FEATURE Manufacturing
Advanced
Manufacturing
Opportunities
By Ed McCallum
They Happen for a Reason
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PHOTO COURTESY OF GF AGIE CHARMILLES
Poll any economic developer and ask them, “Are you
interested in recruiting advanced manufacturing?” and the overwhelming response will be a resounding “YES!” Then ask them to
define “advanced manufacturing.” Odds are that the numbers
who truly understand the term will be far less. Unfortunately, the
definition of what constitutes advanced manufacturing is rather
broad. Generally speaking, those industries that use advanced
planning and scheduling and also integrate high levels of technological sophistication throughout the entire manufacturing
process in order to gain increased value and productivity are
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categorized as advanced manufacturing.
www.tradeandindustrydev.com
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FEATURE Manufacturing
Advanced manufacturing is not a description of a specific type of manufacturing; instead, it is both a philosophy
and concept of continuous process improvement and adaptation that has a direct bearing on the suitability of a facility
for any given community.
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The Right Environment for
Advanced Manufacturing
Companies engaged in advanced
manufacturing practices want to exist in
an environment where innovation
thrives, technological advances are accepted, and supply chain efficiencies
meet to create market competitiveness.
While the majority of these activities
are the adoption of strict management
practices and culture within the confines
of an organization, there is also significant influence from outside the company walls that is a function of
geography and place. For executives
contemplating establishing a new operation, or those deliberating continued
operations at an existing location, a review of the competitive landscape that
supports advanced manufacturing
would be prudent. Important factors to
understand include: business assistance
and incentives, workforce development,
existing industries and potential suppliers, labor-management relations, support services, basic infrastructure, and
innovation centers.
When evaluating locations, there is
value in understanding the business climate and level of support for investment
in advanced manufacturing. The entire
advanced manufacturing process is
based on adding value for the consumer
in the most efficient manner possible.
Starting at the beginning, where lean
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lege and university programs should be
in tune with the needs of industry in the
region to provide multiple educational
opportunities. Notwithstanding the need
for basic proficiency in reading, writing,
math and communications in K-12, providing alternative educational paths to
students is important. Parallel education
paths for those wishing to pursue a technical path earlier, rather than later, is a
fundamental recognition that education
is a means to employment for most students and a source of qualified workers
for business
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manufacturing concepts and quality driven execution governs both rate of production and levels of finished product
inventory, the advanced manufacturing
process is competitive. Non-essential
functions and waste are driven out to
create value. Applying and adopting
new technologies is not cheap; and, as
a consequence, has inherent risks. A key
business climate factor for an advanced
manufacturing company to consider is
the existence, or lack of, investment tax
credits, abatements or refunds against
tax liabilities at both the state and local
levels. Tax policy defines the value that
is placed on advanced manufacturing industries. There is no clearer message
than a lack of incentives that focus only
on job creation and ignores the catalyst
that is responsible for it in the first
place.
Workforce and Education
Considerations
Another critical aspect of success in
advanced manufacturing is workforce development. Quality education for K-12
which continues on with top-notch colCIRCLE 35 ON READER SERVICE CARD
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FEATURE Manufacturing
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PHOTO COURTESY OF GF AGIE CHARMILLES
and industry. In some instances, and for
some industries, certifications and expertise in certain fields (i.e., mechatronics) is
just as important as bachelors and masters degrees. The workplace is becoming
more and more complex and so are the
skills and knowledge required to succeed
and be effective. A lack of programs that
provide alternate education paths not only
sends a message to the students in the region about the value and importance of
working in a manufacturing environment,
it also speaks volumes to existing or
would-be manufacturers. Similarly, col-
leges and universities should also try to
establish collaboration and innovation
with industry to not only provide qualified experts, but they should also strive
to be a resource for problem solving and
research. Advanced manufacturing technique is an automated production system
of people, machines and tools for the
planning and control of the production
process, including the procurement of
raw materials, parts, components, and the
shipment and service of finished product.
i
Success in advanced manufacturing requires proficiency in, and collaboration
among, engineering, business, logistics,
marketing, and a host of other disciplines
that are housed in most colleges and universities.
Supply Chain and
Existing Industry
An examination of the types of industries that are present in a region is another
indication of the presence or absence of
advanced manufacturing activities and
the ease or difficulty of operations. A
company with a vision of lean manufacturing operations will be hard pressed to
succeed in an area that lacks service and
maintenance support for critical manufacturing components, cost-effective and
efficient logistics providers, or simply adequate information technology and internet services. An examination of the
supply chain that exists to support the
business enterprise is an obvious requirement that must be satisfied. For major
OEMs, proximity of certain suppliers on
a just-in-time basis is crucial. Key suppliers must be either located within the
required distance, or they have to be able
to establish an
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FEATURE Manufacturing
operation close enough to meet just-intime procurement parameters. The presence of existing companies with several
acres full of inventory could mean more
than simply poor planning on the part of
management and should bear some type
of investigation.
An examination of the unions in a region – not so much on whether the companies are organized or not, but more on
the circumstances surrounding the organization and the nature of the union in
question – is another important evaluation of potential locations. If there are facilities in the community where there has
been a contentious relationship between
management and labor, this is an immediate red flag – especially if the work
rules are particularly inflexible. Advanced manufacturing is dependent on
being highly flexible and agile, capable
of adapting not only to aberrations in
day-to-day opera- (Continued on page 42)
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CONNECTICUT
Branford Offers
Opportunity
Connecticut’s Department of Labor described Branford in its CT Economic
Digest as “a vital community with a strong economic base, low taxes, and excellent schools and municipal services. The town is rather unique among the shoreline towns east of New Haven in that it has
encouraged substantial development in well-defined districts.”
