Don Draper and the Value of Free Days

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From the very first episode I was hooked on Mad Men. I loved the clothes, the sense of style, and the great story lines. Being a Kellogg School of Management alumnus, I definitely have a soft spot for anything regarding marketing. So this show, which revolved around the drama of a marketing agency, was perfect for me in so many ways.

I have been traveling a lot lately and thankfully due to the invention of the DVR, I never have to miss my favorite shows. I was filled with great anticipation and sadness when I sat down during Memorial Day weekend to watch this beloved series wrap up and come to an end. I had planned to watch the last 4 episodes back to back and host my very own Mad Men marathon. 

I was not surprised to discover that once again, Don Draper was dropping out. It wasn’t his first time during this series, so I was anxious to see where it would lead this time. The thing about when Don goes MIA he really goes MIA.

Today with technology it is much harder to really truly disconnect from work. It really struck me watching these last few episodes of Mad Men how different our lives are now with the amount of instant access we have twenty four hours a day through all the technology that surrounds us on a daily basis.

As a long time student of the Strategic Coach™ program,  I have learned since our very first session the importance of “Free Days™”. The goal of a Free Day is that for a period of twenty four hours you truly and completely disconnect from your work life. Now saying this, understanding this, and putting it into practice are very different things. I have to admit I love my smartphone. I do probably 75% of my job now on my Samsung Galaxy Note 3. I love that thing and I would be lost without it, but the belief is that Free Days are in fact a necessary precondition for periods of high achievement. When you take quality time away from your business, you come back with a new perspective. You find that you’re incredibly creative, and full of fresh ideas and innovations. You quickly find solutions to long-standing problems, realize more efficient ways to run your business, and innovate new client solutions. When you’re tired, you stop creating, taking risks, communicating, and delegating. Taking regular Free Days helps to keep you constantly refreshed, creative, and energized. Smart thinkers are well-rested—they have the brain power to think differently. Free Days make sure the “best you” shows up every day. Most of the time when Don went MIA he spent the first few days sleeping. He would become well rested and then an experience or a conversation would  lead to insights that created "ah ha" moments.

I have found that there is another strategic byproduct of taking free days, it helps to grow your team. When I am not around for them to ask for help, it forces them to rely on their best judgement and skill sets.  They are forced to have to figure things out and make decisions without me. I normally find that the group has come up with a better and more creative solution than if I had been involved.

I realized in watching the last few episode how great Don was at taking free days throughout the whole series. Obviously it would have been better if he had actually taken them on a more regular basis, but at least he had the self-awareness to know when he really just had to disconnect and get away. What I really envied was that he did it with no regrets, no guilt, and no worries for the agency. 

I can honestly say, I took a page out of Don Drapers book as I enjoyed my recent summer vacation in Maui. My goal was to truly disconnect and fully enjoy my free days. Although, I didn't fully disconnect, I got recharged and enjoyed several good books. (Oh how I enjoy reading!) I knew that time away was important to allow my team to develop and I returned with ideas that will grow my company and myself. It may be less exciting than teaching the world to sing in perfect harmony, but it’s enough for me.

How do you plan to spend your free days this summer?

California’s Secret Sauce—What’s the Recipe?

In addition to being chairman of the California Manufacturing and Technology Association Executive Committee, I have the honor of serving on the National Association of Manufacturers board of directors. During the spring board meetings of both organizations, there was a general sense of optimism for the state of manufacturing in our country and California. Nationally, the manufacturing base has grown by 7.5 percent. Economic activity in the manufacturing sector expanded in February for the 26th consecutive month, and the overall economy grew for the 69th consecutive month, according to the nation’s supply executives in the latest Manufacturing ISM® Report On Business.

Twelve of the 18 manufacturing industries reported growth in February in the following order: paper products; printing and related support activities; furniture and related products; primary metals; nonmetallic mineral products; food, beverage and tobacco products; miscellaneous manufacturing; fabricated metal products; machinery; transportation equipment; electrical equipment; appliances and components; and chemical products. The three industries reporting contraction in February are: textile mills; apparel, leather and allied products; and computer and electronic products.

All the data is good, but why am I optimistic about being a manufacturer, especially one located in California? I travel a lot, so people in foreign countries tend to ask where I’m from. If I tell them the United States, I tend to get a nod—maybe a smile. Usually they ask further, “Where in the US?” When I respond “California,” their face lights up and they’re excited to speak with me. In some ways, the response I get makes me feel a bit like someone famous. There is a worldwide awe about my state.

I say “my state” because I am a rarity: a California native. My father’s grandmother traveled in a wagon to California from Missouri in 1853, got here in 1854 and settled in Healdsburg. I love my state. I am passionate about all that is good about my state. It is truly the land of golden opportunities. But why? What elements make up our state’s “secret sauce?”

1. Resources
California is large and holds vast natural resources. A jaw-dropping coast line, forests, water, sun, wind, fertile ground, agriculture, minerals, oil and on and on.

2. Environment
We have great weather. Need I say more? A temperate climate spurs productivity and prosperity.

3. Education
We are blessed to be a state with so many world-renowned public and private colleges and universities. We also have a great supportive network of community colleges. There is an incredible depth of knowledge we are cultivating and inspiring within our state.

4. Innovation
Our state has been leading the country and the world with innovative ideas since the beginning. Silicon Valley and all it has generated is just the latest manifestation of that trend.

5. Technology
We are a state of early adopters. A fertile ground for fostering the acceptance and exploitation of technological advances. This is especially true in the manufacturing sector. I can’t wait to see how the internet of things and big data will change the face of manufacturing. I know California will be leading the way.

