Committing a mistake when choosing a manufacturing site can prove to be very costly for the given business in many aspects. We will discuss six mistakes that every business should avoid while picking a manufacturing location:

1. Starting Work without Getting Consensus on Search Parameters

   Oftentimes, organizations commit a mistake in choosing a manufacturing location right at the beginning of the process without proper specifications laid out. This mistake materializes when site searching teams start their work in the absence of a consensus of what the company is actually looking for in the new site. Any selection work of a manufacturing location involves a set of search parameters that guide the searching team in the right direction for picking the best possible site and without these clearly laid out, site location could be off the mark.

   However, it is vital to develop a consensus among all the decision-makers and stakeholders about what should be laid out in terms of the search parameters. From coordinating all parts including HR issues and environment to construction cost concerns, everything must be addressed in that document and has the seal of approval of all the concerned parties. Developing this agreement before starting the search will make sure the site searching team doesn’t end up assessing and shortlisting suboptimal locations. Such an exercise will only result in wasting time, money, and other resources.

2. Picking Site Based on Offered Incentives Rather than Operational Requirements

   Local governments and communities offer incentives to businesses for setting up their manufacturing facilities in their jurisdictions. These incentive packages can serve as a tiebreaker when you can’t decide between two manufacturing sites. However, giving more weight to incentives instead of operational requirements is something that every business should avoid while picking a manufacturing site.

   For example, you may choose a manufacturing site based on its low and lenient tax details. However, if that site doesn’t offer you the best in terms of your logistical requirements and labor needs, the tax benefits won’t make this site selection a good investment in the long run.

3. Choosing a Site for Current Operational Needs
   Many times corporations just consider their current operational requirements when choosing a manufacturing site. While it is important to keep your current operational requirements at the top of the list, it is equally necessary to factor in your expansion plans and future roadmaps. Building a manufacturing facility from scratch entails a lot of groundwork and investment. Therefore, make sure that it is not going to become insufficient or redundant in the next five or ten years.

   These are a couple of things you can do to make sure a new manufacturing site is not just meant to fulfill your existing operational requirements.

   • Make sure the location you choose will remain business-friendly for a long time.
   • Check the economic forecast of the region and how its industrial and manufacturing landscape is going to perform in the next few decades.
   • Make sure there is enough acreage and technological capacity on the site to accommodate any of your expansion plans.
4. Ending Up with an Option with no Alternatives

   When searching for a manufacturing location, businesses should always go for two sites that fulfill all the parameters set in the beginning. These sites should meet all the requirements set forth in the initial phases and be an optimal choice in the end. Limiting yourself to just one site can leave you stuck in the end if your one and only choice falls through. Also, having more than one location gives you bargaining and negotiating power between the various locations and can help broker the best deal.

5. Not Fully Understanding Topographical and Geotechnical Issues

   Costs, logistics, and incentives are not the only elements to factor in when choosing a manufacturing location. A business must have experts on board that can factor in the geotechnical, topographical, climate, environmental, and archeological factors as well. Factoring in all these things will answer many important questions. For instance, you will find out:

   • How to approach wastewater treatment at that particular location?
   • What are the environmental protocols and compliance measures you will need to follow to set up wastewater treatment of your manufacturing facility?
   • What are the potential locations of freshwater wetlands?
   • Is the site suitable for 12-month operations?
   • Is the site in the floodplain?

   Not finding answers to all these and similar questions can weaken your basis for selecting any particular site for your manufacturing facility.

6. Failing to Maintain Confidentiality

   Site searching for a new manufacturing facility is a business secret. You don’t want to let your competitors know about your future/ expansion/ reorganization plans when they are still in the nascent phase. This makes the entire project of searching and selecting a manufacturing location a confidential affair. Nonetheless, very few businesses manage to maintain that confidentiality.

