had a design competition incorporating pi; the students then made and sold buttons of each design, proceeds going to the Red Cross.

Hmm- math subject matter, design, production, sales, accounting.

Sounds like what we do in manufacturing.

Maybe celebrating Pi Day is not so irrational as first thought.

Pi day, is not just about the Pi(e), as much as it can be about showing relevance of math and integrating their skills  and engaging students differently.

How did you celebrate Pi Day? What are your plans for next year?  For 2015?

p.s., mine was Peach…


Why Manufacturing Is Still Your Best Career Choice

February 19, 2013

ITR Economist Brian Beaulieu gave a very informative economic outlook for the attendees at PMPA’s Manaement Update Conference in Glendale Arizona last week.
We saw lots of charts and correlations that helped our members make sense of all the conflicting ‘news’ and economic indicators that are our constant distraction.

But I can share with you the one graph that should give you the confidence to find your career in advanced manufacturing (like our precision machining industry) rather than go headlong into debt for a college degree that may not have a positive return on investment.

US Manufacturing as a percentage of GDP (Value Added) (3 Month Moving Average)

The trend for US manufacturing remains positive and significant.

The trend for US manufacturing remains positive and significant.

This graph documents recent history, going forward we see manufacturing jobs returning to North America as energy prices for the rest of the world increase.

We see energy access and prices improving for U.S. Manufacturers as a result of the shale gas boom.

We know personally, despite the uncertainty in the market, that many shop owners are trying to add talent, so they can continue to sustain their levels of production and customer service.

If going deep into debt for a degree with no return on investment is something that you are determined to do, good luck with that.

If however, you could consider the idea of learning and earning as you go, I can heartily recommend getting a start in precision machining via a local community college.

It has been our experience that you will have a job before you complete a one year operator program, and the balance of your training and education will be sponsored in whole or part by your employer.

54% of recent college graduates are unemployed or underemployed.

Career info on Precision Machining.

PMPA Training and Education Database


Follow

Get every new post delivered to your Inbox.

Join 88 other followers