by Stephen Gold
Two measures commonly used by the government to measure manufacturing’s overall impact on society are badly underestimating the impact of that critical sector. One is the proportion of gross domestic product for which manufacturing accounts. The other is the “multiplier effect,” which measures the impact on other industries from an increase in economic activity by a specific industry.
Official national statistics state that manufacturing’s proportion of GDP— its annual value-added divided by the value of all goods and services produced in the country—stands at about 11%. The U.S. Department of Commerce finds the total requirement manufacturing multiplier is around 1.4.
Both figures grossly understate manufacturing’s impact. By a long shot. Intuitively, we should know this—contemporary Americans are surrounded by and completely reliant on thousands upon thousands of manufactured goods, whether we’re working, eating, driving, flying, sleeping, playing, or relaxing. Judging by the sheer volume of stuff in our lives, how could manufacturing represent only a tenth of the economy?
It doesn’t. New research by MAPI Foundation Chief Economist Dan Meckstroth, using analysis of national input–output tables by Interindustry Forecasting (Inforum) at the University of Maryland, shows manufacturing’s total value chain actually accounts for about one-third of U.S. GDP, or three times the impact that the narrow official data suggest. Moreover, manufacturing’s multiplier is 3.6, also nearly three times as high as the simplistic estimates; we fi that every $1.00 of manufacturing value-added generates $3.60 of value-added elsewhere
Why is the government’s estimate so misleading?
For one thing, there are several inaccuracies, such as including fiinal sales of imports and some double-counting of transactions in the Commerce Department calculations.
More substantively, official manufacturing statistics are based narrowly on information collected at the “establishment”—or plant—level, as opposed to the “fi level. That means numerous manufacturing-related activities, such as corporate management, R&D, and logistics operations, are not included within the NAICS codes for manufacturing (31-33) when they are located separate from plants. For example, Commerce classified the work of senior executives in Briggs & Stratton’s headquarters as “management of companies and enterprises” (NAICS 55), Caterpillar’s R&D centers as “professional, scientific and technical services” (NAICS 54), and Stanley Black & Decker’s warehouses as “wholesale trade” (NAICS 42). The MAPI Foundation’s approach places the value of these firm-related activities back into the calculus of manufacturing’s total economic clout.
Yet another reason the government measure is misrepresentative: it captures only the creation of upstream value, including the processing of raw materials and intermediate inputs, and the production process. The manufacturing value stream is actually much broader, encompassing the associated activities in both the upstream supply chain and the downstream sales chain of manufacturing goods sold to final demand.
Even this definition of the value stream is incomplete. Final demand goods are those destined for an end user; they are either exports or goods sold to households, businesses, and demand goods do not include intermediate inputs for nonmanufacturing supply chains, such as gypsum and cement bound for the construction supply chain or chemical fertilizer used in the agriculture supply chain. Adding this data provides a more holistic and accurate perspective, because but for the production of all of these manufactured goods, no value would be generated in manufacturing’s upstream supply chain and downstream sales chain, or in supply chains of other sectors.
Let’s take a closer look at this new, improved analysis of manufacturing’s total value chain.
Start with the upstream activities associated with manufactured goods for final demand: these include the value of all the intermediate inputs purchased for use in production, such as raw materials, process inputs, and services. As Meckstroth observes, car manufacturers need steel to make cars, the steel manufacturers need coal and iron ore to make steel, and all the raw materials need to be transported from place to place. The value-added of all intermediate inputs upstream of the factory that go into manufactured goods destined for final demand is $3.1 trillion.
As the goods move downstream from the factory loading dock through the sales chain, add in the value derived in the transportation, wholesaling, and retailing of the goods. More value is generated in related services such as rental, leasing, insurance, professional services, maintenance, and repair. Combine the value of all these downstream activities with the producers’ value and throw in the value derived from manufactured imports, and this makes up the manufactured goods sales chain. The MAPI Foundation estimates that downstream added value on manufacturing goods for final demand totals $3.6 trillion.
