Friday, March 28, 2014

Five Things I’ve Learned from Michigan Manufacturers

As a training and consulting organization, our staff interacts with a lot of Michigan businesses of all types and sizes. Either we’ll send our people out to the plant floor to conduct some hands on training or manufacturers send their people to us, for simulations, working groups, and interactive learning in our Real Factory . . . but when we’re together, we’re often working toward a goal or implementing an improvement project so we don’t get the whole story.

Thankfully, there are times when we host a tour or invite guests in to hear the whole story. And gratefully, I’ve been able to participate in quite a few. As an avid reader, I love a good story. As a manufacturing specialist, I love manufacturing success stories, especially when they’re from our clients.

This week we opened our doors to some very special guests. Bill Henderson was here from Aircraft Precision Products, Patricia Yulkowski came down from Total Door, and Ed Terris popped in from Peckham. They came to share their stories, and what great stories they shared. Allow me to make a brief shout out to our February guests, Kurt Hochrein from Dexter Research, Erick Stewart of Stewart Industries, and Bryan Domschot from Tec-Option.

Now, on to lessons learned. 
  1. Just because something doesn’t work the way you expect it to, is not a guarantee that it doesn’t work at all. One of our panelists talked about a product modification for a client. In the process of trying to address the need, an idea was born that, while not addressing the need directly, has led to a new, direct to consumer, product launch, its first of many.
  2. Be certain you really are working toward the same goal, before you launch an initiative. Another panelist, was quick to reference MMTC as a partner on their improvement journey. As an objective observer, with a depth and breadth of knowledge about manufacturing processes, MMTC can definitely help. However, the lessons is this - each one of those partnerships worked because the company’s team was in agreement on what they wanted to accomplish. If you need to make a change in your facility but can’t get your people on the same page – it won’t matter how good your solution is, or how tried and true your improvement, or even how great your partner is, chances are it won’t be sustainable.
  3. Change, for the sake of change, is doomed to fail, but so is not doing anything at all. Improvement projects sometimes take on a ‘flavor of the month’ feel and can be met by skepticism. You can’t make a process change without spending a little something, whether it’s time or money, and there’s a limit to both. If you say yes to one thing, you have to say no to another. Common sense, right? So, if it makes good business sense to do something, then it makes good sense, period! Organizing your plant floor into work cells, tracking work in process (WIP) to visually see where process bottlenecks exist, these are things that can make sense if implemented, but you’ll never get that opportunity, if you don’t try.
  4. Finding the right partner can make all the difference. One of our panelists shared its market struggles and the need to completely recreate its business model, from upgrading equipment to revamping the plant layout and rewriting process steps. This company contracted with MMTC for the layout and process improvements, but they also worked with other great and knowledgeable partners about machine upgrades, new technologies, and construction expertise. All these partners, working together and sharing information, helped to make the move to the new facility a virtually pain free experience.
  5. Implementing a business solution does not guarantee you the same results as the company next door, but it does guarantee you results. Every company thinks its process, product, or industry niche makes them unique and special. And while this may be true, it’s also true that process improvements apply to every business, no matter how special. While we can't say that improvements will be the same from shop to shop or even from work cell to work cell, one thing that is assured, there WILL be positive impact. It’s hard not to see bottom line improvements or increased throughput when people are recognized for their achievements. When everyone is working together to make things better, employees catch the enthusiasm and excitement from each other. Each positive outcome creates more opportunity for improvement.
For more on these and other great Michigan companies, check our success stories or our Proud to Manufacture in Michigan pages, highlighting manufacturers and our friends around the state.

We’re scheduled to do this again with different customers but similar great stories, on May 1st.  The focus is on employee engagement. Come learn with me. I hope to see you there.


Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org.

