[PDF] - MEET KNOW GROW About SME: www.sme.org. The Society of Manufacturing PDF Document

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SME Toronto

WWW.SMETORONTO.CA

Nigel Southway

SME Chair 2012

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Take Back Manufacturing … to North America

We will explain the TBM initiative and how we must all work together to revitalize our North American Manufacturing sectors and return them to the economic powerhouse they once were. The latest expert economic outlook is that localized manufacturing close to our consumer base can be much more competitive than the existing globalized manufacturing approach. This updated outlook is now resulting in decisions to Reshore products and to manufacture the next generation of products for the North American market in more localized manufacturing facilities with an integrated supply base. We will explain the local Canadian imperatives and opportunities to be gained from this new, strong local manufacturing sector approach. We will explain how it can provide an incubator for innovation and lead to a balanced economy by integrating our strong knowledge, service and existing manufacturing bases for maximum competitiveness and prosperity. But as industrialists, engineers and investors we must be ready for this resurgence of manufacturing in North America and provision the required knowledge, skills, capacity, technology, infrastructure and a strong implementation Roadmap to ensure its success. We will explain the TBM Roadmap developed to support this journey.

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About SME:

The Society of Manufacturing Engineers Premier source for manufacturing knowledge, education and networking.

Connecting manufacturing practitioners together. Provide Tradeshow , Expo and network events. Reviews latest manufacturing technologies/processes/techniques/practices. SME world-wide supported network of chapters and technical communities. Many programs, events, magazines, publications, huge technical database and online training …. SME leader in manufacturing workforce Education/training/skill development. SME is a LEAN Business Certification Authority.

www.sme.org. MEET KNOW GROW

WWW.SMETORONTO.CA WWW.SMETORONTO.CA

Advancing Manufacturing in Ontario

$125 per Year

Automated Manufacturing & Assembly Identifies and pursues advancing technologies and techniques in automation and assembly. Forming & Fabricating Concentrates on key metal forming and fabricating technologies. Industrial Laser Promotes laser technology in North America with high intensity by educating the market and advancing the laser technology base. Machining & Material Removal Discusses, explores and advances ideas related to cutting processes and machining systems.

SME Technical Community Networks (8)

Manufacturing Education & Research Advances education and research in manufacturing, career and professional development, and the manufacturing enterprise's need for a skilled workforce. Plastics, Composites & Coatings Addresses the manufacturing processes of plastics, composites, and finishing and coatings technology. Product & Process Design and Management Discusses, investigates and advances ideas related to the design and management of products and processes, as well as lean manufacturing concepts. Rapid Technologies & Additive Manufacturing Concentrates on the technologies and processes that help conceive, develop, test, improve and manufacture new products to bring them to market faster and more cost effectively.

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NIGEL SOUTHWAY

40 years Broad Business and Manufacturing Experience
Rough post-war Sea-Port (Bristol England)
Posh name/Specs…Stress/had to grow up tough
Product of the British Swinging 60’s !!!!!
British Engineering Apprentice…Aerospace/Electronics
BSc EEE C-Eng. in Engineering/MSc Management…. Manufacturing Engineer (1972)
MOTOROLA Director Manufacturing Eng / Lean and Six Sigma Implementation
Change Agent/Educator/Coach/Advisor for LEAN business improvement
AUTHOR : CYCLE TIME MANAGEMENT… Fast Track to Productivity Improvement
Consulted many organizations in different industry sectors in many countries.
Have assisted many Global Sourcing programs and Joint Ventures
Society of Manufacturing Engineers …2012 Chair Toronto Chapter
Globalized Manufacturing will remain a significant challenge!!
Strong Coach to Vision and Plan a Balanced Source Evolution !

www.nigelsouthway

NEXUS

Owner of NEXUS CONSULTING SERVICE

(1992)

THE BEATLES

THE WHO

MODS

The MODs

Miniskirts

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British Engineering Apprenticeship

Education Training

CONCORDE SST

002 April 1969

Mach 2 (1350 mph) 120 Passengers

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GLOBALIZED MANUFACTURING

2004 Onward

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The future of manufacturing in Ontario’s economy.

Nigel Southway SME Chair 2012 PEO

?