   Most businesses fail to maintain that confidentiality because:

7. They use actual titles and names instead of using codes for the project
8. They are operating without stricter NDAs (Non-Disclosure Agreements)
9. No organizational hierarchy is set for information sharing
   Bottom Line

By being mindful of these six mistakes in choosing a manufacturing location, a company can manage to have a successful beginning for its new business plans. On the other hand, if companies commit these mistakes in picking the manufacturing site, they will not just fail in leveraging this decision (i.e. setting up a manufacturing facility). They can also lose millions of dollars in the opportunity cost in the long run. Moreover, if the manufacturing facility is a part of an expansion or relocation plan, the bad site selection will neutralize any potential competitive edge of this move.

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Over the years, the manufacturing industry has braved various threats and risks and come out stronger and secure. It is an ongoing exercise, and the industry is still facing many existing and emerging risks. Here, I will give you an overview of six risks that the manufacturing industry is countering all around the world.

Widening Skill Gap

Widening the skill gap is the most imminent threat the manufacturing industry is facing, especially in the US and many other first-world countries. A 2018 study by Deloitte forecasts that there will be around 2.4 million positions unfilled in the manufacturing sectors between 2018 and 2028 in the US.

The reason behind this widening skill gap is very simple: millennials and Generation Z don’t regard the manufacturing sector as a good career choice. They are skeptical of the job stability and growth that the sector has to offer.

On top of that, the alternative presented by the tech and service sector with the promise of good growth and competitive salaries further shade the reputation of the manufacturing industry. In the meanwhile, seasoned skilled workers are aging and retiring. In view of all this, it is only logical that the manufacturing sector is going through a widening skill gap.
To bridge this gap caused by a lack of human resources, local manufacturing industries and groups have to go old school. They need to partner with local governments and educational institutes to commence apprenticeship programs for the youth. Also, they need to change their outlook, improve the work environment, and market themselves in a better light since they are up against the “cool” tech sector.

Product Recalls

Rules and regulations governing manufacturing processes have become quite stringent in the last couple of decades. Moreover, non-compliance with regulatory directives has become an unforgivable sin for manufacturing facilities. The unbending manufacturing regulations and swift action against their non-compliance have increased the instances of a product recall. A product recall is a major disrupter in any manufacturing environment. It can mess up the entire supply chain while costing a lot to the affected company and or facility. Besides direct monetary losses, frequent product recalls can also destroy the bottom line by inflicting outlays in terms of future sales loss, reputation damage, regulatory fines, and litigation expenses. The product recalls in the food industry alone cost up to $10 billion in both direct and indirect losses. The manufacturing sector has to be more diligent with the implementation of relevant directives, especially if they are supplying overseas contractors. They also need to employ real-time traceability to quickly identify and remove defective inventory from the supply chain.

Security of Smart Facilities

The manufacturing sector is gradually moving towards a smart future. It has been estimated that manufacturers will spend north of $250 billion on IoT technologies by the end of this year. While smart facilities will ensure quicker turnaround, streamlined supply chain, and intuitive quality control, they will be vulnerable to cyber-attacks. A potent cyber intrusion can bring a smart manufacturing facility to a screeching halt. Manufacturers adopting smart technology need to invest in improving cybersecurity in the same proportion for providing sufficient cover to their smart infrastructure.

Regularizing 3D Printing

3D printing can be a gamechanger for the manufacturing sector in both senses. On the one hand, it can boost the production rate and cut down costs. On the other hand, it can promote counterfeiting and poor quality production. Also, a manufacturing facility may have to face false liability claims because criminals will replicate counterfeit goods by leveraging 3D printing. They can make proprietary products at lower price points but with questionable quality.

Intellectual Property (IP) Protection

Protecting intellectual property has always been a challenge for the manufacturing industry. Tracking IP thefts and copyright infringements become impossible, especially when the supply chain and target market expand. As per one estimate, it has been estimated that IP theft in the US, which includes patents, trademarks, trade secrets, and copyrights, cost hundreds of billions of $$ to the economy.

Protecting intellectual property is certainly not a mean task. However, a manufacturing facility can devise a more robust and effective IP protection regimen with strict scrutiny of its supply chain. It includes a more detailed identification and validation process for suppliers and improved end-to-end visibility. Minimal reliance on outsourcing entities is also essential to minimize the chances of IP theft.

