THE RESURGENCE OF MANUFACTURING

THE RESURGENCE OF MANUFACTURING:

FOUR TRENDS YOU SHOULD NOT IGNORE

PETRA MITCHELLPRESIDENT AND CEO

CATALYST CONNECTION1

AGENDA• Overview of the Manufacturing Economy• The Role of the MEP Program• A Local Perspective: SW Pennsylvania• Trends in US Manufacturing

– US Shale Gas and Low Cost of Energy – Innovation Management– Additive Manufacturing– Social Media for Business

– Wrap Up: National Academies of Science, Recommendations for a US Manufacturing Policy

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WHY DOES MANUFACTURING MATTER?

EMPLOYMENT

INNOVATION

NATIONAL SECURITY

Source: National Association of Manufacturers, 2009

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Source(s): International Monetary Fund and U.S. Bureau of Economic Analysis and MAPI, www.nam.org

THE U.S. MANUFACTURING SECTOR IS THE TENTH-LARGEST ECONOMY

U.S

. M

AN

UFA

CTU

RIN

G

4

CHEMICALS LEAD MANUFACTURING IN TERMS OF OUTPUT BUT NOT EMPLOYMENT

5

Source(s): MAPI calculations from U.S. Bureau of Economic Analysis data, www.nam.org

Indu

stry

Per

cent

of M

anuf

actu

ring,

201

1

PRODUCTIVITY SHOWS OUR STRENGTHS

Source(s): U.S. Bureau of Economic Analysis and MAPI, www.nam.org

6

0

20000

40000

60000

80000

100000

120000

0-4 5-9 10-19 20-99100-499 500+

Total Number of Firms: 290,704

Source(s): U.S. Census Bureau and MAPI, www.nam.org

SMALL COMPANIES DRIVE GROWTH

Number of Manufacturing Firms in 2010

Number of Employees per Firm

7

8

THE MANUFACTURING EXTENSION PARTNERSHIP:A CRITICAL RESOURCE FOR MANUFACTURERS

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MEP IS SIMILAR TO THESE

COUNTRIES’INVESTMENTS

Source: “21st Century manufacturing Challenge: The Role of the MEP Program”, The National Academies of Science, 2013 © Charles W. Wessner Ph.D.

TAIWAN: ITRI PROGRAM

GERMANY: FRAUNHOFER

INSTITUTECANADA: IRAP

GREAT BRITAIN:CATAPULT

FRANCE: CARNOT

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We help manufacturers competein a global economy.

OUR MISSION:

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LET’S TALK ABOUT LOCAL LANDSCAPE

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96,000

MANUFACTURING INSOUTHWESTERN PENNSYLVANIA

3,000MANUFACTURING

EMPLOYEES

$12.6BILLIONMANUFACTURERSIN OUTPUT

(11% OF TOTAL)

13

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Fina

ncia

l Act

iviti

es

Gov

ernm

ent

Ret

ail T

rade

Con

stru

ctio

n

Oth

er S

ervi

ces

$'s

B

2010

MANUFACTURING IS OURTHIRD LARGEST INDUSTRY

MA

NU

FAC

TUR

ING

NAT

UR

AL

RES

OU

RC

ES

& M

ININ

G

14

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

Pittsburgh MSA Pennsylvania US

GD

P ($

MIL

)/EM

PLO

YEE

2002200720102011

PRODUCTIVITY

+ 8.5%

+ 1.5%

+ 4.2%

15

EMPLOYMENT BY SECTOR

0

50000

100000

150000

200000

250000

300000

Edu

catio

n an

dH

ealth

Ser

vice

s

Pro

fess

iona

l and

Bus

ines

s S

ervi

ces

Con

stru

ctio

n

Info

rmat

ion

20082009201020112012

MA

NU

FAC

TUR

ING

NU

MB

ER O

F EM

PLO

YEES

+ 0.5% FROM 2011

‐ 9.3% SINCE 2008

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FOUR TRENDS YOU SHOULD NOT IGNORE

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TRENDS IN MANUFACTURING

US SHALE GAS AND LOW COST OF ENERGY

INNOVATION MANAGEMENT

ADDITIVE MANUFACTURING

SOCIAL MEDIA FOR BUSINESS

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U.S. SHALE GAS AND SHALE OIL PLAYS

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MARCELLUS PLAY

MARCELLUS PLAY COVERS 95,000 SQUARE MILES

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WWW.MYMANUFACTURINGCONNECTION.ORG 21

WHERE ARE THE OPPORTUNITIES?