TBM

IT’S A NORTH AMERICAN PROBLEM

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TBM

Take Back Manufacturing

www.SME-TBM.org

A Forum Dedicated to Restoring

ur Manufacturing Sectors.

25 Technical Associations 3 Trade associations 5 Educational policy makers 7 Media experts 3 Local government reps 5 Industry experts

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M

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TBM…Our Ultimate Goal

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Work together …. Government,

Education organizations Industry leaders ROADMAP……..Recover our future industrial capability …… and therefore our future prosperity. CMTS Toronto Canada October 2011 FABTEC Toronto Canada March 2012 MMTS Montreal Canada May 2012 SME Annual Conference Cleveland USA June 2012 Many other Society and Association events in 2012

Presentations.... TAKE BACK MANUFACTURING M

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http://www.canadianmanufacturing.com/fabrication/production/taking-back-manufacturing-51066

http://sme-tbm.org/app/download/5809147904/PEO+TBM+article.pdf

Professional Engineers Ontario

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WHY?..Take Back Manufacturing

FOR OUR KIDS!!

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Our Kids will think we don't make things!!!

This is NOT a game!!!...

? ? ? ?

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GLOBALIZED MANUFACTURING

Moved Off-shore…..

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Textiles

Furniture

Footwear

Electronics

AUTO PARTS

Appliances

Plastic goods Equipment metalwork Fittings

Foods

Un-controlled trade…..

“herd behavior”

For low cost labor rates

15% Reduction in Manufacturing Intensity in the last decade

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2009 2010 2011

CANADA

More than 500,000 jobs lost in last 6 years M Only 25000 jobs added by Resource sector growth

Ontario Economic Performance

How has Globalized Manufacturing Affected our Province?

M

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13% GDP & 15% Employment ONTARIO Reduction Offshore content has increased Reduced intensity factor

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SERVICE JOBS????

(1Manf job = 3 Service jobs)

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9/16/2012 14 Large Out-of-Balance Trade Gap…. -15% of GDP. Unbalanced Revenue Flat to low growth … so recovery difficult. Business and Job loss….. no real plan to fix. Apathy Under- Capitalization Productivity loss Erosion of skills and knowledge

Summary

We are now a “have-not” Province!

M Resources

A Balanced Economy

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Education Manufacturing Service Exports Public Services Government Imports

Was

CANADA/ONTARIO COSTS REVENUE

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A Far Less Balanced Economy?

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less More Less? Less? Less? less Low value added

Is

CANADA/ONTARIO

What happened?

30

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Globalized Trade

1% GDP

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OUR BIG BROTHER

(US GDP 2010=14000B)

USA

NORTH AMERICA

Chased Emerging Markets

Used liberalized Trade approach Removed barriers and controls Accepted Out of Balance Trade. Assumed More Service Sector Jobs????

4% GDP

Globalized Trade Cumulative Deficit is now 50% 2010 GDP

1% GDP

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(US GDP 2010=14000B) Significant government deficit and foreign borrowing

USA

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(GDP=1350B)

10% GDP

CANADA

1% GDP
2% GDP

Worse than USA numbers!!!

Canada/World

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1% GDP

34

Declining

Prosperity INDEX

CANADA

We have lost our BALANCE to remain Productive.

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HOW COULD THIS HAPPEN?

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Globalization?... (NOT working in its current form)

The Mature Economies through-out the world are floundering. Liberalized trade model for globalized manufacturing now being discredited The bazaar vision of a post industrialized service based economy now a myth

Outcome....Declining legacy of prosperity for the next Generation in Mature

economies…(Double digit youth unemployment).

Take Back Manufacturing

*

*Many Economists believe free market liberalized trade cannot function with state managed emerging economies

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THE GAME CHANGER!

So what’s next?...... We need a critical mass of awareness across our population to force action taking to recover our future.

GLOBALIZED MANUFACTURING

? ?

TBM Positional Paper on the Waste in a Global Supply Chain

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Waste of VERY Expensive Bunker Fuel Much Non-Value-Adding Inventory

PURE WASTE

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Waste of VERY Expensive Bunker Fuel Much Non-Value-Adding Inventory

PURE WASTE

A single large container ship emits pollutants equivalent to 50 million cars. The low grade bunker fuel used by the worlds 90,000 cargo ships contains up to 2,000 times the amount of sulfur compared to diesel fuel used in automobiles. The recent boom in globalized manufacturing makes container ships account for 90% of global trade by volume.