6. Glamour
Hollywood. We are home to creating dreams, be it on the big screen or TV. We have Disneyland, the original home of making dreams come true for children and adults.

7. Money
California as a state has the eighth largest GDP in the world. We are effectively a country unto ourselves. Money attracts money and we have a lot of it here. We are also home to some of the biggest VC and angel funds out there.

8. Diversity
Our state is a melting pot of people. The rich diversity of people who come to California to make their dreams come true continues to fuel our state toward prosperity.

9. Spirit
It is a state of pioneers. As with my family, many who have come to this state took great risk to do so. They came on the belief of a better life, of the belief this state was a place they could make they dreams come true.

So maybe that is what I am seeing in the faces of those I meet. Is that we are a place where dreams can and do come true. What do you think? Did I identify all the ingredients? What did I miss? I’d love to hear from you.

We’re a Lean, Green Manufacturing Machine!

Several years ago I wrote about being Lean and Green. I asked the question – “Is it hard to be 'green' or is it really just more the discipline of looking at how to run your business in a more efficient way?” One that improves your bottom line as well as reduces your impact on the environment; not regulated by government, but regulated by common sense to use the least amount of resources (lower costs) to produce your product.

So with the 45^th Anniversary of Earth Day I felt it was timely to go back and think about this topic once again. Now let me just say I am not talking about “green” to the level like my state of California is mandating with AB32 or the Green Chemistry Initiatives.

Bishop-Wisecarver Green Infographic

I am talking about common sense, how do I run my company to the best of its ability and make my product for a profit and impact the environment as little as possible? I understand that there are some companies that won’t make changes unless mandated, but let me just live in a world, for a few minutes, where people are responsible for their actions and feel a responsibility to run their companies for the good of the bottom line, as well as the environment.

At Bishop-Wisecarver, we realize the best way to appreciate our planet is by doing something to help every day and we have implemented “lean manufacturing” practices throughout the company that reduce waste of all kinds.  Whether it’s time, material or talent, lean manufacturing aims to maximize efficiency in numerous ways such as smartly allocating resources, maximizing space, recycling old material and applying employees to job’s best suited to their skills.

This sounds admirable, but what does it mean in reality for our customers and planet?  For one customer, it meant better utilizing their current space and not having to purchase, or build, an additional site. Our engineers provided product solutions that saved them space and kept them fully productive in their current location.

For another customer, it meant implementing our DualVee® wheels and racked track into their machinery.  It saved at least 10 hours per week that had been spent shutting down production to wipe down rails and belts. And you know those employees who had to wipe down the rails are happy to be doing something else with their time! Bishop-Wisecarver also provided special parts machining for a customer so they didn’t have to purchase equipment or space to manufacture it themselves. It also allowed the customer to order only as needed, thus reducing extra inventory storage costs or concerns.

Lean manufacturing is a solid, cost effective business philosophy, but we want it to be more than that – we use it to innovate and design smarter solutions for our customers.  And, in doing so, we are helping conserve, and best utilize, our planet’s resources. We think that’s the best way to truly celebrate Earth Day – everyday. What do you think?

Pi Day 2015 – Combining Math & Food for a Celebration of the Century

Pamela Kan, President
Photo: Melsha Nicole Photography

Full disclosure, math is not my best subject, in fact it ruined my chances at becoming a pharmacist, but when 3.14.15 comes around only once in a century, we need to celebrate!  While I may not be stellar at math I love STEM and making sure our kids are getting a great STEM based experience in school. So we combined two of our favorite subjects – math and food – and built the first ever Bishop-Wisecarver Pie Making Machine in honor of Pi Day 2015.  You won’t find it added to our sales catalog just yet, but you can check out what products we used to build it in a list I’ve included below.

Who says manufacturing, math and technology can’t be fun?  We made pies, had a pie eating contest and then threw, smashed and “gently placed” pies in the faces of our colleagues.  No matter what method was used, the pie made its mark. You can’t fake this kind of fun and you can check out the results in this short video.

We had fun with this historic event and made a big deal of this at our California headquarters – specially designed bright blue Pi shirts worn by all, towels filled with whip cream from wiping faces and lots of laugher echoing on the plant floor. I think I had red icing in my eyebrows for a day! Sounds like a kindergarten class, but that’s what I love about our company – we know how to work hard and play hard together.   

Our Pi Day 2015 event highlights two of the many reasons I love leading the Bishop-Wisecarver team. First, we enjoy what we do and the people we get to work with on a daily basis.  We spend a lot of hours, days, months and years with some colleagues and these relationships help us get better personally and professionally, as individuals and as a company.  When I look at our silly video, I see the smiling faces, but I also see the “stories” of each of the people represented. I know when they started working at Bishop-Wisecarver, the projects they’ve helped make successful and the extra hours they’ve put in to helping a customer realize success.  We don’t think it’s old-fashioned to say we are like a family here – that connection makes a positive difference in everything we do.  And, it’s why we can smear a pie in someone’s face and then go enjoy a beer or a round of golf together.