Pest Problem

For homeowners, a pest might not be more than mere nuisance. However, a manufacturing facility has to pay high costs if it fails to curb this problem before it blows out of proportion. Pests can’t just ruin the reputation of a business but also stop the manufacturing process. It is common for facilities to stop the entire manufacturing plant because a rodent got stuck in the blower.

In many cases, product recalls occur because the traces of pests are found in a given product. The constant presence of pests can infest the manufacturing facility with diseases that are not good for the employees working there. To get rid of the pest problem and make sure it doesn’t occur, a manufacturing facility must get its premises fumigated and disinfected by any experienced pest control service.

With more diligence, strict quality measures, and continuous technological integration and adaptation, manufacturing facilities can take care of all the risks discussed here except for widening skill gap. It is one thing not in direct control of the manufacturing industry. A large-scale manufacturing revival tied to various economic factors and government policies is needed to address the skill gap issue and should be a top priority for all parties.

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Powering Your Manufacturing Process with Renewable Energy

For an owner of a manufacturing facility, this requirement may sound like another “easier said than done” advice given by armchair experts. Yes, powering an entire manufacturing process from renewable energy is not an easy task. However, it has become exceedingly easier in the last decade or so. We now have more efficient ways of harnessing and storing renewable energy. Also, there are renewable energies beyond hard-to-harness options. For instance, a manufacturing process running on hydroelectricity is also essentially using renewable energy with minimal greenhouse emissions. It is also vital for manufacturing facilities to turn to renewable energy because statements like “it is impossible to run manufacturing on clean energy” doesn’t stand up anymore after various organizations have set multiple precedents. I would like to share an example of Tesla’s Gigafactory here. This factory spans 10 million square feet and is responsible for making batteries for half a million electric cars annually. Solar and geothermal energy sources are entirely running this huge manufacturing facility. If a manufacturing plant as large as Gigafactory can take care of its operations through renewable energy, small and mid-sized facilities can surely think about bringing about this green transformation.

The post A Short Guide on Turning Your Manufacturing Process Eco-Friendly appeared first on Newton Search.

But first, a little backstory: The Bureau of Economic Analysis recently reported that for the first quarter of 2018, manufacturing output in the U.S. reached an all-time record high of more than $2 trillion. That was actually the third quarter in a row (beginning in 2017:Q3) that U.S.Manufacturing reached record-high levels, surpassing the previous record-high level of U.S. factory output established back in 2007:Q3. That was before America’s and other countries’ manufacturing sectors were impacted by the Recession.

We all know, despite the views from numerous brokers on Wall Street and elsewhere, that the only finances and economic outlook that matters is yours. Since it is clear that Manufacturers wield the power and influence over so many of us, what is and where does the current state of Manufacturing leave most Americans? Again, depending on the reference, while there are possibly as much as 13% fewer jobs in the Manufacturing sector today than there had been in 2007, productivity has increased exponentially. This is due to numerous industries coming on line that have incorporated the latest technological advances, such as robotics into their processes.

A Wide Range of Industries

These industries, which range from automotive to pharmaceuticals, from delicate and precise calibration equipment and gages, to pianos, to giant earth movers, require fewer workers to produce greater output with greater accuracy and quality control. However, the demand for these technologies has shifted employment opportunities to these Manufacturing sectors. The need for more skilled workers has increased enrollment at brick and mortar colleges and universities as well as online schools.

There has always been strength in numbers. The aging of the largest population segment, the Boomers, has expanded the need for medical facilities, hospitals, practitioners, and specialized medical equipment. Review that last sentence and you’ll see just how much influence Manufacturing has on that scenario’s successful outcomes!

Numbers do not lie. If you have a hard time accepting the analogy laid out in the previous paragraphs, chew on this: Over the past five years the American Manufacturing sector has employed 12 million workers. But more importantly, it generated an additional 17.1 million indirect jobs. That figure makes Manufacturing the largest multiplier of any economic sector since each dollar’s worth of manufactured goods generates $1.40 in output from other sectors of the economy.

