4 Rules Manufacturers Should Remember

Courtesy of Jacksonville Business Journal

To automate, or not to automate. To re-shore, near-shore, or off-shore. To insource, or to outsource.

Those are just a few of the strategic decisions that manufacturers face today. And each can have a major financial impact.

Automation is a multi-faceted question, with multifaceted answers for most of you. Not everyone needs robots, but many of you can benefit greatly. Safety and precision are two leading reasons to automate. Supporting workers is the third most common. Eliminating labor was a short-sighted reason that guided discussion of the “lights out factory” decades ago. Robots continue to become less expensive to buy, but operating them is far from free. If you don’t have internal expertise, develop it before you start purchasing equipment.

Most of you must become invested in the Internet of Things (IoT) at some point before 2020. Whether it’s machine-to-machine, machine-to-human, or machine-to-the-internet-for-data-use, machine-generated data will soon be fundamental to how we do business. It’s time to introduce your organization to the basics, if nothing more. It’s time to develop data capture, maintenance, and analytics capabilities.

Internet of Things

If you think IoT won’t impact your industry, you’re wrong. Just like EDI, barcoding, RFID and ERP became basic, IoT will leverage those and quickly bypass them in terms of valuable information.

Protectionism is spreading, which means the advantages and disadvantages of import and export are changing. Related strategy reviews began a few years ago. GE’s Jeff Immelt announced that due to world-wide increases in protectionism, GE is changing its globalization strategy. Instead of specialized production centers and world-wide exporting, it will transition further towards localized self-contained production.

Over the past seven years General Motors has in-sourced a significant number of IT, production, and professional jobs while investing more than $20 billion in infrastructure. But few of you are GM or GE. Their strategies make sense for them, but not necessarily for anyone else.

Jason Wolfe, CEO of NovaLink — a U.S.-based near shore manufacturing solution with three manufacturing facilities in Mexico and one distribution center in the United States — suggests that near-shoring continues as a viable option for U.S. manufacturers. Wolfe says, “ Even if a 20 percent tariff is put in place, the labor rates in the U.S. will remain approximately five times higher than the labor rates available in Mexico and elsewhere. Additionally, as the dollar continues to strengthen against the peso, as it has over the last six months, the impact of a tariff goes increasingly unnoticed.”

Wolfe continues: “Minor changes to NAFTA would be logical and beneficial, but ultimately Mexico is the United States’ greatest asset in manufacturing. While relocation to the United States makes sense for some companies already positioned to invest in automation and receive the benefits being offered, the sub-assembly producers and small to mid-sized businesses have to remain competitive to survive. A lot of companies are unable to invest billions of dollars on capital improvement and automation, so Mexico must continue to play a large role in supplying competitive markets of labor and reinforcing the U.S. manufacturing base.”

Four rules to keep in mind

How should the average mid-sized manufacturer answer the automation, shoring, and sourcing questions? Here are four rules to keep in mind while deciding:

The first rule: To not decide is to decide.

The second rule: Make vs. buy is old but sturdy.

By adding competitive contribution to the old calculation, it still applies. Supply-chain management should always be aware of potential suppliers that improve your competitive position. As the needs of your customers and your business change, SCM can follow standard processes for evaluating alternatives.

The third rule: remember that Kodak was still hiring chemical engineers when digital was exploding.

Your technical resources should support the business you’ll be in in five years, not what you were five years ago. That means something different to each of you, but I hope no one is saying those are one and the same.

The fourth rule: If you don’t know where you’re going, any road will get you there.

Manufacturing leaders will make these decisions soon. Each can be optimized with reasonable analysis and an operations strategy that supports your business vision. The four together can also be optimized as part of your operations and product management strategies. But if you have no real vision and no real business strategy… well, now’s the time to fix that problem.

Contributing Writer Rebecca Morgan

http://www.bizjournals.com/nashville/news/news-wire/2017/03/29/4-rules-manufacturers-should-remember.html

Manufacturing businesses ranging from $100 million to $1 billion in annual sales value the advice of operations strategist Becky Morgan and her Finish Strong thinking. With more than 25 years consulting with manufacturers, preceded by 14 years of hands-on executive responsibilities, Morgan has contributed to the success of aerospace, food, machining, assembly, electronics, tool and die, jewelry, and process industry businesses. Morgan speaks with audiences typically ranging from 35-150 attendees.

