A Manufacturing Challenge: Thinking Differently to Compete GloballyOctober 09, 2015
President and CEO
Connecticut Center for Advanced Technology, Inc.
To survive in today’s economic climate, it has become evident that small to mid-sized manufacturing companies need to continually think and act creatively about the factors which will allow them to achieve global competitiveness.
These companies are being pushed to innovate, explore new production methods and rethink how they conduct business. The pressure to change comes from an increasingly competitive global market that is demanding compressed delivery times and higher quality products at lower costs. The usual strategy of budget tightening, cutting expenses and operating month-to-month or quarter-to-quarter to sustain current profit levels is at the tipping point. Status quo is no longer an option.
One challenge is clear—the testing and implementing of advanced technologies and process improvements, which are critical to significantly drive business, are inherently restricted under a short-term business model. These changes require investments of time and resources that cannot be recouped within a few months.
In an ideal world, maintaining in-house research and development facilities would enable companies to take production offline to test and prove innovative ways to measure, cut and shape. Unfortunately for the majority of small-and mid-sized manufacturers, this is not feasible. When customers are pressing for rapid response times, all hands and machines need to be working. Most companies are not positioned to take assets offline—accentuating downtime—or to assume the risks that additional debt represents.
It has become necessary for a tactical shift in thinking to focus on operations and productivity for a longer term, not solely the immediate months ahead. It is time to invest in new technology assets and process optimization to maximize capacity and business success.
A shift should be pursued because it can result in significantly increased productivity. This axiom is true; we have seen the results of focused process optimization at CCAT’s Advanced Manufacturing Center, which dramatically improved cycle times and yielded substantial boosts in milling and turning capacity. These are game-changing results that make a difference in the short- and long-term.
While policies and programs that focus on jobs and workforce issues will continue to be important, these alone are not sufficient. Assertive efforts to support technology development are needed to accelerate change.
In a global market that is fueled by OEM product innovations, we have and should continue to use public policies to stimulate technology advancement, enhance production and ensure expansion of the smaller manufacturing sector.
Currently this aid is being recognized and offered through state programs in Connecticut and Massachusetts such as Connecticut’s Manufacturing Innovation Fund (MIF) and MassDevelopment’s Manufacturing Innovation Grant program. Along with focusing on current and future manufacturing employment needs, these fiscal policies recognize the significant value of investing in technology infusion and optimization of manufacturing production.
In Connecticut, with the recently unveiled Apprenticeship, Incumbent Worker, Manufacturing Voucher and Young Manufacturers Academy programs under the MIF, smaller companies will benefit from a comprehensive support program that integrates technology and talent.
In fact, these programs are an investment in a lean manufacturing process improvement. When the capacity of the machines themselves is boosted, businesses have a more competitive ability to sustain profitability without necessarily incurring burdensome capital debt or operating expenses. Further, as market demand increases, companies will be primed with the ability and resources to both add new equipment and increase their workforces.
Growing the U.S. manufacturing base is a core pillar of the country’s and the state’s economic recovery plan, and that model is solid. According to the National Institute of Standards and Technology, manufacturing will always serve as the foundation of the U.S. economy because it challenges us to become more innovative and with innovation comes expansion and jobs.
We know that manufacturing is specifically critical to the region’s economic recovery and stability. According to “The Case for New England’s Manufacturing Revolution”, a report released in early 2015 by the Boston-based New England Council and Deloitte Consulting, the New England advanced manufacturing sector employs more than 376,500 workers. The median annual wage for advanced manufacturing jobs is between $70,000 and $80,000. Beyond those employed directly in advanced manufacturing are the supplier companies and community economies impacted by the industry. The sector’s value to New England cannot be understated.
Although recent news reports indicate that economic recovery in our region is improving, ongoing support for technology infusion and optimization, along with advanced skills training, becomes an important matter to this sector’s success.
With a continuing enhancement of policy that aims to bring small-and mid-sized manufacturers into a productive alliance with research and development partners, the issues of capacity building, sustainment and growth will be addressed. This realistic strategy for implementing vital long-term investments solidly positions manufacturers in Connecticut, Massachusetts, Rhode Island and the New England region for the global competitive future.