Manufacturers Continue to Sing Happy Tune in Latest Survey

Business activity continued to grow strongly in New York State, according to firms responding to the June 2018 Empire State Manufacturing Survey, the monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Headline general business conditions index climbed five points to 25.0, indicating a faster pace of growth than in May. Both the new orders index and the shipments index showed ongoing solid growth, with the former rising five points to 21.3 and the latter moving up four points to 23.5. Delivery times continued to lengthen, and inventories edged higher. Labor market indicators pointed to a substantial increase in employment and longer workweeks. The prices paid index remained close to last month’s multiyear high, indicating continued significant input price increases, and the prices received index remained elevated. Looking ahead, firms were more optimistic about the six-month outlook than they were last month.

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Customized Products: An Untapped Market?

Fun Fact readers: the laptop used to type this post, and many others on this blog, is a custom ordered one. As the latest gadgets become central parts of our lives, collecting our personal information and helping us through the day, is it really surprising that research shows a growing number of people want products made to their exact specifications?

The study revealed the most important reasons for customization are storage capacity, processor/speed and screen style/size. In addition, the top reasons for upgrading more frequently are that devices are becoming outdated more quickly, more affordable, and more convenient to upgrade.

We also found stark generational differences with half of millennials expecting to increase the upgrade frequency of their small electronic devices like phones and tablets. Compare that to 32% of Gen X and 26% of baby boomers who believe they will increase upgrade frequency.

Offering products that are customizable, from color to processing power to size, will be critical as businesses seek out new revenue streams and greater customer loyalty. As these responses clearly indicate, there is a large opportunity for businesses willing to rethink manufacturing to develop more diverse product offerings.


The Factory in 3D Printer Age

3D Printing has been a big focus here at the Council, and all over the world really. It’s the sort of innovation that once seemed confined to only the most fanciful science fiction stories made into reality, you’d be hard pressed to find someone who wouldn’t be at least a little interested. In this bit of speculation on the tech’s future, the evolving concept of the factory is explored:

As these 3D printers advance and become more capable, they will evolve into a huge and vastly more capable 3D printer. Except, rather than printing parts, these huge printers would print things like fully capable automobiles. Granted, we are likely a couple of decades out but talk about disruptive technology revolutions this could be a massive game changer because it anticipates a time when, rather than regional warehouses, Amazon might have regional mega printers.

What do you think?

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GM: Autonomous Cars are the Future

Demand for traditional vehicles is waning, and General Motors is preparing for the shift by investing in Cruise Automation, Lyft and other autonomous vehicle technologies, says General Motors CEO Mary Barra. “Autonomous technology that’s safer than a car with a human driver is coming, and it’s going to get better and better and better with technologies like artificial intelligence and machine learning,” she says in an interview with Fortune.

This is probably a good time to point out that we discussed the future of autonomous cars two years ago in the spring 2016 issue of HV MFG. You can read that article here.

Manufacturing’s Future: Small-Batch for Small Companies?

Demand for low-volume custom orders is increasing, creating opportunities for small companies on their own and in partnership with larger manufacturers. World Emblem CEO Randy Carr explains how:

The rise in adoption rates of just-in-time manufacturing processes places increasing pressure on large and small manufacturers to shorten delivery times from weeks to days—or even overnight. Working with small batch manufacturers can help large-scale producers improve their business agility and compete with smaller, more nimble companies.

A Deloitte Insights report summarizes the manufacturing sector landscape perfectly: “The changing economics of production and distribution, along with shifts in consumer demand and the emergence of “smart” products, are pushing manufacturers to explore radically new ways of creating and capturing value.”

Custom-made products for smaller niche markets are available and accessible with just the click of a mouse or tap on a screen. That raises consumers’ expectations for getting exactly what they want, when they want it. The good news: this creates new business opportunities for manufacturers that can deliver the goods.

Read more about the possibilities

Why Two High Profile Companies Face Shortages of Signature Products

Ford is suspending production of its F-150 trucks. The FDA is warning of a nationwide shortage of EpiPens and their generic alternative.