VERY LARGE CARBON FOOTPRINT

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41 Numeric data is available, click here for information.

Crude Oil Prices in USDs Start of Globalization Globalization breakeven point Note: localized supply of energy will not change this outlook

We will not run out of Oil… but …. We will run out of Oil we can afford to burn!! The end of cheap China

What do soaring Chinese wages mean for global manufacturing?

Mar 10th 2012 | HONG KONG AND SHENZHEN | from the print edition

CHINA … Low Cost Country?

WEALTH TRANSFER???

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GLOBALIZED MANUFACTURING

? ?

START THINKING LEAN & GREEN

?

GLOBAL SUPPLY CHAIN

CHINA/ASIA

Manufacturing recycle loop

Canada USA

9000 km Each way MIN 6 weeks Transit Inventory MIN $100/M cube to transport MIN Many Transactions / Handling…… Much Waste of Natural Resource’s

44

HIGH WASTE NOT LEAN NOT GREEN Dig Resources Ship resources Dock resources Use Resources Ship products Dock products Ship Store ship Sell Process

LEAN Review of Trading Models

SCRAP

$

NOW

When Interest rates are “normalized” we will have a “High cost of Inventory trap”

Cost Drivers

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GLOBAL SUPPLY CHAIN

CHINA/ASIA

Manufacturing recycle loop

Canada USA

9000 km Each way MIN 6 weeks Transit Inventory MIN $100/M cube to transport MIN Many Transactions / Handling…… Much Waste of Natural Resource’s

45

HIGH WASTE NOT LEAN NOT GREEN Dig Resources Ship resources Dock resources Use Resources Ship products Dock products Ship Store ship Sell Process

LEAN Review of Trading Models

SCRAP

$

NOW

When Interest rates are “normalized” we will have a “High cost of Inventory trap”

Cost Drivers

INSANITY

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GLOBAL SUPPLY CHAIN

CHINA/ASIA

Manufacturing recycle loop

Canada USA

9000 km Each way MIN 6 weeks Transit Inventory MIN $100/M cube to transport MIN Many Transactions / Handling…… Much Waste of Natural Resource’s

47

HIGH WASTE NOT LEAN NOT GREEN Dig Resources Ship resources Dock resources Use Resources Ship products Dock products Ship Store ship Sell Process

LEAN Review of Trading Models

SCRAP

$

NOW

When Interest rates are “normalized” we will have a “High cost of Inventory trap”

Cost Drivers

CHINA/ASIA

Canada USA

48

LEAN Review of Trading Models

LEAN & GREEN

Intrinsically less wasteful Short Supply Chains FAST RESPONSE to customers

Local Manufacturing Strong Incubator for INNOVATION Balanced Trade

1000 km Each way MAX 1 week Transit Inventory Max $10/M cube to transport Max Few Transactions Minimal Inventory/Interest rate exposure

BALANCED ECONOMY

Localized TRADE Bloc

Other Trade Blocs Other Trade Blocs

Other Trade Blocs

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Canada USA

49

LEAN Review of Trading Models

LEAN & GREEN

Intrinsically less wasteful Short Supply Chains FAST RESPONSE to customers

Local Manufacturing Strong Incubator for INNOVATION Balanced Trade

1000 km Each way MAX 1 week Transit Inventory Max $10/M cube to transport Max Few Transactions Minimal Inventory/Interest rate exposure

BALANCED ECONOMY

Localized TRADE Bloc

HEALTHCARE

EDUCATION TRAINING

We have

“Run the Numbers”

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USED

BALANCED SOURCING MODELS

Every Engineer should understand business costing and economics!!!

