Gaming the System: How One Manufacturing Company…

Gaming the System: How One Manufacturing Company…

Apr 19, 2017

“Gaming the System: How One Manufacturing Company Saved Itself With Radical Transparency And Created A Slew Of Blue-Collar Millionaires” By Peter Carbonara, Forbes There are three basic conditions if you want to work for Jack Stack, and they go for everybody from senior executives down to the people who clean his company’s bathrooms. The first is you have to learn how to read and understand the company’s financials, the second is you really have to believe there is no “I” in “team,” and the third is you have to get into the habit of asking, “What could go wrong, and what are we going to do when it does?” Stack, 68, is the CEO and cofounder of SRC Holdings, a Springfield, Missouri, company owned entirely by its 1,600 employees. Since its launch in 1983, SRC’s main business has been remanufacturing engines and other components for trucks, tractors and other heavy equipment, which means taking worn gear and returning it to like-new condition. It’s a tough, highly cyclical business. “If GDP is less than 2%, we’re flat,” Stack says. “If it’s above that, we’re on fire.” Last year, SRC booked $16 million in profits on $532 million in sales to customers like General Motors, John Deere and Navistar. Over the years, SRC has evolved into a highly entrepreneurial miniconglomerate that has launched more than 60 companies in industries ranging from banking to medical devices to furniture. It has also developed an unusual culture–a humane, Midwestern blend of quantitative management, radical transparency and practical paranoia–that has made it the flagship of what’s known as the open-book-management movement. SRC, a place where sports metaphors rule, calls its distinctive brand of open book “the Great Game of Business.” A small but passionate cult of business owners has grown up around two big ideas, which Stack has promoted in two books, The Great Game of Business and A Stake in the Outcome: One idea is that you can boost performance by making a game of tracking and improving key metrics. The other is that if you want employees to care about their jobs as if they were owners, you should make them owners. There are many reasons SRC has...

What Does ‘American Made’ Mean to You?

What Does ‘American Made’ Mean to You?

Apr 18, 2017

By Mark Shortt, Design-2-Part Magazine The words ‘Made in the USA’ are becoming increasingly relevant for reasons ranging from pride in workmanship to protection of corporate and national security interests. Here’s a look at some of the forces that are driving companies to keep their manufacturing close at hand. It’s a pretty dynamic landscape for American manufacturers today, much of it being spurred by enabling technologies, economic uncertainties, and agile business strategies that can quickly adapt to changes in market forces and customer demands. There’s also a new administration in place that figures to alter the landscape in significant ways. Amid all the new developments, it’s useful to hear what people in the thick of the action think. With that in mind, D2P reached out to manufacturing leaders—executives, entrepreneurs, and advocates—to hear their insights on the current state of U.S. manufacturing, as well as a number of issues relevant to the industry. What’s the State of American Manufacturing Today? Scott Paul, president of the Alliance for American Manufacturing (AAM), gives it a passing grade, saying that “it’s doing okay, broadly speaking,” but faces significant challenges. While the automotive sector has been a real bright spot, leading the economic rebound from the Great Recession, there have been ongoing challenges with respect to global competition, he said in an interview. “In particular, firms that are in direct competition with China have, I think, very mixed experiences with that. And unfortunately, that imbalance has helped to dampen the potential job gains that we’ve so far realized. “Obviously, the political environment has changed quite a bit, and many people in manufacturing see a lot of opportunity for changes in public policy that would help grow manufacturing in this country,” he continued. “A few see some risks to progress, as well. And, underneath all of this is the fact that technological progress, innovation, and management practices continue to evolve. And I think that will inform the future of manufacturing as well.” What Does ‘Made in the USA’ Mean to You? Paul believes that when a label reads ‘Made in the USA,’ every bit of the product should be made in the USA, other than if there’s a minimal exception....

The long, rough ride ahead for ‘Made in America’

The long, rough ride ahead for ‘Made in America’

Apr 17, 2017

By Nick Carey, Reuters Mini motorcycle and go-kart maker Monster Moto made a big bet on U.S. manufacturing by moving assembly to this Louisiana town in 2016 from China. But it will be a long ride before it can stamp its products “Made in USA.” The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago. “There’s just no way to source parts in America right now,” said Monster Moto Chief Executive Alex Keechle during a tour of the company’s assembly plant. “But by planting the flag here, we believe suppliers will follow.” Monster Moto’s experience is an example of the obstacles American companies face as they, along with President Donald Trump, try to rebuild American manufacturing. U.S. automakers and their suppliers, for example, have already invested billions in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed “border tax” on imported goods were to become law. When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist. For now, finding U.S.-based suppliers “remains one of the top challenges across our supplier base,” said Cindi Marsiglio, Wal-Mart Stores Inc’s (WMT.N) vice president for U.S. manufacturing and sourcing. Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods. Their experience has shown Americans’ patriotic shopping habits have limits, namely when it comes to price. Take Monster Moto’s bikes, which sell for between $249 to $749. Keechle, the CEO, says he can’t raise those prices for fear his price sensitive prospective customers will turn to less expensive rivals made in China. “Consumers won’t give you a free pass just because you put ‘Made in USA’ on the box,” Keechle says. “You have to remain price...

