31 Jul Wisconsin Manufacturing – demise or survival?
Technology and government support can help.
The manufacturing industry can benefit from technology breakthroughs, but government help is needed, both at the federal and state level. Our economic survival and development still depends on building wealth, for our citizens and our state.
The manufacturing industry in Wisconsin currently employs more than 500,000 people at 11,000 firms in all (72) counties and communities in the state. Huge challenges face Wisconsin’s manufacturing community – lingering recession, intense and almost unfair international competition (China) and increasing costs led by skyrocketing health care costs (20%+) per year. This scenario coupled with incredible lip service by our state’s thought leaders who are willing to write off the industry and no funding to match the federal Manufacturing Extension Partnership (MEP) grant program, is creating a “perfect Storm” scenario. Wisconsin may be realizing the self-fulfilling prophecy making Wisconsin’s manufacturing industry a “sinking ship”
What can the state of Wisconsin do? Support training, target existing Wisconsin manufacturer’s to stay in Wisconsin, buy here, and support MEP and other out-reach programs. Most importantly, the states leaders can serve as the bully pulpit to send a message that we can build on our manufacturing base for tomorrow’s economy, not tear it up and make room for a “new economy” as some are suggesting. Manufacturing in Wisconsin is not a dead industry! Technology can play a critical role in the survival and growth manufacturing in Wisconsin.
Here are some things manufacturer’s can do and are doing to survive this storm. Implement lean technology-based manufacturing workflow and processes that enable cost efficient and competitive operations. Train the workforce in new technologies, invest in new technology infrastructure, reposition through new technology, link into value chains, integrate services into the product mix, and spur rapid new product development. Harley Davidson, Lands End, Phillips Plastics, and Oshkosh Truck are four examples of Wisconsin businesses that have transformed and repositioned their companies with the implementation of new technologies.
Getting it right!
The Eau Claire Economic Development Corporation provided a $2000 economic development grant to assist a small manufacturing company with the selection of MIS software, through the services of the Northwest Wisconsin Manufacturing Out-reach Center (NWMOC). This grant allowed the company to restructure their business processes and to make better use of their existing software system. This project contributed to $200,000 dollars worth of direct and indirect cost savings and impact to a small manufacturing company in Eau Claire. That’s a return of 1000% on the initial investment. This is an excellent economic example of using technology grants to assist manufacturing growth.
What happened? Where is the blame? Should we move out of Wisconsin?
September 11th? China’s cheap labor force and the shift to foreign based manufacturing? Was it the stock market bust beginning in April 2003 that resulted from illegal business practices and new economy thinking? The War? Claims about industry attitude and productivity? Is it the lack of demand for products manufactured in the United States? A high perceived level of government regulations and taxes? Or is it just that times are changing? Wisconsin’s political leaders need to revisit the role they have played in the demise of one of the states great industries
The Wisconsin Manufacturing and Commerce association (WMC)surveyed nearly 600 CEO’s at its member organizations regarding the top issues facing Wisconsin business leaders. The study was released in June 2003. Taxes and the economic slowdown are the top two issues. Two- thirds of respondents said things are going in the wrong direction in Wisconsin, and 72% say state government has a neutral to anti-business attitude, from a 51.8% response in October 2001.
Government regulations and the slowdown are the top business concerns. Reducing state taxes and regulations could help business.
More than half of the responding CEO’s said their businesses will expand in another state in the coming 12-24 months while only 25% said they would expand in Wisconsin.
The Future
Opportunities for manufacturing growth are being lead by efforts to include the Lean Manufacturing Certificates offered through the Wisconsin Technology College System (WTCS), Wisconsin Manufacturing Extension Program (WEMP) and the Northwest Wisconsin Outreach Center (NWMOC. These programs came about through a joint collaboration effort earlier this year. Grant dollars are available for specific industries through the Work Force Resource Center (WOW) Please contact ewerstein@wctc.edu for more information.
The upcoming “Lean Manufacturing University” sponsored in part by the University of Wisconsin School of Business, MRO Today magazine and WMEP is a conference that will focus on world-class, real-time and real world best practices in lean manufacturing techniques and technologies. The conference is scheduled for November 10-11 at the Fluno Center in Madison. This event is targeted at CEO’s/Presidents and high-level executives in small manufacturers. You can register on line http://uwexeced.com.
What can you do as a manufacturer, owner, or employee?
1) Write to Wisconsin’s state and federal political leaders to request the inclusion of MEP in its FY 2005 budget request. The U.S. Department of Commerce (DOC) has established a website for it’s manufacturing initiative http://export.gov/manufacturing/. Click on “Provide information/Feedback” in the middle of the page and it will generate an email form – seeking input from manufacturer’s on their challenges and recommendations. Based on public input, DOC will develop a plan of action to help stimulate US manufacturing. MEP must be in the plan if it is to be part of the FY 2005 Presidents budget. MEP will not be in the plan if DOC does not hear it is needed.
2) The White House maintains a web site mail service. Visitors are asked to vote their approval or disapproval of the President’s position on various issues. MEP is the only issue listed under the heading of small business. This system keeps score, we want and need MEP to be a winner, and MEP wants manufacturing to succeed. Visit https://sawho14.eop.gov/PERSdata/intro.htm and be sure to indicate, “Write a differing opinion” then select “Small Business – MEP. Write a simple message after your name – “Please fully fund MEP program for FY 2005 budget – it really works.”
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Frank Borg is the marketing manager for the FBORG@cvtc.educ.