SUPPLY CHAIN21

PRODUCTION

EXAMPLE SUPPLY CHAIN OPPORTUNITIES

Source: www.eqt.com

EXPLORATION PRODUCTION

Geosciences (site)

Land Acquisition

Testing

Construction & Reclamation

Engineering Services

Hot Shot

Permitting

Trucking / Heavy Hauling

Water Hauling

Welding

Well Tie-in

GATHERING & TRANSMISSION

MIDSTREAM

Pipeline Construction

Compressor Station Construction

Clearing Services

ROW Maintenance

Pipe, Valves, Fittings

Measurement & Regulation

Environmental,Health & Safety

DISTRIBUTION

Infrastructure Repair

Billing/Collections

Pipe, Valves, Fittings

Meter Reading

Printing

Many otherservices & products

DOWNSTREAMUPSTREAM

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ECONOMIC IMPACT EFFECTS

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WHAT IS “INNOVATION”?“Introducing New Products / Solutions that create new or unique value to your customers and your company.”

Robert B. TuckerDriving Growth Through Innovation:

How Leading Firms Are Transforming Their Futures

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25

BEST-IN-CLASS COMPANIES

Sources: 1) PDMA, 2004 NPD, Comparative Performance Assessment; 2) R. G. Cooper, Product Leadership

NPD revenues range from

of total revenues and also generate a significant

portion of profit

of projects meet profit objectives

are considered commercial

successes & are launched on-time

80% 2/3 20-50%

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WHAT IS THE VALLEY OF

DEATH?

MARKET-READYTECHNOLOGY

EARLY STAGETECHNOLOGY

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A DOSE OF REALITY:CAUSES FOR NEW PRODUCT FAILURE

PERCENTAGE OF CAUSES CITING

R. G. Cooper, Winning at New Products, pp 385 ‐386 / Markides, Constantinos. 2000. All the Right Moves, Harvard Business School Press27

PLAN SELECT DESIGN COMMERCIALIZE

PLANFOR PRODUCT DEVELOPMENT

SUCCESS

SELECTTHE BEST IDEAS

DESIGNPROTOTYPE AND

TEST QUICKLY AND EFFECTIVELY –


COMMERCIALIZEWITH STRATEGIC

SALES AND MARKETINGBEST PRACTICES –

SOCIAL MEDIA

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Source: ExOne Presentation to PEDA Conference, Oct 2013

ADDITIVE MANUFACTURING OR 3D PRINTING

The process of making solid objects of any shape from a digital model by layering material together.

Some processes require bondingagents, laser, or post process.

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AM AND INNOVATION MANAGEMENT

• Functional parts• Prototypes for fit and assembly• Patterns for prototype tooling• Patterns for metal castings• Visual aids (for engineers, designers…)• Presentation models• Education/Research• Tooling components

(Created directly on AM systems)• Other

Most Common uses of Parts Built on AM Systems:

Source: Wohlers Report 2013: Additive Manufacturing and 3D Printing, Worldwide Progress Report, Wohlers Associates30

Community (Membership)Resources (Facility, equipment and training)Projects (Competitive, University led)Source: https://americamakes.us/

US INVESTMENT IN ADDITIVE MANUFACTURING

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LINKEDINLINKEDINTWITTERTWITTER

FACEBOOKFACEBOOKYOUTUBEYOUTUBEGOOGLE+GOOGLE+

SOCIAL MEDIA – THE BIG 5

MY MANUFACTURING CONNECTIONMY MANUFACTURING CONNECTION

OUR REGIONAL MANUFACTURING COLLABORATION SITE

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SOCIAL MEDIA USAGE

Source: Pew Research Center’s Internet & American Life Project surveys: 02/05, 09/06, 05/08, 04/09, 05/10, 05/11, 02/12.

SOCIAL NETWORKING SITE USE BY AGE GROUP 2005-2012

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Manufacturers in general have been slower to fully adopt social media but things are changing rapidly…

Kennametal is a $3B maker of tooling for mining, construction, aerospace, defense and other industries located in Latrobe, PA

IS THE INDUSTRY USING SOCIAL MEDIA?In 2012, Kennametal announced that they will be using Twitter, LinkedIn, Facebook, YouTubeand Google+ to:

• Answer questions / customer service

• Recruit the best talent• Make it easy to find info on their products and services

• Interact with their suppliers and dealers• Announce upgrades to their products & process improvements

• Promote events like Manufacturing Summit

• Direct traffic to their blog and web site

• @Kennametal on Twitter

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WRAP – UPNATIONAL PERSPECTIVE ON

MANUFACTURING STRATEGIES

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• Capitalize on lower energy costs

• Develop a better understanding of the importance manufacturing and the need for facilitating institutions.

• Make the US more competitive for manufacturing by lowering tax rates and modernizing infrastructure.


NEW (RECOMMENDED) US MANUFACTURING STRATEGIES

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• Spur innovation on next generation technologies though support for manufacturing institutes, investments in manufacturing R&D

• Strengthen workforce skills and regional clusters

• Improve market access with trade agreements


NEW (RECOMMENDED) US MANUFACTURING STRATEGIES

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THANK YOU!

PETRA MITCHELLPresident and CEOCatalyst Connection

412‐918‐4265E‐mail: [email protected]

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THE RESURGENCE OF MANUFACTURING