Perhaps most important Manufacturing metric may be the higher wages it provides for blue-collar (skilled but not educated) workers. According to recent Bureau of Labor Statistics data, jobs at goods-producing industries pay an average of $56,799 a year on average which is significantly more than other working-class fields like healthcare and education (averaging $45,676 annually) and leisure and hospitality ($20,879). Oh now you wish you had taken shop class in high school!

Another recent study of almost 400 cities, towns, and regions in the United States has helped to pinpoint where U.S. Manufacturing is thriving today.

• According to Moody’s Analytics, the San Francisco, CA area experienced the biggest gain in jobs and household income as a result, which surged by almost 14%. Industries are largely technology,engineering, and construction.
• San Jose, CA, which is part of Silicon Valley, enjoyed the second-largest job/income increases, at about 13% percent
• Technology positions influenced population increases in Austin, TX, where the jobs/income rose about 9%.

Where the Manufacturing Jobs Have Gone

What is interesting to note about the cities cited above is that two of them are not part of regional ‘tech hubs’ but off shoots. And where the jobs go, people seeking employment opportunities soon follow.

• The majority of U.S. cities/regions with the largest job/income gains are “tech hubs,” with concentrations of software architects, data analysts and cloud-computing engineers. These include: Denver, CO, Portland, OR, Provo, UT, and Raleigh, NC.
• Pittsburgh, PA realized a 6% gain in jobs/income thanks to increased technology and health care jobs.
• Oklahoma City, OK, where job/income are up by 5%, has benefited from oil and gas production, manufacturing, and refineries.
• FLA/USA: The state of Florida is booming thanks to ever-growing aerospace, aeronautics, and technology sectors that include NASA and Elon Musk’s SpaceX. And let’s not forget the hospitality industry’s inroads in and around the Orlando area. ‘Something to do with a mouse, the future…and now Hogwarts!

In a sad grace note of personal interest to this author, Rochester NY, which at one time led the nation in Manufacturing jobs/income placed at 70 in the top 100 manufacturing cities in the U.S.. This tumble can be traced to the loss of Eastman Kodak, the largest employer in the region. It also speaks to the rise of jobs and income increases elsewhere in the nation that are served by at least two major and different manufacturing industries. One trick pony towns, take note!

Historically, oppression has either destroyed empires or created diamonds. From this most recent economic downturn, we’ve seen that some long-time Manufacturing industry leaders fell by the wayside. Their loss negatively-impacted that region whose citizens either moved to another industry or out of the region entirely. These new industries were not like those they replaced. Instead, technology replaced old-time Manufacturing processes. The need for this technology created jobs elsewhere which boosted their associated regions associated. And so it goes. By remaining flexible and not only open to, but by embracing change, our Manufacturers, the American economy, and our Nation advances.

The post Top Manufacturing Industries That Are Thriving in Today’s Economy appeared first on Newton Search.

Since 1980, however, there has been a major decline in the number of manufacturing jobs in the States. Wikipedia estimates that up to ⅓ of the manufacturing positions disappeared over the first decade of this century. Also, while the economy continues to post steady gains, that few of these jobs have returned. Some of the reasons for slow growth in this sector could be the fact that technological advances, such as widespread use of robotics, have replaced the need for many skilled workers.

For example, this is particularly true for assembly line production, where computer-driven robotic machines produce, assemble, weld, and convey a product from start to completion. Another reason for the decline in American manufacturing jobs is competition from foreign markets such as China. Since its entry into the World Trade Organization (WTO) in 2001, competition from China has created a US. goods trade deficit (imports greater than exports) which, again according to Wikipedia, was approximately $350 billion in 2016.

Let’s begin with a list of the top industries (by revenue) currently fueling the American economy. These are:

• Petroleum
• Steel
• Automotive
• Aerospace
• Telecommunication
• Chemicals
• Electronic
• Food processing
• Consumer goods
• Lumber
• Mining

The United States is the world’s second largest manufacturer, the U.S.’s Q3 2016 industrial output (nominal GDP, annualized) was approximately $2.18 trillion. Adjusted for inflation and other factors, this output still lags behind 2007’s pre-recession peak. Still, these figures have been trending upward since 2010.