Friday, March 21, 2014

Re-shoring and the Quality of Michigan Manufacturing


As many U.S. manufacturers are aware, outsourcing continues to be a hotly debated topic. It was particularly a major issue in the 2000s when outsourcing became popular. Data from the U.S. Department of Commerce estimates that major corporations eliminated about 2.9 million U.S. positions in the 2000s while adding 2.4 million jobs overseas.
There has been growing commentary in manufacturing lately about what’s considered to be the opposite of outsourcing: re-shoring. Re-shoring is bringing back production to the U.S. that had been previously outsourced. Area Development recently published a comprehensive article on this topic, titled Manufacturing in America: Bigger, Better and Bolder. It’s a good read. Referenced in that article was data from the Re-shoring Initiative indicating an increase in new Re-shoring jobs of 1500% from 2003 to 2013.

Driving Factors
There are many factors driving this re-shoring trend. Some of the most compelling include:
Production Costs: The disparity between labor costs overseas and in the United States is diminishing. Many companies initially moved their manufacturing operations overseas because labor costs were so low. Today, wages in outsourcing hotbeds such as China and Vietnam remain less than what United States employees earn, but the difference is lessening each year. In recent years, for instance, wages in China have increased by 15 percent annually. Meanwhile, major companies in the United States have been able to manage their stateside labor costs through restructuring and renegotiating contracts.
Tightening the Supply Chain: Supply chain management demands attention to sourcing, manufacturing, inventory management, logistics, and customer service. Tired of having to hold excess inventory, face disruptions from natural disasters, and endure long wait times, companies are looking to have more control over the end product and increased flexibility and speed to market. As the costs of moving finished goods from one country to another increases, companies prefer to make goods close to the customers’ purchasing location(s). Unlike recent increases in international transportation costs, domestic energy costs have remained relatively stable.
Quality: Consumers are finally realizing the quality of American-made products. Value trumps cheap. A Gallup poll found that 60% of Americans are willing to pay more for a product if it’s Made in America. Call us a little biased, but we believe that Michigan produces the best quality in the U.S.! To see all of the incredible products being produced in our state, check out our Proud to Manufacture in Michigan program.

Notable Companies are Moving Back
re-shoring
Companies large and small have moved work back to the United States. One of the household names that has re-shored is GE, which remodeled one of its plants in the United States so they could manufacture high efficiency water heaters. Whirlpool and Ford are two other major companies that have returned operations to the United States in recent years, including to operations in Michigan and Ohio. Along with these Fortune 500 companies, numerous small companies have also moved production back to the states. Michigan Ladder Co., has been in the business of assembling wood and fiberglass ladders for over 111 years. Recently, it brought work outsource to China back to Ypsilanti and began assembling its own fiberglass ladders in Michigan. CollegiateBead Co., in Madison Heights, brought its jewelry work back from China as well, citing quality issues and rising labor costs as the main reasons for bringing work home. A 2012 Detroit Free Press article on the company led to added jobs not only for the bead manufacturer, but also for Michigan company, Terryberry, which saw an article on the Collegiate Bead Co., and which went on to win a contract to mass-produce the metal molds for its jewelry.
If you are looking for ways to bring your production back to Michigan, contact MMTC to learn about our Manufacturing Solutions.

Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org.

Friday, March 14, 2014

Michigan in March: Detroit Love, PI Day and Green Beer

In addition to being a harbinger of spring . . . something that is desperately desired by virtually every Michigan resident this year . . . . March brings us wonderful local and internationally recognized holidays. 

First, we have 313 Day - reflecting love for one of our most notable cities, Detroit. This 'holiday' is gaining steam and this year featured special gifts for some of our newest Michigan residents. Pure Detroit posted about it earlier this week. If you haven't read or heard about it, check it out. Start your [family] planning now for next year's celebration.

Pi Day, following 313, is an official US Holiday. A Detroit Free Press article sums it up well. The holiday designation was issued in the hopes of promoting mathematical studies, but sitting down to a slice of your favorite pie is certainly not out of the question. Be sure to get ready for next year, as it will be 3.14.15, and if you know the next few digits of pi, you'll be especially excited around 9:26:53 am/pm. . . .For a fun Pi calculator, check out calculatorpi.com/ or visit the official piday website.