The Bishop-Wisecarver Family
Photo: Melsha Nicole Photography

Brian Burke, Product Manager
Photo: Melsha Nicole Photography

Secondly, this event is just one of the many ways we try to show students that subjects like math and science, and industries like manufacturing, don’t equate to a boring career.  Learning how to build a pie making machine wasn’t part of my high school curriculum, but when I tell students about our machine, or they see the video, it will open up possibilities and ideas they hadn’t considered.  Helping students understand the opportunities in our manufacturing world is one of our top priorities at Bishop-Wisecarver. We talk in classrooms, welcome tours of students, mentor in a variety of programs and sponsor local science and engineering events as well as several FIRST Robotics teams locally. We are very proud to also sponsor FIRST robotics at the national level.  We do all of this as a way of serving and educating the students of today who will be the employees and inventors of tomorrow. And tomorrow is coming faster and faster all the time! So we made pies, made a mess and celebrated our love of food and math.  Pi Day 2015 was truly a celebration for the century!

Pamela Kan, President
Scott McClintock, VP of Marketing & Technology
Photo: Melsha Nicole Photography

The automated pie making machine is based upon a LoPro® Linear Actuator. The primary linear axis is a lead-screw driven LoPro with a rotary axis made of HEPCO Motion PRT2 360-degree ring. Both axes are driven by servo motors via LabVIEW development software. The machine also has independent mechanisms for applying whip cream and frosting. 

Why America Needs More STEAM Power

I must admit it has been exciting to see manufacturing making headlines so much of late. The topic of manufacturing appears to be a current darling of the political talking heads. Much has been discussed about the role of manufacturing in the U.S. economy and how manufacturing will be the engine to power us out of this sluggish economy.

When you look at the data it is evident that manufacturing has all the right stats to power growth in our economy. The higher wages paid versus service sector jobs ($17k per year) and the number of companies supported in the supply chain for every manufacturer (multiplier effect of a $1.50 per $1 spent) just to name just a few.

On the flip side of all this positive talk about how manufacturing will drive our economic recovery is another reality — the vast skills gap facing all manufacturers in America.

For manufacturing to exist in this country it has to be highly automated and on the cutting-edge of technology. These changes are driving the need for a manufacturing worker that is different from decades past. While much is written about the need for a STEM (science, technology, engineering, and mathematics) based education, school districts and states are not hearing the message.

In February of this year, The State Board of Education decided California eighth-graders will no longer be required to take Algebra 1... This is taking our children’s education in the wrong direction! We're losing focus on STEM, but is it the silver bullet we hope it is? Many people are coming forward now saying that advanced manufacturing needs more than just STEM focused lessons. What's missing? Art.

STEAM (science, technology, engineering, ARTS, and mathematics) may seem to be an unlikely pairing but it is not as strange as you may think.

Innovation requires a creative mind and what better training ground than the arts to open up the realms of creativity? For example, 3D and additive technologies require the ability to create in multiple dimensions. But I caution how we build a STEAM based curriculum — it troubles me to see so many graduates earning degrees without practical application skills needed to make them employable.

America at one time had one of the best educational systems in the world. Even with the decline of the system, we're still leaders in innovation and the entrepreneurial spirit. We must find a way to bring STEAM based curriculum to our K-12 system, and it is critical that we make these programs engaging and hands-on. FIRST robotics is a great example. Together, we need to push our kids to think creatively and scientifically at an early age.

Then, we have to continue supplying the most current STEAM based knowledge to our universities and community college systems. We need to show the world how this can be done, and that it can be done. For if we can excel at solving this challenge, America will be able to STEAMroll the rest of the world.

Bridging the Manufacturing Skills Gap

I was very interested to see a recent opinion article in the Wall Street Journal (WSJ) written by Brad Smith who is an Executive Vice President and General Counsel for Microsoft. The piece ran on Friday October 19, 2012 and was entitled “How to Reduce America’s Talent Deficit”.

Credit: servicesphere.com

The article caught my attention for a couple of reasons. Those of you who follow me through social media and my blog know that I am very passionate about career technical education as well as Science, Technology, Engineering and Math (STEM) education within the K-12 system. I have recently been appointed by Governor Brown to the California Workforce Investment Board (CWIB) and I am eager to help make a positive impact on the development of the workforce in my state of California. My attention was piqued at first due to the article being written by someone from Microsoft. Why? Because as a manufacturer of linear motion products located in the East Bay I am constantly competing for talent against the Silicon Valley. I was really shocked to read that many of my challenges in finding skilled employees are the same as those experienced by Microsoft.

Like Microsoft, we have had positions remain open for months and months. My assumption was that I was losing out on talent to the Silicon Valley, but now I see that the problem is far worse than I originally thought — it is a systemic failure of our current educational system.

How have we created such a disconnect between our educational institutions and the needs of business? I find it troubling that we are not graduating students with the skill sets that actually make them employable.  As Mr. Smith writes in his article, “Thus the economy faces a paradox. Too many Americans can’t find jobs, yet too many companies can’t fill open positions.”

Mr. Smith calls for a national “Race to the Future” that would provide funding and incentives for states to:

• Strengthen STEM in grade schools by recruiting and training teachers to the Common Core Standards and the Next Generation Science Standards.
• Broaden access to computer science in high schools. For manufacturing jobs this has to also include opportunities for hands on learning that reinforces a STEM education. Programs such as FIRST robotics need to be available in every school.
• Help colleges and universities raise their graduation rates. I think this does not address the fact that an alarming percentage of students never even make it to a four year college. In the state of California we now experience close to a 30% drop out rate from our high schools. We need to focus on graduating students from high school before we worry about college. There also needs to be strong financial support for our community colleges and acknowledge them for their role in training our workforce with technology specific skills. Career technical education is becoming more and more advanced each day in parallel with the increase in technology and automation that is occurring in today’s manufacturing facilities.
• Expand the capacity of our colleges to produce more STEM focused degrees.