Here are the top manufactured products that Business Insider and The Bureau of Economic Analysis, an arm of the U.S. Department of Commerce, posted that during 2016, the U.S. exported $1,051 billion in manufactured goods and imported $1,920 billion, (a manufacturing goods deficit of $868 billion). Below are some of the metrics that comprised America’s $2.1 trillion Export Industry that year:

• Electrical Equipment: total revenue of $32.2 billion.
• Fabricated Metal Products: total revenue of $32.6 billion.
• Medical Equipment, Sporting Goods, Misc.: total revenue of $39.4 billion.
• Primary Metal: total revenue of $49.6 billion.
• Food: total revenue of $50.9 billion.
• Petroleum and Coal Products: total revenue of $50.9 billion.
• Transportation Equipment: total revenue of $252.0 billion.
• Chemicals: total revenue of $174.0 billion.
• Computers and Electronic Products: total revenue of $116.0 billion.
• “Machinery-Except Electrical”: total revenue of $109.0 billion.

Another factor that indicates industry change is the co-production of what were once wholy American-made goods. The infamous North American-Foreign Trade Agreement (NAFTA) (signed and sealed in the 1990s but rolled out in this century) dictates that manufacturing is shared across globally-distributed supply chains. This means that different aspects of product development conducted in different countries. The best-known example is that cars are no longer completely produced in the U.S. Parts are manufactured in the States, then shipped to Mexico where they are assembled, then returned to the U.S. for distribution/sale. International production sharing is widely blamed for U.S. manufacturing job losses since 2000.

Currently, U.S. manufacturing continues its evolution, led by advances in information technology, supply-chain and distribution innovations, reduced barriers to trade, and less competition from low-wage countries like China and Mexico. During the fourth quarter, 2017, the Bureau of Labor Statistics (BLS) forecast in October 2017 that manufacturing employment would fall from 12.3 million in 2016 to 11.6 million in 2026, a decline of 736,000. As a share of employment, manufacturing would fall from 7.9% in 2016 to 6.9% in 2026, continuing a long-term trend.

Rescinding trade agreements with Canada and Mexico was a hot topic during the 2016 Presidential election with American job preservation/creation a campaign issue that has yet to be resolved. Most experts agree that regardless of the outcome, the health and continuance of the manufacturing industry in the U.S. is integral to the overall health of the U.S. economy.

It is also important to note that while manufacturing was integral to boosting the United State’s post-war economy, that today the measure of the health of a nation is not chiefly its manufacturing output. (The size and spending strength of a nation’s middle class as well as its education system are additional factors that determine whether a nation is a world leader or a country in development.) Therefore, while U.S. manufacturing employment trends down, manufacturing output in 2017 was near record levels for real Gross Domestic Product (GDP).

This means that productivity (output per worker) has also improved significantly. This is likely due to automation, global supply chains, process improvements, technology innovations and consumer demand. So that while technology takes away a number of jobs, it facilitates the production processes, reduces the time to market for most manufactured goods, and from an output standpoint, is not a negative statistic

In conclusion, U.S. manufacturing has been reshaped markedly since the days when Henry Ford’s production line was considered revolutionary. Technology and the world stage both impact where, when, and how American goods are made and in what quantities. Given the innovation of one and the sometimes volatile nature of the other, these factors will continue to dictate what is made, where these products are made, and how they are made for decades to come.

The post What Are the Top Manufacturing Industries in the U.S. Today and How Do They Contribute to the Economy? appeared first on Newton Search.

Since 1980, however, there has been a major decline in the number of manufacturing jobs in the States. Wikipedia estimates that up to ⅓ of the manufacturing positions disappeared over the first decade of this century. Also, while the economy continues to post steady gains, that few of these jobs have returned. Some of the reasons for slow growth in this sector could be the fact that technological advances, such as widespread use of robotics, have replaced the need for many skilled workers.

For example, this is particularly true for assembly line production, where computer-driven robotic machines produce, assemble, weld, and convey a product from start to completion. Another reason for the decline in American manufacturing jobs is competition from foreign markets such as China. Since its entry into the World Trade Organization (WTO) in 2001, competition from China has created a US. goods trade deficit (imports greater than exports) which, again according to Wikipedia, was approximately $350 billion in 2016.

