Bringing High Tech Manufacturing Home
Many believe that U.S. manufacturing is on the threshold of revitalization; reshoring what was lost as well as opening new frontiers in home grown businesses. Federal and state government, academia, and industry are ‘poised to play’ in advancing U.S. competitiveness through collaboration and strategic partnerships in technologies, research and development, materials, and processes that will enable small and medium sized manufacturers to gain the cutting edge needed to compete, even lead again, in the global marketplace.roponents of bringing manufacturing back, like Bob Wolski, CEO of Colorado Springs based SPIRE, EMS, Inc., believe this move to revitalize manufacturing will reshape the economic engine, shift the balance sheet, and create a ripple effect across the economy that would put Colorado Springs and America back on top. Once known as “Silicone Mountain,” Colorado Springs had a robust high tech industry. Wolski, and other industry leaders, have galvanized state and regional business advocates, spurring opportunities locally to restore the technology base that once powered the region.
Coming Full Circle
Inefficiencies and cost disadvantages were contributing factors to the exodus of the U.S. manufacturing industry throughout the 1990s and early 2000s. Along with thousands of jobs, the U.S. lost their competitive advantage in the international markets and placed our defense industrial base at risk. Manufacturing companies were attracted to lower wages, less environmental and governmental regulations, and penetrating global markets; the lower total cost of operations drew manufacturing offshore and into foreign markets.
Many companies are now reevaluating their globalization strategies, spawned by the recognition that a vibrant advanced manufacturing sector is not only vital to the economy, but to our national security. To regain our market advantage, the private and public sectors have unified around one very critical point: the cost equation has to change in order to bring manufacturing back, both nationally and locally.
Weaving the Digital Thread: Stitching the Supply Chain Together
Industry leaders say a U.S. advantage must be created by implementing operational efficiencies and innovation at the core. According to Tony Feltman, president and COO of SPIRE, EMS, Inc. and a 2014 Rising Star, the next evolution for gaining efficiencies will be found in the ‘digital thread’, an electronic reference point that connects the entire process from design engineering through execution.
“The digital thread is a fundamentally new way for information to flow securely between various segments of the product life cycle; from suppliers and customers, to and from intelligent machines and engineers on the shop floor, and along the supply chain,” explains Feltman.
The true genius behind the digital thread, as outlined on manufacturing.gov, is that it is applicable to every manufacturing sector, regardless of their technologies, and will provide better analytics and intelligent manufacturing, resulting in greater efficiency and massive long-term savings. As an example, the commercial aviation industry alone is expected to save 3 billion dollars over 13 years.
“Manufacturers who are able to adapt, retool, and provide a level of mass customization rapidly through this digital thread will outperform the competition every time,” Feltman predicts.
Collaborate to Compete
This digital revolution, while not a new concept, has gained momentum through federal investment in the National Network for Manufacturing Innovation (NNMI), a research initiative to solve industry-relevant problems. LTC Joel Dillon, Director of Army Manufacturing Technology, described the NNMI as innovation hubs with unique concentrations where industry, academia, and government partners collaborate and co-invest to deploy new capabilities, processes, and products that can accelerate commercialization.
SPIRE has championed bringing one of these hubs to Colorado with the focus area of Digital Manufacturing and Design Innovation (DMDI). Wolski said that SPIRE is uniquely positioned to pilot the initiative given that they provide precision machining for both the Department of Defense and commercial manufacturing companies like Diamond Wire.
“DMDI would provide the opportunity for small and medium sized businesses to operate collaboratively giving them the leverage to compete globally, on a much larger scale than they could achieve individually,” says Feltman.
Diamond Wire: On the Cutting Edge
Diamond Wire Materials Technologies, Inc., brings an alternate perspective on how to return manufacturing dominance. The company has been headquartered in Colorado Springs since it was founded in 1994.
Diamond Wire Material Technologies, Inc. develops, manufactures, and sells diamond wires and related consumable products for solar, optical, and semiconductor markets around the world. Eighty percent of the company’s customer base is international.
As an innovative global company that has held their competitive edge, CEO Tom Devine says, “We’re one of the rare companies in the U.S. that manufactures in America and ships to Asia.” He attributes their market advantage to leading edge efficiencies, proprietary designs, and strong relationships with partnering companies.
“It’s a very challenging engineering environment that relies on Lean and Six Sigma protocols,” Devine explains. “Since we’re competing with low costs in Asia, we have to be excellent at execution in both. That means eliminating waste and variation in our processes.”
The Next Generation
So, how do we bring more force multiplying companies like Diamond Wire to the region that would have a cluster effect of attracting interconnected businesses, suppliers, and associated institutions?
Founder of both the State and the Colorado Springs private economic development programs, Steve Schuck believes in nurturing those employers who are already here with a robust, sophisticated peer driven program that is focused on their needs. “Clearly our best source of leads for new employers rests with the satisfied companies who are already succeeding here and understand how great a lifestyle Colorado Springs offers.”
“The barriers are nearly as many as the opportunities,” Devine observes. While work force is one of the greatest strengths, it also represents one of the greatest threats to the industry. More than a generation of the manufacturing workforce was lost with the overseas exodus. Finding skilled workers is a constant struggle. The new generation of manufacturing is no longer about punching in and pounding out the product. It is more about a skilled, educated, well-paid work force that can bring new efficiencies to the industry.
“Our education system is not tuned to the needs of manufacturing anymore,” says Devine.
Additionally, to encourage innovation, capital spending and job creation, we need to review our tax structure, according to Schuck, “To charge a personal property tax on manufacturing equipment and say we want to attract manufacturing is sending a terribly mixed message. What you tax you get less of. If we want our existing manufacturers to thrive and expand, and invest in more equipment, and if we want to attract new, we simply must reevaluate.”
While barriers exist, industry leaders like Devine and Feltman are hopeful that they can be overcome through collaborative initiatives and building awareness.
“If we are not building something, we are not offering anything to the world,” says Devine. “By offshoring manufacturing, we weaken our country, while strengthening others.”
Though manufacturing has evolved into a high tech digital industry, the core principles of discipline, efficiency, and innovation remain hallmarks of what drive the American manufacturing spirit. When coupled with a business friendly environment, supported by a robust workforce development approach, leaders believe American manufacturing will regain its industry dominance that translates to revenue growth and quality, high-paying jobs.