Combined, the (up and down) value stream of manufactured goods for final demand equals $6.7 trillion.
Again, this reflects only the value chain for goods made for end users such as households and businesses. Goods designated for nonmanufacturing supply chains provide an additional $510 billion in value-added to manufacturing’s total value chain.
In all, manufacturing’s total impact on the economy is 32% of GDP.
In other words, the manufacturing footprint is about a third of the economy, not a tenth. Policymakers need to sit up and take notice of who’s really driving our economy.
Friday, March 11, 2016
Workforce Development - STEM vs. Humanities?
States Increasingly Aim to Cut Humanities Funding, Boost STEM
The New York (NY) Times reports that some state government officials around the country, frustrated with rising student loan debt, tuition costs, and the lack of skilled workers, want to reward colleges that turn out majors in STEM fields — science, technology, engineering, and math — and reduce funding for humanities education. Proponents of such measures cite the lifetime earnings gap between humanities and STEM majors as the reason for passing the policies. Opponents argue that success in the workplace requires soft skills gained through liberal-arts studies and that the government can’t and shouldn’t try to predict what jobs will be required in the future.
Industry Stresses Development of Skilled Workers Who Are Job-ready at Graduation.
In a commentary for IndustryWeek, Bob Graff, an executive with Yaskawa America’s Motoman Robotics division, wrote of the challenges manufacturers face in preparing high-school, vocational, and college students “with the certifications and skills to be productive upon graduation.” A key element of this effort, he explained, is the industry’s focus on helping shape curricula in STEM fields “to meet the growing demand for technical careers in automation,” and, in turn, skilled manufacturing jobs. Graff cited a study by Deloitte and the Manufacturing Institute concluding that 60% of the 3.4 million manufacturing jobs expected to be created over the next decade will be unfilled due to the shortage of skilled workers.
The New York (NY) Times reports that some state government officials around the country, frustrated with rising student loan debt, tuition costs, and the lack of skilled workers, want to reward colleges that turn out majors in STEM fields — science, technology, engineering, and math — and reduce funding for humanities education. Proponents of such measures cite the lifetime earnings gap between humanities and STEM majors as the reason for passing the policies. Opponents argue that success in the workplace requires soft skills gained through liberal-arts studies and that the government can’t and shouldn’t try to predict what jobs will be required in the future.
Industry Stresses Development of Skilled Workers Who Are Job-ready at Graduation.
In a commentary for IndustryWeek, Bob Graff, an executive with Yaskawa America’s Motoman Robotics division, wrote of the challenges manufacturers face in preparing high-school, vocational, and college students “with the certifications and skills to be productive upon graduation.” A key element of this effort, he explained, is the industry’s focus on helping shape curricula in STEM fields “to meet the growing demand for technical careers in automation,” and, in turn, skilled manufacturing jobs. Graff cited a study by Deloitte and the Manufacturing Institute concluding that 60% of the 3.4 million manufacturing jobs expected to be created over the next decade will be unfilled due to the shortage of skilled workers.
Associates' Corner -- Vergason Technology, Inc.
Founded by Gary Vergason in 1986, Vergason Technology, Inc. (VTI) grew from a fledgling toll coating supplier to an internationally recognized leader in vacuum coatings and equipment. The company started in a 500 square foot addition on the side of Gary’s parents' barn and has grown to a 37,000 square foot corporate headquarters and manufacturing facility located in Van Etten, NY.
Innovation has always been a strength for VTI. In 1988, VTI delivered the fi of several bone implant coating systems and the world’s fi commercial PressSide® Rapid Cycle Metallizing System was built in 1989. VTI’s cathodic arc patent pioneered the discrete anode, switched arc arena in 1991. The company’s patented CatArc® technology is used today to supply high quality, low temperature thin fi coatings and equipment for substrates demanding critical temperature control to maintain high hardness, uniform thickness control and dimensional stability.
The company’s products and services incorporate thermal evaporation, cathodic arc vapor deposition, magnetron sputtering and plasma-enhanced chemical vapor deposition to produce a wide variety of tribological, decorative, reflective and electronic shielding coatings.