And finally, March 17th falls on Monday this year, but don't let that keep you from the green beer and other festivities marking the St. Patrick's Day celebrations around our great state. For a little fun, check out the Michgian Beer Film. This film created by Kalamazoo based Rhine Media Productions, in support of Michigan's growing craft beer industry, is being shown around the state at various locations. For more information or to purchase the film, check out their website. The three minute trailer should whet your appetite for more. 

What are your favorite days to celebrate in March? 

  

Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org

Friday, March 7, 2014

International Growth Opportunities for Michigan’s Manufacturers

There is a common, yet erroneous, belief among many domestic business owners that only large businesses have the ability to sell to a global market. Many companies, believing that only large US manufacturing exporting companies can be competitive in the international market, don’t explore the opportunity. This unfortunate misconception has prevented many US manufacturers from experiencing the potential sales growth from exporting their goods overseas.  

According to the US Small Business Association, small businesses account for 97 percent of all US exporters. The problem is that while the largest pool of exporting companies is comprised of small businesses, very few of them actually seek out the global market. This represents huge untapped potential that the majority of US manufacturers are missing out on because they only focus domestically!

International Growth

US customers only account for five percent of the potential consumers in the world. That’s a fraction of the consumer pie. Manufacturers who fail to see the importance of exporting will be limited to this mere five percent. Some analysts’ projections indicate that 90% of all growth will be outside the US market over the next five years. Businesses that get in the game now have the added benefit of smoothing out any economic risk should the US recovery stall. Having a diverse customer base helps limit the effects of any economic downturn experienced by any one country.

An Open Market

exporting
US exports have increased more than five percent in recent years, with the greatest growth in exports to China, Canada and Mexico. The Free Trade Agreement (FTA) has given US manufacturing exporting companies the ability to trade with at least 20 different countries around the world, including Australia, Canada, Mexico, Morocco, Honduras, Panama, and Peru. US manufactured goods exports to FTA partners grew 6.8% in 2012, compared to 2011. These governmental agreements, along with the capabilities of the Internet, have made trading globally easier than ever before. In a slightly dated, but no less relevant, article from Entrepreneur.com, writer Gwen Moran identifies 10 hot export markets for small businesses. With less than one percent of US manufacturers currently selling their products overseas, now is the perfect time for any size company to join the market.

National Export Initiative

While the road to exporting is not always smooth, there are many resources available to assist in navigating international waters. The government has set up the National Export Initiative (NEI) to help US businesses, including manufacturers, receive the resources they need to start an international sales campaign. This program can help US manufacturers find global customers, apply for governmental international contracts, and provide a wealth of information about setting up a US manufacturing exporting company. This initiative is designed to encourage more businesses to export their goods and to increase US exports worldwide.  

Michigan Resources

As a subset of the US Small Business Administration, US Export Assistance Centers (USEACs) are located in major metropolitan areas throughout the US. Their mission is to provide help for small business owners in further developing their exporting plans and initiatives. Michigan offices are located in Detroit, Grand Rapids, and Pontiac. Grand Rapids is also home to the Van Andel Global Trade Center through Grand Valley State University. MMTC also has experience conducting international market research and website reviews to reduce cultural barriers and language ambiguity.

Everybody Wins

US manufacturers have the ability to greatly increase their clientele and overall sales by expanding into the global market and reaching the other 95 percent of the world’s consumers. US manufacturing exporting companies not only grow their own personal sales but they help to increase the presence of the United States in the worldwide market.

This, in turn, will help to grow the US economy and keep the US dollar strong. As US exports continue to grow and more US manufacturing companies export, the US can expect to see a surge in new manufacturing jobs across the country to meet this demand. This will also help to stabilize and improve the domestic economy, by creating job growth and increasing revenue!


Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org.

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