 

Safariland sees success after relocating acquisition to Jacksonville

Courtesy of the Jacksonville Business Journal

For Safariland’s Jacksonville manufacturing site, focusing more on making military products was a big change.

After acquiring Mustang Survival in 2013 and manufacturing that line in West Virginia, they found it was a difficult, remote location to get to, especially with added military personnel from different branches frequenting the facility to test and inspect products.

Jacksonville was just the opposite. There was already infrastructure in place from the company’s headquarters, so no brick-and-mortar expansion was necessary. Throughout 10 months, Safariland shifted forensics and firearms productions from their Jacksonville headquarters to their facility on Faye Road where they already manufacture holsters and moved in the Mustang Survival line to the freed up space.

Now, $1.9 million and 108 new jobs later the Mustang Survival line–consisting of personal flotation devices, dry suits and gravity suits–is running at 85 percent efficiency six months after its installation.

But getting everything running has been a process, said Blake Brown, vice president of manufacturing for Safariland. Dealing more with the military has been a lot to get used to: the products are more specialized and they’re designed as a “joint effort” between the military and Safariland.

“Just learning how to manage in a military contract world, it’s not the norm for us,” Brown said. “Not that we don’t do military products, but doing it like this is different. This is heavy gauge military contract business is what this is.”

Safariland Helmets

Staffing the new line in Jacksonville also proved to be a challenge at first. When they moved the Mustang Survival line out of West Virginia, Safariland offered 70 employees relocation, said PJ Wilson, supervisor of Safariland’s human resources. Of those 70, only eight chose to relocate to Jacksonville which meant to staff the new line in Jacksonville, more people would need to be hired and some workers from other parts of the factory would need to be retrained on the Mustang Survival line.

Wilson said each person who needed to be trained would cost the company $10,000 to $12,000 per person. But with help from grants from CareerSource Northeast Florida and the city, they were able to offset some of the costs of training.

“You bring someone off the street, it takes six months to train,” Brown said. “If you bring someone who’s been sewing for 20 years over [to the Mustang Survival line], it’s harder sewing but they’re accustomed to industrial sewing so they got used to it quicker.”

Part of the extra cost in training stems from the difficulty and complexity of manufacturing the dry suits and gravity suits. Brown said the gravity suits are “the most complicated product we have to build.”

Fighter pilots wear gravity suits, which have air pumped into the legs of the suit when the pilot hits G-force speeds to pump the blood that rushes into their legs back into the brain to keep them from passing out.

The dry suit production required “a specialized skill that we did not have,” Brown said. Dry suits are used by mainly the Air Force, Navy and Coast Guard and keep its user dry and warm in the event they go into the water, especially in colder waters.

“It’s not a product you want to fail on you,” Brown said. “In the North Atlantic, you don’t want any leaks, the cold water will cause your blood to do weird things. It’ll shut your system down.”

The dry suits are sealed with hot tape to ensure no leaks occur and the product is tested until they show they don’t have any leaks. Safariland brought in help from their British Columbia plant, where Mustang Survival production is based, to help train and refine the skills of those sealing the suits to maximize their efficiency down the line.

Adapting to new changes in the company, however, is something those at Safariland are accustomed to doing. Brown said the company expands primarily by acquisition of similar, smaller companies and with every acquisition, there’s a “plateau” period where the company needs to “stabilize” and figure out the logistics of their new acquisitions.

But it won’t be too long before more acquisitions come along, Brown said. And when they do, it’s possible Jacksonville may be the place for them.

“We do have another lot next door [to the Jacksonville corporate headquarters], so we do have expandable space, and we do have a little more land over at the operation at Faye Road,” Brown said. “So we have some room in Jacksonville, so we will see what happens.”

http://www.bizjournals.com/jacksonville/news/2017/06/22/safariland-sees-success-after-relocating.html