I couldn't agree more! But one big issue that Mr. Smith is not addressing in the last bullet point is that you can only offer STEM related degrees when there are enough people interested in those programs. When being an engineer is not highly valued in our country and it is a struggle to get students to enroll in a class with the word "manufacturing" in it (see my blog from October 29, 2012), no wonder we can’t produce enough degreed and skilled workers to satisfy our industry needs.

I would love to get your feedback on this subject. I feel this is a true crisis facing our country and the state of California. As I fulfill my duties on the CWIB and as chair of the California Manufacturer’s and Technology Association (CMTA) I want to make sure I'm championing for efforts with the most direct impact on the needs of industry that will get the most people employed.

When Did Manufacturing Become a Dirty Word?

I was recently asked to join a regional panel at the RFI (Request For Information) Workshop on Building the National Network for Manufacturing Innovation at the Beckman Center at UC Irvine. Don Norman, member if the National Academy of Engineering, co-founder of the Nielsen Norman Group, and author of “The Design of Everyday Things” gave one of the welcoming talks at the start of the workshop. One of the stories he shared with the group was particularly troubling and it deeply saddened me.

Norman told us that Northwestern University had a graduate program titled, “Master of Management and Manufacturing”.  If you were to search for this program now you would only find it listed as MMM. In fact, finding the word manufacturing on their website is difficult. At MIT they took similar action, changing a joint program with the Sloan Business School now known as LGO (Leaders for Global Operations). In both scenarios the enrollment for these programs INCREASED after the word manufacturing was dropped from the program name. The word manufacturing has such negative connotations that it is avoided in marketing educational programs.

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Infographic, 5 Myths Debunked

What has happened in our country to make our next generation so turned off by the word manufacturing?

1. Its Dirty. Too many kids and their parents still see manufacturing as a “dirty” job.  This is far from true, especially in the state of California. Environmental, health and safety laws have created clean and safe work environments. Our facilities lead the world.  The rise of lean and continuous improvement cultures have made many manufacturing facilities almost clean enough to eat off the floor (I say this with the five-second rule in mind).
2. It’s Dumb. Wrong! Manufacturing drives the majority of innovation and R&D investment in our country. Manufactures are leading the way in new technologies and the design and development of products that improve our daily lives and the welfare of people around the world. If you want to be on the cutting edge, then you want a job in manufacturing.
3. It’s Boring. Images of the Henry Ford assembly line still exist in many minds. We have come a long way, baby! In fact, manufacturers like myself now have trouble finding the skilled workforce needed to run the type of state-of-the-art technology machines we now have on our production floors. Making chips fly takes brains and skill.
4. It’s Cheap. Wrong again! Manufacturing jobs on average pay 20K higher than service sector jobs. Manufacturing jobs are the back bone of a strong middle class.
5. It’s Dead. Excuse me? When is the world going to stop consuming? Why do we think manufacturing is a thing of the past when we as a nation are the largest consumer of goods in the world? The face of manufacturing may be changing in the US but it is far from dead. Just look at the DYI craze and the rise of the Maker Faire phenomena. Just thinking about the impact that additive manufacturing will have over the next decade is mind blowing.

I am happy to see that both presidential candidates are at least uttering the “M” word. But in my book, neither has really given manufacturing the credit it deserves for the role it plays in a strong US economy.

The Impact of Uncertainty

League of Women Voters

I dread presidential elections. It’s not just the endless chatter of political talking heads making news out of nothing that drives me crazy, it’s the impact it has on my business at Bishop-Wisecarver.

Every four years about this time, I start to hear the same story over and over from my sales team: Customers hesitate to place orders because of “uncertainty” in the market.

I get the fact that businesses don't like uncertainty, but I struggle to really reconcile why not knowing who the president will be prevents people from conducting business.

I often wonder if we tend to create our own reality around this concept. Are there so many messages in the media about uncertainty and fear that people overreact?

Do you see this type of “uncertainty” affecting your company? If you're a job seeker, has this been used as a reason to not hire at this time? How “uncertain” is the current state of affairs in your industry? Will getting past the November elections make a difference for your business? Tell me what you think in the comment box.

Does Your Wallet Reflect Your Mouth?

Credit:  Images of Money

At the start of the Olympics there was quite a brouhaha about the fact that the uniforms worn by the American team for the Olympics were not made in America. It appeared everyone was more than eager to jump on this band wagon and, to top it off, throw in an extra dash of China-bashing.

When was the last time you requested an American-made product? Do you check the country of origin before you buy? If an item is made in America are you willing to pay more for it to allow for the living wage and workplace and environmental regulations that produced that item?

I hear an awful lot of chatter lambasting companies that move production offshore but then I see the actual purchasing behavior of the masses voting for the cheaper non-American made product on a regular basis.

I have started trying to buy only clothes made in the USA. That has turned out to be pretty limiting. I have since opened it up to buying only from those countries that provide living wages and safe and healthy work environments; still not an easy task.

In our current economy, I can understand people choosing the cheapest option. But is that choice working against all of us in the long run? Then again, in the evolution of a “world” economy does it really matter where a product is produced?

How do you vote with your money? Do you go for the best bargain? Do you strive to support American industry? Does any of it really matter? You tell me.

Tell Me What You Want

I am honored to be serving my state and the manufacturing community with two recent appointments — CMTA Chairman and Workforce Investment Board Member. In an effort to identify the needs of industry, create career pathways that provide businesses with the skilled workforce they need, and to assist in putting unemployed and underemployed Californians back to work, Governor Brown has rebuilt and reinvigorated the state's long-neglected Workforce Investment Board (WIB). I am excited to serve on the WIB.