VTI’s specialized coatings include SuperChrome® PVD Coating, a safe alternative for decorative chrome plating; NexSteel® Decorative Coating, a popular alternative for traditional brushed stainless steel and BlackCat® Tactical Coating, a tough, non-reflective black finish featuring a thermal stability rating of 1700°F.
With over 200 installed systems worldwide, VTI has supplied equipment for many types of applications and industries including automotive, industrial, and commercial lighting; solar and photovoltaic applications; reflective coatings; coatings for RFI, EMI, and ESD shielding; decorative coatings; ceramic wear coatings; tactical coatings and corrosion resistant coatings.
Gary feels the one aspect that has remained a constant over the past 30 years, is VTI’s dedication to world class service and results every time. With technology constantly on the move and vacuum coating being the coating preference for many applications, he is excited to see what the future holds.
VTI is certifi to the ISO 9001:2008 standard, a milestone the company achieved with assistance from AM&T. VTI is also ITAR registered and RoHS compliant. For more information, visit www.vergason.com
Innovation has always been a strength for VTI. In 1988, VTI delivered the fi of several bone implant coating systems and the world’s fi commercial PressSide® Rapid Cycle Metallizing System was built in 1989. VTI’s cathodic arc patent pioneered the discrete anode, switched arc arena in 1991. The company’s patented CatArc® technology is used today to supply high quality, low temperature thin fi coatings and equipment for substrates demanding critical temperature control to maintain high hardness, uniform thickness control and dimensional stability.
The company’s products and services incorporate thermal evaporation, cathodic arc vapor deposition, magnetron sputtering and plasma-enhanced chemical vapor deposition to produce a wide variety of tribological, decorative, reflective and electronic shielding coatings.
VTI’s specialized coatings include SuperChrome® PVD Coating, a safe alternative for decorative chrome plating; NexSteel® Decorative Coating, a popular alternative for traditional brushed stainless steel and BlackCat® Tactical Coating, a tough, non-reflective black finish featuring a thermal stability rating of 1700°F.
With over 200 installed systems worldwide, VTI has supplied equipment for many types of applications and industries including automotive, industrial, and commercial lighting; solar and photovoltaic applications; reflective coatings; coatings for RFI, EMI, and ESD shielding; decorative coatings; ceramic wear coatings; tactical coatings and corrosion resistant coatings.
Gary feels the one aspect that has remained a constant over the past 30 years, is VTI’s dedication to world class service and results every time. With technology constantly on the move and vacuum coating being the coating preference for many applications, he is excited to see what the future holds.
VTI is certifi to the ISO 9001:2008 standard, a milestone the company achieved with assistance from AM&T. VTI is also ITAR registered and RoHS compliant. For more information, visit www.vergason.com
Associates' Corner -- Buckingham Manufacturing
Linemen and arborists throughout the world trust the
Buckingham name to help them do their jobs safely and efficiency. Serving their
customers for over 120 years, Buckingham has continued its vision leading the
industry in product innovations, manufacturing the highest quality products,
and creating customized products to meet our customers’ needs.
Buckingham is ISO 17025-2005 Accredited, ISO 9001:2008
Certified and is a CSA Group Qualified Testing Facility. Buckingham designs and
manufactures climbing and fall protection equipment specifically designed for
the electric utility, telecommunications, wireless telecom, cable and professional
arborist markets. Buckingham follows all applicable standards including OSHA,
ANSI, ASTM, CSA and CE requirements pertaining to their product lines.
Established in 1896 under the name Stephen’s Company, the fi has since grown from producing just
pole climbers to manufacturing a vast array of new product lines, and improving
on the originals. The company has since changed its name to what is now known
as Buckingham Manufacturing Co., Inc.