LEAN Review of Trading Models

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BEST WORST % of Total Cost LOCAL OFFSHORE OFFSHORE Issues Material content 40 40 50 Foreign country materials may need harmonizing with your designs Labor content 25 3 3 A clear advantage, but product skill and training may be an issue Overhead 25 4 6 A lack of foreign management capability may effect other hidden costs Local Support costs 7 10 10 Your internal support for offshore will be an adder to your business costs Offshore support costs 3 6 Support at offshore site will be an adder to your business costs Transportation 6 8 These added costs can also be effected by containerization skills and knowledge Inventory costs 3 6 10 longer line of supply and maybe associated forecasting will attract inventory Duty (export and import) 8 10 Brokerage, duty and insurance will add to the costs Total factory cost 100 80 103 Baseline set on local supply 20 40 60 80 100 120 LOCAL BEST CASE WORSE CASE

We built Cost Trade-off Models … LOCAL versus Off-shore

BALANCED SOURCING

BALANCED LANDED COST

LOCAL BEST OFF-SHORE WORST OFF-SHORE

?

OFFSHORE SAVINGS CAN GO POSITIVE OR VERY NEGATIVE

OFFSHORE LOCAL

We built Cost Trade-off Models … LOCAL versus Off-shore

LOCAL BEST OFF-SHORE WORST OFF-SHORE

?

Boston Consulting Group (BCG)…… Predict BALANCED LANDED COST parity by 2015 in most sectors Due to exchange, tariffs, Transportation, wage inflation, other hidden drivers….

The REAL Costs to Manufacture OFF-SHORE will continue to rise.

OFFSHORE LOCAL

BALANCED SOURCING

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GLOBALIZED MANUFACTURING

? ?

START THINKING LEAN & GREEN

What is happening in the USA?

Resurgence of Manufacturing in USA … Now at “tipping point”

via lower US exchange rate ……………………………... Rethinking of globalized supply

Balanced Sourcing Cost trade-off modeling

Re-shoring !!!

BOSTON CONSULTING GROUP STUDY ..April 20, 2012

More Than a Third of Large Manufacturers Are Considering Reshoring from China to the U.S.

BCG Survey Confirms That Rising Chinese Wages, Logistics, and Other Factors Are Prompting Companies to Rethink Where They Manufacture……

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What is happening in the USA?

Resurgence of Manufacturing in USA … Now at “tipping point”

via lower US exchange rate ……………………………... Rethinking of globalized supply

Balanced Sourcing Cost trade-off modeling

Re-shoring !!!

Reasons.. Transportation costs Labor costs Product quality Customer location Ease of doing business Most next generation products will return if: Hi Technology (Embedded Innovation) Low/Mid labor content (less than 50%) Value adding supply chains Large shipping cost % Integrated with customer services

Resurgence of Manufacturing in USA … Now at “tipping point”

via lower US $ value …….. Rethinking of globalized supply

Balanced Sourcing Cost trade-off modeling

Re-shoring !!!

Maybe not us with a RESOURCE ESCALATED

TBM

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57

CANADA / US $ EXCHANGE

(Appreciated)

Not Entitled to $ Appreciation

Created by Resource boom/ hedge funding. Appreciates Currency Reduces ability to Export \ be productive Reduces Competitive Manufacturing Increases exposure to global instability

75 cent $

It is creating… lost Prosperity!!

RESOURCE ESCALATED

0.5 1.0

100 cent $ 1985 1990 2000 2010

Resurgence of Manufacturing in USA … Now at “tipping point”

via lower US $ value …….. Rethinking of globalized supply

Balanced Sourcing Cost trade-off modeling

Re-shoring !!!

Maybe not us with a RESOURCE ESCALATED

TBM

Experts are certain Manufacturing will Re-shore to North America ……. ……..but not sure it will be Canada!

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But….Are WE Ready???

TBM

M

TBM

North-American Manufacturing Prosperity for all. Industry

TBM – The 3 Parallel Imperatives

Educators

Government M

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Government

TBM – The 3 Parallel Imperatives

M

Provide Involvement and support
Embrace Waste-Free Forms of Globalization
Focused POLICY and PLANS

Policy support for TBM

FISCAL POLICY

Fix Canadian Dollar to get to the same “tipping point” with the USA
Adjust Ultra low Interest Rates to a “normalized” level
Lower taxes for investments on new products / technologies / equipment and skill training.
Install a Global based carbon tax to reduce waste/usage of energy and combat global ineptitude

TRADE POLICY

Embrace a return toward a Localized TRADE bloc.
Reduce Non-North America IMPORTS via Controls and better support Strategic EXPORTS
Participate in a Knowledge Based Economy .. BUT with Improved IP controls

Improve Canada-US border and regulatory differences INVESTMENT POLICY

Re-deploy capital Investment into local value adding industries.
Simplify industry Incentives (SR&ED etc)…. hold industry 100% accountable for results
Encourage innovation and the commercialization of new products and technologies

EDUCATION / INFRASTRUCTURE / ENERGY POLICY

Implement Industrial Education/Training via an Integrated Apprenticeship system
Fix our declining infrastructure (Energy/logistics/communications)
Improve regulatory efficiency. (Make it easier to do business..safety/legal/human rights etc)
Simplify product and process compliance requirements, remove wasted efforts.

