Hampton Roads Quality Management Community
Press Release
Hampton Roads Industrial Innovation Forum
Steps for the “Revitalization of Manufacturing” at home
June 2012: Hampton Roads, Virginia.
The Industrial Sector has the most leverage to improve the economy. Our challenge is to
integrate regional industrial actions to the best competitive advantage. The Hampton Roads
Quality Management Community (HRQMC) has brought together individuals, businesses,
and learning organizations to share best practices and learn how to become more
competitive through collaboration. Based on this experience we organized a forum on 7
June to address issues of national and regional industrial revitalization through improved
organizational productivity.
The keynote speaker for the forum, the Quality Professional of the Year by Quality
Magazine Harry Moser, framed the issues in terms of the real cost for off-shore operations
compared to building products at home. He expanded the discussion to include workforce
development initiatives necessary for improved competitiveness.
Harry Moser is the founder of the Reshoring Initiative and has been collaborating with the
Association for Manufacturing Excellence (AME) to define a strategy for the Revitalization
of Manufacturing which encourages policy-makers, educators, and industry associations and
operations executives to join in developing efforts focusing on local and state job creation to
bring jobs back home.
One of the key steps in this process is to use a Total Cost of Ownership (TCO) analysis tool
to effectively compare total cost of local and offshore sources, enabling businesses to make
informed business decisions. "We are committed to changing the sourcing paradigm from
'off-shored is cheaper' to 'local reduces the total cost of ownership,'" said Moser. As
companies analyzed the results of the TCO assessment, they identified gaps in performance
limiting their capabilities to compete globally.
The Reshoring Initiative, AME and its alliance partners the Society of Manufacturing
Engineers (SME), APICS, America Society for Quality (ASQ), America Productivity &
Quality Center (APQC), Virginia Business Excellence Consortium (VBEC), Senate
Productivity Quality Award (SPQA) of Virginia, GENEDGE Alliance (Virginia
Manufacturing Extension Partnership), Virginia Manufactures Association (VMA), the Old
Dominion University Business Gateway and other learning organizations are providing the
needed assistance to close performance gaps for businesses and their workforce.
These services come in the form of regional consortiums, continuous improvement
workshops, kaizen events, plant tours, annual international conference and assessments for
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Hampton Roads Quality Management Community
manufacturing excellence to apply counter-measurements dealing with people, processes,
and performance.
“As a region we must deal with the larger market issues and take action as communities of
practice to improve our own competitive posture - with workforce development, innovative
productivity, and capacity to manage change” said Seth Pillsbury, Director of HRQMC. The
challenge is to make "Made in America" and "Made in Hampton Roads" statements of real
industrial value.”
The 7 June forum was sponsored APICS, ODU Business Gateway, Busch LLC, Stihl
Corporation, Earl Industries, with HII-Newport News Shipbuilding providing the venue to
host this regional event. Participants were greeted by Gary Zimak, Director, Quality and
Technical Services. Joe Barto, president of Training Modernization Group, was the emcee.
The next forum is planned for September, focusing on a collaborative pilot project to train
1st line supervisors for small businesses.
The forum’s objective was to develop issues and an agenda for use by a community of
practice to revitalize the regional industrial sector. Discussion was structured into four
general themes:
1.
2.
3.
4.
National Manufacturing Initiative
Workforce Development
Supply Chain Management
Business Innovation
Harry Moser provided foundational positions with a keynote presentation describing how to
analyze costs for off-shoring decisions and the relationship of costs for production in China
against doing the work locally. Of note - the largest difference is the "hard costs" of labor,
productivity, plus logistics, and the differences are closing.
To compete, U.S. industry should look to improve its productivity by reducing wastes, and
develop a more skilled workforce to support advanced manufacturing techniques and
innovative business practices.
Glenn Marshall, AME Director At Large from NNS presented Harry Moser with an award
from AME recognizing his leadership in the Revitalization of Manufacturing JOBS in North
America.
J.C. Brinker, Associate Director of the ODU Business Gateway, set up the Town Meeting
discussion with an outline of the U.S. Manufacturing Competitiveness Initiative:
o
o
o
o
o
Fuel innovation and production economy from start-up to scale-up
Expand U.S. Exports
Harness American Talent
Achieve Next-Generation Productivity through smart innovation and manufacturing
Create competitive advantage through next generation supply networks and advanced
logistics
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Hampton Roads Quality Management Community
Charles Kane, president of Busch LLC, Virginia Beach, followed on with a list of strengths,
weaknesses and opportunities of the regional industrial sector:

Strength
Port access
Veterans Pipeline

Weaknesses
Lack of true local industrial infrastructure
Lack of skilled workers
Lack of regional industrial focus
Lack of education system focus
Labor costs
Boom/Bust of DOD budget cycles/cuts

Opportunities
Recognition of industrial base as economic
driver
Capacity of shops that normally build for DOD
but have space capacity. How to break into
commercial market
Everett Jordon, Education Director of the HII-NNS Apprenticeship School, outlined the
sharply improved value and status of the maritime skill certificate. School applications have
increased a magnitude over a couple of years ago, and the level of training rigor is
increasing as well.
Jordon shared NNS has a long history of hiring veterans, particularly those exiting the Navy
who are familiar with our products, culture, and work environment. NNS pursue exiting
military from all the branches that possess skill sets that match their manning needs.
Currently NNS employs ~ 2,800 veterans which equates to about 13 percent of its total
workforce. The Apprentice School currently has 56 students with military experience out
of a student body of 785, or 7 percent overall. Noteworthy, is the fact that four of our past
six Homer L. Ferguson Graduates (top graduate of the class) were former military. This is a
clear testimonial that former military perform extremely well in the program.
Bob Granata, VP of Operations & Technology Development at Newport News Nuclear,
expanded on the value of apprenticeship training to urge attention on innovation: benefit can
be found by improving workplace attractiveness to take advantage of the greater interest by
next generation workers for skill development and work opportunities.
He also pointed out that while innovation and improved workplace appeal are important, the
real driver of organizational change is pain, not return on investment. Identifying where
costs may be saved or workforce skills developed is useful only if we can also identify the
immediate problem such an effort will resolve. Granata shared how innovation drives the
economic growth of NNS, the region, and supply base.
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Hampton Roads Quality Management Community
Supply chain management was discussed, highlighting the need for skilled change leaders in
industrial organizations to keep extensive logistics issues aligned with rapidly changing
business strategies. Paul Schmidt, Profit Playbook, pointed out that local businesses have
reduced costs by reshoring:

Inventory Costs

Return on Assets
All costs are not applied to Sourcing Costs.
Missed opportunity costs because of fund
unavailability
Low turn rate if outsourced
Mr. Schmidt also pointed out a unique resource of 167 international companies from 27
countries in Hampton Roads - potentially offering high value guidance on global supply
chain management issues.
J.C. Brinker concluded the discussion with a call for action. Hampton Roads faces a
significant reduction of industrial performance unless actions are taken now to establish an
infrastructure of industrial organizations focused on continuous improvement and
productivity, and support a clear voice able to communicate the appeal and benefits of
innovative industrial labor to the region.
Pain




Loss of next generation engagement
Failure to deal with strategic changes
Lack of skill levels to meet demands for advanced manufacturing
High veteran unemployment
Benefits
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


Cost savings
Workforce development
Business innovations
Veterans recruited into workforce
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Hampton Roads Quality Management Community
Regional S W O T Chart
The Hampton Roads Quality Management Community facilitates collaboration among regional
enterprises to support continuous improvement and economic growth. Participation supports
execution of continuous improvement initiatives, with regional networks, agendas, and
collaboration opportunities to achieve:
1. Reduced costs for CI skill training
2. Basis for sustainment – regional agenda
3. Regionalism which in turn supports greater competitiveness
4. Structure of DMAIC controls.
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