Under the management of H. Andrew Batty Jr. and James Pennefeather,
Buckingham continues to expand product lines, sales and distribution systems
and introduces new manufacturing technology. This year, the company has given
their look an update and debuted a new corporate logo. This logo was designed
to be modern and sleek, while also preserving Buckingham’s great history. They
have also implemented many other great changes to provide the customers more
product knowledge including new videos available on YouTube, a new website, and
an increased presence on social media.
Buckingham is also hitting the road with
a new lineman’s rodeo trailer that will be traveling to tradeshows and rodeos
all over the country. Buckingham understands that its on-going success is
dependent on its loyal customer base and the continued addition of new and
satisfied customers. With Buckingham’s tenured customer service staff,
implementing these new social media strategies and visiting these shows will allow
Buckingham to connect with valued customers more than ever before.
For more info, contact Jim Nichols at 607-773-2400 or visit
www.buckinghammfg.com
Friday, February 5, 2016
Two Critical Things All Leaders Need to Do
By: Natalie Wolfson, Ph.D.
Help employees succeed in a perpetually changing world by encouraging resiliency and agility. Here’s how.
A constantly changing workplace is guaranteed but there are very specific things leaders can do to help employees be prepared for this change. Learning how to treat employees as individuals is the first step.
Business owners and leaders can help their employees both to create positive change (what we call agility) and respond productively to change forced upon them (resiliency). Here are some tips to follow.
1. Encourage Greater Resiliency Among Employees
To do this, you need to:
Be a Good Role Model. A leader acts with resiliency him/herself, displays confidence, elicits respect and pride in his subordinates, and looks beyond his own interests. Basically, a leader models the behavior he/she wants to see.
People have what neuroscientists call “mirror neurons” – we activate the same neurocircuitry in our own brains when observing another as we would if we were the ones actually performing the behavior. Mirror neurons are critical for learning new skills by imitation. So, a great way to build employee resiliency is simply by modeling resilient behaviors yourself. Examples include remaining calm in the face of unexpected shifts in demands, setting ambitious but achievable goals for the company, and asking questions freely and openly.
Stimulate Your People. A leader provides intellectual and creative stimulation. He or she demonstrates effective problem-solving by challenging assumptions and seeking different perspectives. A leader also presents crises as challenges that can be overcome. In this way, you encourage thoughtful solutions to problems rather than hurried, stress-driven ones. Examples include asking questions in different ways, seeking unique perspectives, and framing crises as opportunities for development and challenges that can be overcome.
Know Your People. A leader considers each of his or her employees individually so they feel valued and respected according to his or her unique needs. Examples include asking employees questions about themselves, remembering unique details about each employee, and behaving with versatility across employees (i.e. changing your interpersonal approach based on the needs of the individual).
2. Encourage Greater Agility & Innovation Among Employees
To do this, practice the following:
Beware of the “Negativity Bias.” Recognize that people demonstrate a negative bias toward creativity (versus practicality) when they experience uncertainty. This bias against creativity can interfere with someone’s ability to recognize a creative idea. Once you recognize this bias, you can prepare for and counteract it.
Make Innovation a Job Requirement. Understand that innovation happens with diversity and conflict. You can encourage innovation by giving employees time to work on their own ideas and projects. You can also be a better leader in this area by hiring people who disagree with you, drawing attention to differences in opinion and encouraging active debates.
Give Employees Freedom. Employees of the future need autonomy over the means, not necessarily the ends. In other words, they need some freedom to determine how they approach tasks -- the process, not the end goal. Managers tend to mismanage freedom by changing goals frequently or failing to define them clearly.
Whatever the future holds, one thing is certain, and that is a constantly changing workplace. By encouraging a resilient and agile workplace, you are creating an environment that boosts individual productivity and organizational performance. Happy employees are productive employees, and great leadership is the only way to get there.
See this and other newsletter articles at http://amt-mep.org/files/9114/5468/2424/2016-02.pdf
Visit our website at http://www.amt-mep.org
Help employees succeed in a perpetually changing world by encouraging resiliency and agility. Here’s how.
A constantly changing workplace is guaranteed but there are very specific things leaders can do to help employees be prepared for this change. Learning how to treat employees as individuals is the first step.