Let’s begin with a list of the top industries (by revenue) currently fueling the American economy. These are:

• Petroleum
• Steel
• Automotive
• Aerospace
• Telecommunication
• Chemicals
• Electronic
• Food processing
• Consumer goods
• Lumber
• Mining

The United States is the world’s second-largest manufacturer, the U.S.’s Q3 2016 industrial output (nominal GDP, annualized) was approximately $2.18 trillion. Adjusted for inflation and other factors, this output still lags behind 2007’s pre-recession peak. Still, these figures have been trending upward since 2010.

Here are the top manufactured products that Business Insider and The Bureau of Economic Analysis, an arm of the U.S. Department of Commerce, posted that during 2016, the U.S. exported $1,051 billion in manufactured goods and imported $1,920 billion, (a manufacturing goods deficit of $868 billion). Below are some of the metrics that comprised America’s $2.1 trillion Export Industry that year:

• Electrical Equipment: total revenue of $32.2 billion.
• Fabricated Metal Products: total revenue of $32.6 billion.
• Medical Equipment, Sporting Goods, Misc.: total revenue of $39.4 billion.
• Primary Metal: total revenue of $49.6 billion.
• Food: total revenue of $50.9 billion.
• Petroleum and Coal Products: total revenue of $50.9 billion.
• Transportation Equipment: total revenue of $252.0 billion.
• Chemicals: total revenue of $174.0 billion.
• Computers and Electronic Products: total revenue of $116.0 billion.
• “Machinery-Except Electrical”: total revenue of $109.0 billion.

Another factor that indicates industry change is the co-production of what were once wholly American-made goods. The infamous North American-Foreign Trade Agreement (NAFTA) (signed and sealed in the 1990s but rolled out in this century) dictates that manufacturing is shared across globally-distributed supply chains. This means that different aspects of product development conducted in different countries. The best-known example is that cars are no longer completely produced in the U.S. Parts are manufactured in the States, then shipped to Mexico where they are assembled, then returned to the U.S. for distribution/sale. International production sharing is widely blamed for U.S. manufacturing job losses since 2000.

Currently, U.S. manufacturing continues its evolution, led by advances in information technology, supply chain, and distribution innovations, reduced barriers to trade, and less competition from low-wage countries like China and Mexico. During the fourth quarter, 2017, the Bureau of Labor Statistics (BLS) forecast in October 2017 that manufacturing employment would fall from 12.3 million in 2016 to 11.6 million in 2026, a decline of 736,000. As a share of employment, manufacturing would fall from 7.9% in 2016 to 6.9% in 2026, continuing a long-term trend.

Rescinding trade agreements with Canada and Mexico was a hot topic during the 2016 Presidential election with American job preservation/creation a campaign issue that has yet to be resolved. Most experts agree that regardless of the outcome, the health and continuance of the manufacturing industry in the U.S. is integral to the overall health of the U.S. economy.

It is also important to note that while manufacturing was integral to boosting the United State’s post-war economy, that today the measure of the health of a nation is not chiefly its manufacturing output. (The size and spending strength of a nation’s middle class, as well as its education system, are additional factors that determine whether a nation is a world leader or a country in development.) Therefore, while U.S. manufacturing employment trends down, manufacturing output in 2017 was near record levels for real Gross Domestic Product (GDP).

This means that productivity (output per worker) has also improved significantly. This is likely due to automation, global supply chains, process improvements, technology innovations and consumer demand. So that while technology takes away a number of jobs, it facilitates the production processes, reduces the time to market for most manufactured goods, and from an output standpoint, is not a negative statistic

In conclusion, U.S. manufacturing has been reshaped markedly since the days when Henry Ford’s production line was considered revolutionary. Technology and the world stage both impact where, when, and how American goods are made and in what quantities. Given the innovation of one and the sometimes volatile nature of the other, these factors will continue to dictate what is made, where these products are made, and how they are made for decades to come.

photo credit: Wikimedia

The post What Are the Top Manufacturing Industries in the U.S. Today and How Do They Contribute to the Economy? appeared first on Newton Search.