Those who know me or follow me through social media know how passionate I am about technical education opportunities for California's students and workforce.

The stripping of classes in our K-12 educational system that expose students to potential technical career opportunities is an embarrassment. The focus on our states’ four year colleges disenfranchises so many of our state's youths. I feel it has had a direct correlation on our dropout rate from high school. Our current dropout rate is at 23.7 percent, according to a report released in June 2012 from the California Department of Education. This reality then puts a huge burden on our community colleges that then serve the needs of these many students later trying to educate themselves in order to enter the workforce.

In June, I was elected to serve as chairman of the California Manufacturers and Technology Association (CMTA). I am so proud to be associated with this association. The staff is truly world-class and works tirelessly to defend and support manufacturing in our state. As a small manufacturer I feel that CMTA gives me a platform for my concerns to be heard. Being part of this association allows me to make an impact on the state of manufacturing in California. My desire is to see many more small manufacturers join me at the CMTA. Your membership in the CMTA does make a difference.

Our collective voice matters. The only way for us to affect a change is for us to speak up and be heard by our state politicians. So many of our politicians have never run a company and too many of them still believe that manufacturing is a dirty and unhealthy work environment for workers. They need to be educated that manufacturers provide some of the best jobs to be had in our state, and often, cutting edge environments using industry inspired innovations.

As I settle into these positions, tell me how I can help. What do you want me to champion? What do you want me to share with you through social media? I want to be confident that I am speaking for all of you who work within the manufacturing sector in California.

Focus on the Process and the Results Will Come

I am a huge fan of the Olympics. I am in awe of all the athletes and the dedication and training they put in to achieve the status of becoming an Olympian. As it turns out, this Olympics coincides with my vacation. This means I have the time to watch even MORE of the Olympics than usual.

Credit: CBS

Yesterday I was enjoying my morning coffee and watching the Olympics when on comes an interview with Kelci Bryant and Abigail Johnston, the two women who have broken the US diving drought in the Olympics and earned themselves silver medals in the women’s 3-meter synchronized springboard.

The interviewer asked them incessant questions, implying that their focus was on winning a medal. After about the fourth question on this subject, Kelci responded to him by saying something to the effect that they never focused on winning the medal. She continued by saying that what they did do is focus on the process of diving well. She then said that if they worked the process hard enough the results would come.  BRAVA! I said to myself. That is one very smart young lady.

I look to my own business and I can say the very same thing. Bishop-Wisecarver helps manufacturers and automation solution providers engineer linear and rotary motion products. Our 60-plus years of engineering expertise and best practices with more than 20,000 customers enables us to understand our customers’ design and application requirements, ensuring unique solutions that ship within two to three weeks. Our customers achieve 50 percent faster time to market, up to 100 percent lower maintenance and installed costs, product differentiation and longer product life.

What is the underlying backbone to being able to deliver this level of service to our customers? Our relentless focus on process. From lean/continuous improvement to engineering, sales and technology processes, we never stop improving our internal processes.

Scott Klososky likes to say the he who has the most data wins. I would revise that to say he who has the most data and best processes wins. Because, if you don’t have great processes, then you’ll never be able to truly exploit the data to its fullest potential.

So while setting the goal is important, it’s even more important to work on your processes because that constant refinement will result in achieving the goal.

What process has generated the biggest payoff to you? I’d love to hear your stories.

Someone help! Is there a machinist in the house?

I fly often, and often enough, that I have actually been on several flights where the call for a medical expert had been requested. The good news has always been that the call was answered in each of these instances.

As many of you know I get pretty passionate about the state of manufacturing in the United States, sided with a deep care for STEM education opportunities we are providing for our kids. The fact that as a nation we tend to no longer value skilled labor is a crime. It has severely affected our ability to remain the largest manufacturing economy in the world, but more disturbing, is that we have limited the opportunities for our children to exploit their talents and entrepreneurial spirit.

I was recently listening to some talking heads on television that said manufacturing was dead because we are now about the use of technology. What an ignorant statement! But unfortunately that is the belief still held by too many Americans. They still think of manufacturing like it existed in the days of Henry Ford — dirty, low wages, oppressive environments, relying on massive amounts of unskilled labor. We have come so far from that!

Almost every machine on my production and machining floor is run by a computer. Guess what, computers don't program themselves. Someone has to write the program that can create the final part needed, and if that’s for a multi spindle or axis machine, that starts to get fairly complicated.

Making chips fly and producing something out of raw materials is an art form as well as a technical skill and we are losing both at an alarming rate in this country.

The impact of this really hit home during my last quarterly sales meeting with my regional sales managers. As each one reported on their top priorities, they talked about the key issues with each customer and what was needed for the project to go to production. Over and over I heard them report that customers can't find the skilled labor they require to make their product. Granted, this is more than just machinists; their request for help includes needed support from mechanical engineers, CAD specialists, technical sales people, protection workers, programmers etc.

How sad that with the rate of unemployment we have in this country, we still don't have the skill sets we need to capitalize on the manufacturing opportunities we have available. How scary it is that when we call out for skilled and technical employees, the response is mostly silence.

Shame on us.

A Different Kind of Christmas Story

This is a time of year that many sit down and share traditional holiday stories with their children. Families reminisce and tell tales of past family members and of times gone by. As I sit here at my desk in my factory in California I also think of stories; one where California had a GDP larger than most countries, and one of where the United States had the best skilled workers in the world and could make anything the country needed or wanted.