Business owners and leaders can help their employees both to create positive change (what we call agility) and respond productively to change forced upon them (resiliency). Here are some tips to follow.
1. Encourage Greater Resiliency Among Employees
To do this, you need to:
Be a Good Role Model. A leader acts with resiliency him/herself, displays confidence, elicits respect and pride in his subordinates, and looks beyond his own interests. Basically, a leader models the behavior he/she wants to see.
People have what neuroscientists call “mirror neurons” – we activate the same neurocircuitry in our own brains when observing another as we would if we were the ones actually performing the behavior. Mirror neurons are critical for learning new skills by imitation. So, a great way to build employee resiliency is simply by modeling resilient behaviors yourself. Examples include remaining calm in the face of unexpected shifts in demands, setting ambitious but achievable goals for the company, and asking questions freely and openly.
Stimulate Your People. A leader provides intellectual and creative stimulation. He or she demonstrates effective problem-solving by challenging assumptions and seeking different perspectives. A leader also presents crises as challenges that can be overcome. In this way, you encourage thoughtful solutions to problems rather than hurried, stress-driven ones. Examples include asking questions in different ways, seeking unique perspectives, and framing crises as opportunities for development and challenges that can be overcome.
Know Your People. A leader considers each of his or her employees individually so they feel valued and respected according to his or her unique needs. Examples include asking employees questions about themselves, remembering unique details about each employee, and behaving with versatility across employees (i.e. changing your interpersonal approach based on the needs of the individual).
2. Encourage Greater Agility & Innovation Among Employees
To do this, practice the following:
Beware of the “Negativity Bias.” Recognize that people demonstrate a negative bias toward creativity (versus practicality) when they experience uncertainty. This bias against creativity can interfere with someone’s ability to recognize a creative idea. Once you recognize this bias, you can prepare for and counteract it.
Make Innovation a Job Requirement. Understand that innovation happens with diversity and conflict. You can encourage innovation by giving employees time to work on their own ideas and projects. You can also be a better leader in this area by hiring people who disagree with you, drawing attention to differences in opinion and encouraging active debates.
Give Employees Freedom. Employees of the future need autonomy over the means, not necessarily the ends. In other words, they need some freedom to determine how they approach tasks -- the process, not the end goal. Managers tend to mismanage freedom by changing goals frequently or failing to define them clearly.
Whatever the future holds, one thing is certain, and that is a constantly changing workplace. By encouraging a resilient and agile workplace, you are creating an environment that boosts individual productivity and organizational performance. Happy employees are productive employees, and great leadership is the only way to get there.
See this and other newsletter articles at http://amt-mep.org/files/9114/5468/2424/2016-02.pdf
Visit our website at http://www.amt-mep.org
Some Recent AM&T Activities
Some Recent AM&T Activities to Promote Innovation, Growth & Profitability of Manufacturers in the Southern Tier
See this and other newsletter articles at http://amt-mep.org/files/9114/5468/2424/2016-02.pdf
Visit our website at http://www.amt-mep.org
- Conducted (2) one-hour Lean Thinking training sessions for DCMO BOCES, who hosted a successful mentor and career day at the SUNY Oneonta campus. Approximately 40 middle school male students attended “It’s a Guy Thing” to develop career goals and to connect with mentors.
- Conducted a five-day “Planning and Scheduling” value stream mapping event with a Job Shop. A team of eight people create a process that when fully implemented, will improve product flow and ultimately improve on-time deliveries, and reduce wastes.
- Completed a five-day 5S and Visual Workplace event. The team created a workplace where everything is visually clear and controlled. As a result, the workplace will produce fewer defects, less waste, fewer injuries, and fewer breakdowns. These improvements will translate into lower costs and improved quality.
- Conducted a one-day Lean Policy Deployment session, which is a management process that aligns—both vertically and horizontally—an organization’s functions and activities with its strategic objectives. A specific plan was developed with precise goals, actions, timelines, responsibilities, and measures.