In a strange coincidence, these two high profile glitches in the manufacturing process are occurring at the same time. Fortunately, there is no reason to think this is a sign of things to come. The FDA attributed the EpiPen shortage to manufacturing problems. Meanwhile, a fire at a supplier’s facility caused Ford to run out of parts for the nation’s best-selling vehicle.

Hopefully the two events will serve as an important reminder to Americans of just how delicate a manufacturing supply chain is.

Read more about the Ford shutdown

And the EpiPen shortage

In Connecticut, Apprenticeships can lead Straight to Full Time Jobs

Another day, another apprenticeship program, or should I say, a pre-apprenticeship program? This one located in Connecticut and combines in-class education with a special online curriculum called Tooling-U that allows students to graduate with full credentials and sometimes even a job.

Hernandez, 18, is graduating this month with a pre-apprenticeship at AdChem Manufacturing Technologies Inc. (ACMT), a Manchester company that builds parts for aerospace company Pratt & Whitney.

“This is what I want my career to be now,” she said at ACMT on Tuesday, her regular shift at the 48,000-square-foot manufacturing facility. “Synergy [High School] gave me everything I need.”

She landed the part-time job in January through a new program that takes students through a 72-hour, online curriculum, called Tooling-U.

Run by the Connecticut Center for Advanced Technology (CCAT) in East Hartford, it’s one of two new programs this year registered with the state Office of Apprenticeship, which credentials workers once they complete paid training programs.

In Waterbury, the Manufacturing Alliance Service Corp. is running its version with 12 students from three city high schools: Wilby, Kennedy and Crosby. They’re going to finish Tooling-U before trying to sign on with any employers, career development coordinator Kevin Canady said.

In East Hartford, though, six of the 14 students taking Tooling-U have already been hired part-time, lending a hands-on component to their education.

And their employers are already talking about full-time positions.

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Coming Soon: Tablets on the Shop Floor

Desktops are so last decade. Human-machine interfaces are among the use cases for tablets on the factory floor, notes Panacea Technologies executive William Aja, pointing out the technology’s ability to improve life-cycle management:

Before you grab your pitchfork as many industry professionals might like to, hear me out. Tablet-controlled factories are becoming a reality, and thin client adoption was the first step.

From our own experience, we launched a tablet-controlled Benchtop Bioreactor that has been received extremely well. Users love it for its nontraditional interface, and we firmly believe you’ll love tablet-based human-machine interfaces (HMIs) too. The idea of tablet-controlled processes will bring skepticism and chuckles, but there are three distinct reasons we believe their adoption rate will increase.

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The Problem with Manufacturing Growth: Rising Overtime Costs

American manufacturing has been enjoying a a period of tremendous growth, but there’s an unexpected downside to that: Manufacturers face rising overtime costs as they need to keep workers on longer to keep up with production demands.

For companies shelling out more pay at time-and-a-half rates, the wage drain cuts into profits and can affect new investments. For workers who qualify for overtime, the extra hours can be a boon and a burden.

Randy Green, a foreman at Saunders Construction Inc., has been working 55 to 60 hours a week to help build a 24-story apartment building in Denver. He says it has been hard to balance his work schedule and time with his family, including his 11-month-old son, but the money is hard to pass up.

In a typical week, Mr. Green earns $500 to $600 in overtime, which sometimes nearly doubles his regular paycheck. “I’ll probably do it for as long as I can,” the 37-year-old said of his six-day workweeks.

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April 2018 Empire State Manufacturing Survey

The Federal Reserve Back of New York reports still more good news for manufacturers as business continue to grow, with the only bad mark being firms’ reported optimism about the next six months declining again:

The headline general business conditions index, at 15.8, remained firmly in positive territory, although its seven-point decline from its March level pointed to a somewhat slower pace of growth. Similarly, the new orders index and the shipments index suggested ongoing, albeit more measured, growth, with the first index falling eight points to 9.0 and the second declining ten points to 17.5. Delivery times continued to lengthen, and inventories moved higher. Labor market indicators pointed to a small increase in employment and significantly longer workweeks. The indexes for both prices paid and prices received remained elevated. Firms’ optimism about the six-month outlook waned sharply, with the index for future business conditions plunging twenty-six points to its lowest level in more than two years.

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