As I visit high schools in my area and talk to kids, they are not hearing the story that the USA is still the preeminent manufacturer in the world. A story that is OK and should be revered when someone can take raw materials and make it into a desired end product and that having such a skill will pay you on average $20K more a year than a service-based job. A story of how America makes products in the greenest fashion in the world — especially here in California.

So my wish for 2012? That California and the entire U.S. will write a robust and exciting chapter for manufacturing. That once again, young students (both male and female) will see the promise of working in the manufacturing sector. That every student will be given opportunities for hands-on learning within the high school environment. That we provide every means possible to promote a STEM curriculum within our schools. That we once again as a nation have pride in our craftsmen, trade workers, machinists and engineers.

This is the chapter I wish to write within the story of manufacturing. What’s yours for 2012?

Who Will Win the Manufacturing Race?

I have just finished up a week of travel in India, and while I have been to Asia numerous times, this was my first visit to India. I toured numerous manufacturing facilities, and was very impressed with what I saw.

Our press in the states is filled on a daily basis with information about China and the country's growth. The Chinese government makes no bones about their plans around manufacturing and their desire to be the largest manufacturing power in the world. I wish our government had the same desire. The facilities in China are rapidly improving, as well as the infrastructure. Yet, after my visit to India, I wonder if in the end India may be the biggest winner of all.

I was impressed with what I saw in this country -- a desire to learn and succeed. In China, there is still a drive being pushed by the government, but I often feel that people operate in large out of duty to the collective good and the will of the government. In India, the desire rests at an individual level. Maybe I perceive India this way though because of my own American drive for personal growth and prosperity?

Only time will tell who will ultimately win the manufacturing race. Who knows, America may still recoup and regain the power it once had in manufacturing. But after this trip, I no longer believe it is a slam dunk in favor of the Chinese.

Everything Grows with Manufacturing

I am currently serving as Vice Chair of the California Manufacturers & Technology Association (CMTA). The CMTA staff worked very hard to put together the California Manufacturing Summit, "Everything Grows with Manufacturing" last week in Sacramento. I was happy and encouraged to see how many people showed up. I think the panel, with its diversity of interests, shows how important the topic is to our state, the economy, and our children's future.

Here are the top ten topics of discussion:

1) California cannot survive as a service based economy. A strong middle class is based upon the wages earned within the manufacturing sector (the average manufacturing job earns about 20K more than a service industry job).

2) We have to make technical education, with strong Science, Technology, Math, and Engineering (STEM), a priority for all schools for all children. Business has to get involved in helping schools develop their STEM curriculum. Young people need to get a marketable skill. Investing in career technical training is one of our best bangs for the buck. Apprenticeship programs are another way to advance the skill-set of our kids and grow long-term job skills, and prepare our future workforce. We have to open the door to the future of our kids. Eighty percent of California students don't go on to the UC system. Employment Training Panel funds (ETP) must be used in the best manner. California can't afford to lose these monies to the general fund. Workforce investment funds are needed to train for the needs of a higher skilled workforce. We need to see our schools as long term incubators.

3) Our skilled workforce is aging and we don't have a backup. We have to make manufacturing a focus again. Parents need to feel that it is a safe and smart choice for their kids to want to make a career in manufacturing. Kids have to see manufacturing as a cool, creative and innovative career choice and understand that manufacturing does pay well.

4) While California is the hot bed of venture capital, often the ideas are then produced in other states or countries. We need to keep production within our state as well. California dominates VC money because of the ideas and innovation coming out of our California university system. We are a financial innovator on a global basis. If California fails to attract the growth capital sector we will kill off our future. We currently have the JFK gap. JFK created a whole decade of enthusiasm by stating we have a purpose as a country. California is also a country. What is our purpose? A simple economic point, California is incredible at attracting the best minds into our universities but we completely lose the scale up after school.

5) Coast of Dreams. California needs an economic plan. It is shameful that a state that is the 8th largest GDP in the world has no defined economic plan. There is no economic development office for our state. This does not work for our state. This is about our democracy not just our state. We must create a vibrant private sector that allows entrepreneurs to take risks and build businesses and innovate. When people come together with a purpose we can get things done. Real passion makes a difference. We need to pick the most critical systemic reforms to focus on. A cabinet level position that reports to the governor to make business feel wanted, would be a great first step. We have to start marketing California. We had ten overseas offices at one time, now we have none. The private sector votes with their feet. We need to keep them here in California. In 2003 we shut down our trade and commerce offers, while other states were vastly expanding their offices. Even cities like Chicago are opening offices. We have to have an export and trade strategy. We have to acknowledge the problem. Stop the denial. We have depression era unemployment statistics in several counties in our state. This then leads to skills gaps in our workforce. California is still the innovation capital of the world and we need to get that message out and change perspectives. Texas is one cohesive state. California has to get its act together and got one purpose on both sides of the aisle. We need to develop a robust retention framework.

6) Globalization is not going to go away. California has an unfavorable business climate while other states are actively striving to improve their business climates. Supply chain is a vital piece of the pie for a vital manufacturing sector in California. We need to reduce the cost of manufacturing in California. We can take actions to change our policies if we have the WILL to do so. California is blessed by its visionaries that invested in our infrastructure and facilitated our golden area. Versus the choices we making now and cutting from our future. There is no commitment to how we are going to generate our future revenues.

7) Innovation - Research and development follows manufacturing wherever it goes. Small companies create a lot of innovative as well. We need to support the creation of new technologies. Manufacturing drives innovation not just entrepreneurs.