Toyota bets on sprawling Kentucky plant with $1.3 billion…

Toyota bets on sprawling Kentucky plant with $1.3 billion…

Apr 13, 2017

“Toyota bets on sprawling Kentucky plant with $1.3 billion investment”  By Nathan Bomey, USA Today Toyota said Monday that it will invest more than $1.3 billion in its sprawling Georgetown, Ky., plant, its largest factory in the world, in a massive retooling project designed to bring new vehicles to market faster and more efficiently. Although the investment does not include new jobs, the move signals a deepening commitment to the U.S. market amid threats by President Trump of a border tax on automakers that bet on Mexico. The president, who had previously targeted Toyota in his criticism of companies that make vehicles in foreign markets and sell them to Americans, hailed the Japanese automaker’s investment as reflective of an “economic climate that has greatly improved under my administration,” according to a statement issued by Toyota. To be sure, the Toyota investment is part of a plan announced days before Trump took office to invest $10 billion in U.S. operations over the next five years. In that respect, the investment is no surprise. The future of the sprawling, 7.5 million-square-foot Kentucky plant, which is Toyota’s largest factory in the world, was never in doubt. The company makes several vehicles there, including the Camry sedan, which Cars.com has dubbed the most made-in-America car in the U.S. based on an assessment of the car’s components. Still, the investment marks a significant bet on the future of American manufacturing. Toyota said the retooling investment would pave the way for a new system of vehicle assembly that it’s calling Toyota New Global Architecture.  The new platform is designed to be easily adjusted for future models, giving Toyota the ability to make engineering and design changes swiftly to response to market changes. “This is the largest investment in our plant’s history and it speaks directly to the quality of our people and our products, as well as the partnerships we’ve forged in the local community and across the state,” Toyota Kentucky president Wil James said in a statement. “This major overhaul will enable the plant to stay flexible and competitive, further cementing our presence in Kentucky.” The plant currently has about 8,200 employees, having added 700 in recent months to launch...

Adidas, Carbon take giant step into mass customization…

Adidas, Carbon take giant step into mass customization…

Apr 11, 2017

“Adidas, Carbon take giant step into mass customization of athletic shoes” By Norbert Sparrow, Plastics Today German sportswear giant adidas (Herzogenaurach) brought 3D printing’s promise of mass customization one step closer to the local mall today with the introduction of its Futurecraft 4D athletic shoe line, which features a midsole manufactured using a process called Digital Light Synthesis. Developed by Silicon Valley startup Carbon (Redwood City, CA), the technology differs from conventional 3D printing in that it grows objects from a pool of resin rather than creating them layer by layer. The partnership with Carbon allows Adidas “to overcome many of [the] difficulties to produce a sole that can rival one made by an injection mold, and at a speed and price that allow for mass production,” reports Reuters. Three hundred pairs of Futurecraft 4D shoes have been released for friends and family, and Adidas reportedly expects to sell 5000 pairs of the shoes this year, ramping up to 100,000 next year. Adidas used its extensive library of running data to shape functional zones into a midsole design crafted through Digital Light Synthesis, explains Carbon. “Unlike any traditional manufacturing technology, Digital Light Synthesis allows adidas to precisely address the needs of each athlete in regards to movement, cushioning, stability and comfort with one single component. Carbon’s unique programmable resin platform offers unparalleled performance with respect to material durability and elastomeric responsiveness,” said the company. Initially, adidas plans to produce batches of shoes customized for specific sports and cities, but the ultimate goal is to allow customers to be measured and tested in store for a perfectly fitted shoe that takes into account the user’s gait, weight and athletic pursuit, reports Reuters. Adidas describes the envisioned experience in this way on its website: “Imagine walking into an adidas store, running briefly on a treadmill and instantly getting a 3D-printed running shoe. Creating a flexible, fully breathable carbon copy of the athlete’s own footprint, matching exact contours and pressure points, it will set the athlete up for the best running experience. Linked with existing data sourcing and foot-scan technologies, it opens unique opportunities for immediate in-store fittings.” Not about to be left in the dust, Nike is also exploring the...

Manufacturing Adds 11K Jobs in March, All in Durable Goods

Manufacturing Adds 11K Jobs in March, All in Durable Goods

Apr 10, 2017

By Bill Koenig, AdvancedManufacturing.org Manufacturing added 11,000 jobs in March, with all of the net gain taking place in durable goods. Fabricated metal products led the increase, with a gain of 5500 jobs, according to a breakdown by industry issued today by the US Bureau of Labor Statistics. Also contributing to the increase was the motorized vehicles and parts category, with a gain of 3000 jobs. Miscellaneous manufacturing posted an increase of 2000 jobs. The largest job loser among makers of durable goods was the machinery category, down 2600 jobs. Manufacturing totaled 12.392 million jobs on a seasonally adjusted basis last month. That’s up from an adjusted 12.381 million in February and 12.355 million in March 2016. Manufacturing showed signs of recovery in 2017’s first quarter. The Institute for Supply Management (Tempe, AZ) said earlier this week that its PMI, which measures economic activity in manufacturing, was 57.2% in March. That eased a bit from the February PMI of 57.7%. Still, March still marked the seventh consecutive month of economic expansion for the manufacturing index. A PMI above 50% indicates manufacturing expansion, below that level indicates contraction. The PMI has averaged 53.2% the past 12 months. The index is based on a survey of purchasing and supply executives in 18 industries. Non-Farm Employment What’s more, durable goods outperformed the overall US economy in job activity last month. Total non-farm employment advanced by 98,000 jobs last month, the bureau said in a statement. Economists surveyed by Reuters forecast a gain of 180,000 jobs. The US unemployment rate fell to 4.5% in March from 4.7% the month before. The March total job increase marked a slowdown from the year’s first two months, when job gains exceeded 200,000 each month. Manufacturing jobs peaked in June 1979 (19.6 million on a seasonally adjusted basis, 19.7 million unadjusted). That sank to a low of 11.45 million adjusted and 11.34 million unadjusted in February 2010 following a severe recession caused by the 2008 financial crisis. Since that low, new manufacturing jobs have been created requiring increased skills because of more automation and technology in factories....