With a healthy business climate and a diverse business community of bioscience, manufacturing,
healthcare and service industries, and retail, Branford businesses include: 454 Life Sciences, an
R&D powerhouse in biotech; CAS Medical, among the Connecticut Technology Council’s “Top 40”
fastest growing technology companies; and Branford Hills Health Care Center, recipient of the American Health Care Association’s “Step 1 Quality Award.”
These businesses recognize that Branford provides them with what every company wants: full municipal services (e.g., water, sewer), a skilled workforce, the lowest tax rate along the I-95 corridor,
and convenient access to transportation. A triple-A rating by Standards & Poors is icing on the cake.
Centrally located on the Long Island Sound with more than 20 miles of shoreline, Branford has a
quality of life and sense of community that is second to none. All of this is combined with a “business
friendly” approach that encourages new ventures and expansions.
For more about Branford, visit www.branford-ct.gov.
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© MIKE ZAKHAROV | DREAMSTIME.COM
tions, but also making rapid changed due
to market shifts as needed. Lean operations are very light at the top, with authority delegated as far down as possible
and cross-functional skills and responsibilities promoted as much as possible.
Finding people willing and able to per-
form in this environment is crucial to success.
The information and support often
found in a manufacturer’s association is
also a valuable resource – although this
varies considerably from location to location. The most helpful organization
would be one that provides access to a
database of qualified suppliers in the region, although the candid opinions of individuals cannot be discounted either.
The database should identify products,
services, capabilities and adherence to industry quality standards. In some locations this service is provided through
multiple organizations such as the manufacturers association, economic development organizations, cluster groups or
professional organizations. Most likely,
no single organization will contain all the
data, contacts and professional qualifications in one location. The important takeaway, however, is that locations well
suited for advanced manufacturing often
have resources available (and if not located in a central location then the collaboration and inter-workings of the
various organizations are established).
Reliable Infrastructure
Infrastructure condition and adequacy,
both now and in the future, are important
and often overlooked. Reliable power and
the willingness of local utility providers
to ensure quality service may seem like a
given in most regions, until a transformer
blows due to downed power lines with
no back-up power source. Spending time
trying to fuel a back-up generator and
hoping you have enough power until service is restored is not the best use of a
plant manager’s time. Often, high-speed
internet service presence and reliability
is overlooked – until road construction
cuts a trunk line and inventory supply orders have to be done by cell phone. And
there are still places in the United States
that do not have (Continued on page 44)
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broadband internet service. Last but not
least is the importance of the transportation network. While major transportation
corridors for incoming just-in-time supplies and outgoing finished goods are
scrutinized heavily, secondary routes for
employee commutes are almost always
assumed to be adequate. The location of
the facility in relationship to employee
commute patterns may not seem important until half a shift is several hours late
due to a washed out bridge or inclement
weather.
Networks of Innovation
A sometimes difficult to measure factor, much less explain, is the concept of
centers of innovation. Advanced manufacturing environments are many times
the result, and creation, of the companies
themselves through policies and culture
that adhere to and promote innovation
and creativity. Although the policies and
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GEORGIA
Northwest Georgia
Prepares For Anticipated
Growth
In preparation for the expectant expansion of auto and solar industries in the coming years, the
Northwest Georgia Joint Development Authority is researching available land opportunities in order to support companies’ site location needs. Research is underway in the organization’s marketing region, which includes four counties: Dade, Walker, Catoosa and Chattooga. The authority
is preparing to support companies that require access to firms that have sited to the region in the
past few years, which includes: Volkswagen in Chattanooga, Tenn., and Wacker Chemie AG in
Cleveland, Tenn. The two $1 billion investments by these German manufacturers are located
within an hour commute of the northwest Georgia region. For complete details about the business
opportunities in northwest Georgia, visit www.nwgajda.com.
culture are within the organization, it is
equally important they exist in the region
as well. In some instances there may be a
cluster of industries with similar operations and techniques that foster this en-
vironment, such as companies that are
highly technical or have extensive research and development capabilities. In
other locations, innovation may stem
from the
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PHOTO COURTESY OF GF AGIE CHARMILLES
presence of a college or a university –
provided that the educational institution
is outward-focused and collaborative as
opposed to being inward-focused and
shut off. Even two-year technical schools
that work extensively with industry in a
problem solving mode is meaningful.
Forward-thinking local and regional government agencies that understand the
need to govern effectively and will take
unique approaches to promote and/or preserve economic development and prosperity for the region are yet another
example. In the best of all worlds, these
organizations are all present, work together, and are in perfect harmony. The
reality is that they are usually willing, but
need proactive guidance and beseeching
to come to a meeting of the minds.
Success is Not Accidental
The realities of the economic environment have fueled the steady migration of
the United States industry towards advanced manufacturing practices over the
last two decades. The natural evolution
of free market systems virtually assures
that certain supplies and components will
be produced in the lowest cost location –
which means some off-shoring is inevitable to remain cost-competitive possible. In contrast, the low-cost location is
also the place where utilization of advanced manufacturing technology is embraced and supported through policies
and actions that support and value it.
Some would characterize the loss of
manufacturing jobs in the United States
to a failure of policies at the local, state
and even the federal level to create an environment where increased competition
is based on technology, innovation and
efficiency – not simply low wages and
incentives that focus only on non-valueadded operating cost efficiencies. This is
a difficult argument to counter in general
from a macro-perspective. Still, there are
regions and communities that are prospering and growing and have weathered
the economic recession fairly well. This
is no accident. T&ID
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Effective Factors on Advanced
Manufacturing Technology
Implementation Performance:
http://scialert.net/fulltext/?doi=jas.2010.
1229.1242&org=11
TRADE & INDUSTRY DEVELOPMENT • SEPTEMBER/OCTOBER 2010