8) Going Green - The five largest clean tech deals where in California, a prime location for the bio-fuels market. We have the resources and the agricultural waste needed. A bio-fuel plant has to be within 50 miles of their source materials. California could really go after this market if it had the desire. It is a great opportunity for our state. But we have to build consensus across unusual allies to make this happen. Green business has to make good stuff happen sooner. Not just stop the bad stuff.

9) Regulatory Burden - The increased costs of doing business in California are well documented. But along with the costs comes an increase in time. Decisions by state agencies can take months or years. Don't drag out the answer; create a system that allows agencies to tell businesses yes or no faster. Site selection is a very metrics driven process. Why would a company chose to come into California with the current system? When companies are started here in California the easiest thing to do is to keep them here. California needs to focus on this issue first as to why business is leaving and/or not reinvesting in our state.

10) Create an informed state government. All government officials need to understand the regulatory impact of their actions. We have to get our act together and got one purpose on both sides of the aisle. California needs to establish a framework of leadership. Politicians tend to be risk adverse. But at this juncture California needs political leaders to take some risks. The governor needs to show up in the parts of our government where things need to get done. That would create an exciting future for our state. The governor needs to be an economic cheerleader for our state. Our state politicians need to demonstrate leadership that they care about a change in behavior. We are at a unique juncture in our states history. The best is yet to come for California.

CMTA Manufacturing Summit:
Moderator for the Day: Political Columnist, California's Capitol - Greg Lucas


Panel:
Bob Clesia, Boeing
Ross DeVol, Milken Institute
Bob Dutton, CA 31st District, CA Senate
Bob Epstein, E2
Mike Jimenez, CA Correctional Peace Officers Assoc.
Eric McAfee, AE Biofuels, Inc.
Gavin Newsom, Lt. Governor, CA
Art Pulaski, CA Labor Federation, AFL-CIO
Jack Stewart, President, California Manufacturers & Technology Association (CMTA)
Julie Meier Wright, CA Council on Science & Technology

CMTA overview of the summit - click here

"The Power Has Shifted" - Part 2

A good visual explanation of the shift in power to the customer. To read part 1 click here

The Power Has Shifted

I just finished reading “More consumer manufacturers selling online, competing with retailers” by Barry Shlachter. (Read more: http://www.star-telegram.com/2010/12/28/2731510/more-consumer-manufacturers-selling.html#ixzz1A72OsI1F) The article raises several good points about the shifting relationships between manufacturers and retailers. In my industry the same is true between manufacturers and distributors. The article states "The primary driver for all this is a more educated and informed shopper, who is getting more information through more channels," said Eric Best, CEO of Mercent, which offers online marketing technology and services. Best goes on to say "Manufacturers realize they can increase their margin, establish a more direct relationship with consumers and also be in a position where they're forced to reconcile the changing customer behavior with Facebook, Twitter and also mobile devices as points of engagement with their customers..."

I think the article missed the boat in focusing on who has the power – the manufacturer or the retailer. What is buried in the quote above is the obvious answer – neither. Now more than ever it is the customer. The internet has allowed our customers to source our products by whatever means they want.

Our customers now have the technology to interact with us as they want. They dictate the buying process. I get frustrated listening to circular arguments about who sold what to what customer. The bottom line is that the choice cannot really be controlled by either side anymore. The customer drives the choice. If we create barriers to purchase, getting information, engineering support, etc. the customer can find alternatives. The internet is full of businesses that make it easy to do business with them and are willing to play on the customer’s terms. And it is only a search term away on Google. And a computer is no longer even required; any smart phone can do this now as well. 

That is what I love about the explosion of social media. It is interactive. It is not really controllable, so you learn the good and the bad. You get feedback on a constant, real-time basis from your customers. It allows you one more channel for building relationships and providing the information and feedback channels in a method your customers want, need and may prefer.

Relationships between manufacturers and retailers/distributors need to focus on the customer, and servicing the customer’s needs. When that truly becomes the goal, it will be a win-win for all.

This week I was quoted in the WSJ. See the article below.

ECONOMY

AUGUST 11, 2010

Firms Spend More—Carefully

Equipment Purchases Make Up for Recession Cutbacks, Not to Raise Production

By JUSTIN LAHART

(Please see Corrections & Amplifications items below)

Companies in the U.S. are stepping up purchases of equipment and software at the fastest pace since the late 1990s. But much of the spending is aimed at replacing older equipment after recession-related postponements or to improve efficiency—not to raise production or boost hiring.

After one of the sharpest declines in spending on equipment and software, companies in the U.S. boosted their spending on such products at a 21.9% inflation-adjusted annual rate in the second quarter, after the first quarter's 20.4% increase, the U.S. Commerce Department said.

The second-quarter jump was the biggest since 1998, when enthusiasm for technology was running hot. It was a much stronger increase than what was seen after the previous two recessions.

That stands in sharp contrast to the muted hiring and lackluster consumer spending that have characterized the economy since it began growing again in the middle of last year.

International Paper Corp., for instance, cut capital spending to $534 million last year from $1 billion in 2008. This year, it expects to raise spending to about $800 million.

Some of the company's higher spending will add capacity in developing markets such as Brazil, where demand for paper products is growing. But in the U.S., where the bulk of International Paper's operations are, the money will go into maintenance, improving energy efficiency and meeting regulatory standards, rather than boosting capacity.

"Businesses invest when there's demand," said International Paper Chief Executive John Faraci. "There's not going to be any [U.S.] capacity expansion, or for that matter job creation, until you see an increase in demand."