Define BOLD Policies to …Take Back Manufacturing.

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North-American Manufacturing Prosperity for all. Industry

TBM – The 3 Parallel Imperatives

Educators

Government

TBM

North-American Manufacturing Prosperity for all.

TBM – The 3 Parallel Imperatives

Educators

Education must add value to its citizens
Ensure it is value adding to the economy
Re-Balance education versus training
Integrated Apprenticeship programs.

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Integrated Career Pathway

Apprentice Journeyperson Technician Technologist Engineer

Industry Recognized Skills and Education Development Progression
Apprenticeship Pool From The Best, the Brightest And The Most Talented
Become The Learning/Occupation Destination Of Choice for High School Students
Apprenticeship Courses Transferrable And Articulated To Other Post Secondary Colleges And

Universities, Supporting Lifelong Progression In Learning As Shown In Career Pathway Above

Industry must lead on driving and installing this system. ( So..can’t complain about skill shortage!!)
DO IT!...... Before we loose the Industrial Experience of the Baby Boomers!!

Trade Technician Technologist Engineer

Eng Degree Eng Diploma Tech Certificate Trade Certified

High school

Manufacturing needs YOU !

VISION ..Re-focus on New Apprenticeship Programme

TBM

North-American Manufacturing Prosperity for all. Industry

TBM – The 3 Parallel Imperatives

Educators

Government

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TBM – The 3 Parallel Imperatives

Educators

Industry

Gain a Vision & Aptitude for all forms of “INNOVATION”
Use BALANCED SOURCING…. Run the numbers!!
Reinstall a “MINDSET” for Continuous Improvement
Install New Technology and Capital Re-investment
Re-build LOCALIZED Manufacturing Communities (Incubators)

North-American Manufacturing Prosperity for all.

Manufacturing has an IMAGE problem!!

Most manufacturing-based businesses are beyond dispirited…. Our Politicians/Government/Population have little understanding of business and manufacturing…We must EDUCATE them!! Manufacturing is deemed:

Dark, Dirty, Dangerous, Deafening and Difficult….

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….. And Smelly!

M

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69

TBM

EXCITE the NEXT GENERATION

Change ….

The Image of Manufacturing

Let’s Make Manufacturing

THE TBM ROADMAP

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Our Support to Industry

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SME Positional Survey

Business Process Improvement / LEAN Strategic planning / Innovation New Product Introduction & Rapid Prototyping Balanced Sourcing Production Process Excellence / Supply Partnering Distribution and Inventory management Manufacturing Technology Toolkits Business Systems & Computer Integrated Manufacturing Management technique upgrades Organizational learning systems / Apprenticeship program

The TBM Evolution Plan

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Self Calibration

REVIEW

TBM STEP #1

Lets get organized…..

TBM…. STEP 1.

Take the …..

TBM Self Positioning Survey

Help us to Help you!

TBM

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9/16/2012 37 TBM SURVEY

www.SME-TBM.org

THEN PUSH HERE Do You Care About Manufacturing in CANADA??

TBM Self Positioning Survey

Help us to Help you!

POLICY EDUCATION Industry Excellence

TBM

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SME Monthly TBM Journey………

January

TBM Overview

February

Innovation

March

Balanced Sourcing

April

Industrial Education and Training

May

Computer Integrated Manufacturing

September

Rapid Prototyping (Methods/Technologies)

October

Survey results … TBM Roadmap

November

TBM Roadmap Roll-out

December

Productivity and Lean

We are holding regular SME Chapter meetings with TBM as the central theme With one of the TBM imperatives discussed as a special topic each month. 76

Take Back Manufacturing

www.SME-TBM.org

FOR OUR KIDS!!!

Let’s Re-engineer Our Economy to Work Again!