- Conducted TWI Job Instruction workshop at a company located in Elmira, NY. Ten (10) employees were trained in employee relations to build their supervisory skills.
- Conducted a one-day Introduction to Value Stream Mapping workshop at a company located in Elmira, NY. Ten (10) employees were trained in how to create value stream maps for a product or process family, identify the waste in the value stream, and implement plans to reduce or eliminate the waste.
- Conducted a one-day Basic Project Management workshop at a company located in Elmira, NY. Twenty (20) employees were trained in basic project management methods.
- Conducted an AS9100c Surveillance Assessment Readiness Review at a company located in Endicott, NY. A summary report was prepared and their Quality Management System was deemed compliant and ready for assessment.
- Provided quality support to a company located in Ithaca, NY. Attended their annual Quality Management Review and provided feedback on their presentation and documentation.
- Conducted an ISO 9001 Internal Audit at a company located in Groton, NY. No (0) non-conformances were noted. An opportunity for improvement was included in a summary report and their Quality Management System was deemed compliant and effective.
- Conducted a Lean Review at a company located in Hornell, NY. Progress was assessed and they have achieved 50% reduction in lead-time for their High Voltage Transformer products.
- Conducted an ISO 9001 Internal Audit at a company located in Stamford, NY. Only one (1) non-conformance was noted and a summary report was delivered. Their Quality Management System continues to be compliant and effective.
- Conducted an ISO 17025 Internal Audit at a company located in Ithaca, NY. Non-conformances were noted and a summary report was prepared.
- Conducted ISO 17025 Witness Tests at a company located in Ithaca, NY. Six (6) laboratory test procedures were witnessed and there were no (0) non-conformances. A summary report was prepared and all witnessed tests were deemed compliant with current ASTM standards.
- Conducted a TWI Job Method Improvement workshop at a company located in Elmira, NY. Ten (10) employees were trained in process improvement methods to build their supervisory skills.
- Conducted an AS9100c Internal Audit at a company located in Elmira, NY. A summary report was prepared and their Quality Management System was deemed compliant and ready for registrar surveillance assessment in February 2016.
- Completed Exemplar Global ISO 14001:2015 transition course & assessment exam. Received updated certificate.
- Conducted a three-day Value Stream Mapping Workshop at a company located in Endicott, NY. Five (5) employees were trained on the VSM lean methods and mapped the value stream for a product family. Upon completion of the workshop, the team had a plan to achieve an estimated 18% reduction in lead-time for the product family.
See this and other newsletter articles at http://amt-mep.org/files/9114/5468/2424/2016-02.pdf
Visit our website at http://www.amt-mep.org
Sound-bites: Ideas for Leading Effectively
By: Art Petty
See this and other newsletter articles at http://amt-mep.org/files/9114/5468/2424/2016-02.pdf
Visit our website at http://www.amt-mep.org
- Success as a leader is built one encounter at a time. Make certain to make each one count.
- Before you start your day, prepare your attitude for success. Focus on what impact you want to have on others today and then live it.
- Leading others in periods of uncertainty requires an extra-level of care and handling. Your role is to create a safe zone. If you don’t, fear stifles creativity and problem-solving.
- Just because someone gives you feedback doesn’t mean it’s valuable. Always consider the source and the intent.
- When assuming responsibility to lead a new team (a team that is new to you), resist the urge to tell. Instead, observe and ask. You’ll have ample time to influence the team.
- What are you reading this week or month? What are you planning on reading? If you’re not reading and learning, you’re moving backwards at the speed of change.
- Treat the professional development of your team members like a series of video-game level up situations. New challenges, new opportunities to strive, fail, learn and ultimately succeed. Mix in ample real-time feedback and you’re doing your part!
- It’s Leader AND Manager. No one wants a leader who cannot manage or a manager who cannot lead. Learn to do both.
See this and other newsletter articles at http://amt-mep.org/files/9114/5468/2424/2016-02.pdf
Visit our website at http://www.amt-mep.org
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