American companies, particularly manufacturers, recently have been raising output without adding workers.

The Labor Department reported Tuesday that productivity, measured in output per hour of work, fell at a 0.9% annual rate in the second quarter from the previous quarter. It was the first quarter since the end of 2008 in which productivity didn't rise. That's a hint that companies may soon need either to increase workers' hours, hire new ones or install more labor-saving equipment.

Companies may keep increasing spending on equipment, computers and software even if they don't add capacity. Nomura Securities economist David Resler calculates that businesses didn't spend enough in 2009 on new equipment to offset the wear and tear on their existing equipment. As a result, the capital stock—the inflation-adjusted value of all business equipment and software in place in the U.S.—dropped 0.9% from 2008—its first decline since World War II.

Mr. Resler estimates that even with the recent sharp increases in capital spending, the total capital stock is still $100 billion less than it was two years ago. That suggests that capital spending could continue to grow strongly the rest of the year.

The rebound in capital spending and strong demand from overseas markets such as China have boosted companies that make equipment and software. Revenue at technology companies in the S&P 500 index was up an estimated 21% in the second quarter versus a year earlier, according to Thomson Reuters, and profit rose by 65%. Capital equipment makers such as Caterpillar Inc., Rockwell Automation Inc. and Illinois Tool Works Inc. reported large second-quarter sales and profits gains.

Sales at Bishop-Wisecarver Corp, a Pittsburg, Calif.-maker of motion systems used in everything from wood-shop machinery to food-processing plants, are up sharply from last year, and are on track to be as strong as in 2007, before the recession kickded in.

Bishop-Wisecarver President Pamela Kan thinks some of the rebound has come from companies trying to make plants more efficient, but she worries that many customers are catching up on projects put off during the downturn. That makes it difficult for her to gauge how strong business will be in the future and plan accordingly.

"I don't know how much of this is just pent-up demand," she said. "It's a finger in the wind now."

As a result, she's hesitant to hire, but is looking to add a few workers to the company's payroll of about 45. She doesn't plan to make any big purchases, in part because the company did major upgrades to its equipment right before the recession hit.

In general, manufacturers, which are benefiting from the global economic upswing, are boosting capital spending more than services companies are.

In a survey conducted by KPMG International in June, 35% of U.S. manufacturing executives said they expected to increase capital spending over the next year, while just 7% said they expected such spending to decline. In comparison, 27% of service company executives expected to increase spending, with about 9% expecting to spend less.

On Monday, Carrols Restaurant Group, which operates Burger King franchises and other restaurants in the U.S., said it expected to make capital expenditures of $40 million to $45 million this year, up from $37 million in 2009, but below 2008's $62 million. Most of that increase will be devoted to remodeling and equipment purchases at existing restaurants.

"We have limited capital spending for new-unit development this year so that we can continue to reduce debt," said company President Dan Accordino.

Ariens Co. of Brillion, Wisc., which employs about 1,000 workers making lawn mowers and snow blowers, has been buying capital equipment steadily over the past two years, taking advantage of the flood of inexpensive machinery that came on the market as other companies pulled back. Those purchases were aimed not at increasing Ariens' manufacturing capacity, but rather to bring in house work that it used to have outside suppliers perform.

Last year the company bought a pulley-making machine from a former General Motors Co. supplier for $1 million—a new one would have costs $4 million, said CEO Dan Ariens—and began making pulleys it used to buy. "It kept about 15 of our people busy," he said, helping the company avoid layoffs.

Mr. Ariens reckons he will keep buying equipment, but that he will be getting less bang for his buck in the year ahead than he has in the past year.

"I'm pretty confident that the cost of hardware and software is going to go up as the recession abates," he said.

Corrections & Amplifications

International PaperCorp. plans capital spending of about $800 million this year. This article incorrectly gave the figure as $800 billion.

Write to Justin Lahart at justin.lahart@wsj.com

 

Second annual study to be conducted by Deloitte and The Manufacturing Institute - Public View on Manufacturing: 2010 Annual Index

Last week at the NAM board meeting I sat in on the Manufacturing Institutes' board meeting. The Manufacturing Institute (MI) is the 501(c) 3 affiliate of the National Association of Manufacturers (NAM). As a non-partisan organization, the MI is committed to delivering leading-edge information and services to the nation's manufacturers. MI focuses on developing human capital strategies through education reform and workforce development, conducting applied research to provide critical information to public policy makers on challenges and opportunities for today's industry, and advancing the innovation capacity of manufacturers.

MI will be launching the findings of their second annual study to be conducted by Deloitte and The Manufacturing Institute, "Public View on Manufacturing: 2010 Annual Index" this September. The 2009 study revealed the majority of respondents (71 percent) view manufacturing as a national priority with 59 percent agreeing that the United States manufacturing industry effectively competes on a global scale. However, only 17 percent named manufacturing as among their top two industry choices to start a career, and only 30 percent of parents said they would encourage their children to pursue jobs in manufacturing, revealing a wide perception gap.

I hoping that one positive side effect of the recent economic problems of our country is that it has highlighted the need for a strong manufacturing base to our economy. Within my business I see customers moving toward JIT requirements - with a focus on short lead times and having suppliers close to their facilities. This bodes well for a growth in manufacturing opportunities back here in the USA. I also see this as a way to engage our kids again in the education process. We have to support learning opportunities for those kids that want to work their hands. Children that learn and think in a kinesthetic manner. We have to go back to a culture that honors those the create and make tangible things.