Industry Market Trends
Manufacturing: The Difference Maker Pt. 1
April 3, 2013
In the first of a multi-part series, Doug Woods, president of the Association for Manufacturing Technology, discusses key government initiatives that would support and bolster American manufacturing - if executed correctly. Keeping Focus on Manufacturing's Goals With so much fighting in Washington over budgets, social issues, the economy, and just about anything else that comes along, it's good to see at least one thing that gets bipartisan support: the need to build a better U.S. manufacturing sector. For the past four years in my role as president of The Association for Manufacturing Technology (AMT), I've spoken in front of audiences both domestically and abroad about the need for a clear, defined direction for U.S. manufacturing - a collaboration between industry, government, and academia. This is the premise of the Manufacturing Mandate, AMT's plan to revitalize U.S. manufacturing through a coordinated policy structure. One of the chief policy recommendations behind the mandate is a call for increased support of strong R&D investment and rapid innovation, from conception to marketplace. Several manufacturing initiatives announced by President Barack Obama's administration and currently under consideration in Congress have potential, but proper execution is critical. In his State of the Union address, Obama announced additional support for his advanced manufacturing innovation initiative, proposing a one-time $1 billion investment to create the National Network for Manufacturing Innovation (NNMI), a series of up to 15 manufacturing innovation institutes across the country. He announced the 2013 launch of three such manufacturing hubs using existing funds - in addition to the pilot institute in Youngstown, Ohio, the National Additive Manufacturing Innovation Institute (NAMII). This type of initiative is consistent with the Manufacturing Mandate's call to action on boosting innovation, and AMT is proud to be involved with the launch and development of NAMII. However, the scale proposed by the Obama administration may be overly ambitious, especially since we are just now getting NAMII off the ground. In addition, Obama announced plans to strengthen the Manufacturing Extension Partnership's (MEP) services to small manufacturers. These plans include a $25 million 2014 fiscal-year budget increase to launch Manufacturing Technology Acceleration Centers (MTACs), which are industry-specific centers that will each act as a coordination point within key supply chains. A pilot of two of these centers is planned to come online in 2013 using current funds. The AMT Manufacturing Mandate calls for the use of existing infrastructure, such as the MEP network, to bolster efforts to support small and medium-sized manufacturers while also doing it as efficiently as possible. Recognizing, though, that not all of these centers are created equal, and not all of the needed services are available at all sites, we at AMT like the idea of a "turbocharged MEP," and I am quite interested to hear more about the administration's intention with these pilot MTACs. Meanwhile, the president has a budget proposal to provide $113 million in assistance to manufacturing communities to improve their ability to attract investment. Again, our Manufacturing Mandate "heat map" (see above) shows manufacturing-centric areas across the U.S. that would be ideal for this type of effort. The key is tying these initiatives together into one strategy for boosting manufacturing. As these initiatives are launched and legislated, a major concern is that we risk losing the necessary coordination and focus to effectively advance the manufacturing sector. It's important that with such a large investment of resources, we must ensure that these programs are meeting their goals and bringing substantial returns to both their local communities and the broader sector. Also, the current fiscal climate creates a need for spending restraint, particularly until we can get our nation's deficit under control. While we support the concept of the NNMI, the initial investment of $1 billion for 15 centers is too much, too soon. A more prudent approach would be to start with around five of these centers in addition to NAMII, allowing for proper management and development before potentially biting off more than we can chew - and leaving a bad taste in taxpayers' mouths. It's also important to ensure that small and medium-sized manufacturers get a seat at the table. Certainly, the investment and commitment shown by large manufacturing companies is absolutely necessary for these initiatives to work, and those companies are acting as a great example for the rest of the sector. But some of the most innovative technologies available in the marketplace have come from smaller companies, and we must ensure that they have the resources and support available to remain competitive. AMT is continuing to work closely with those who are crafting the NNMI framework and has specific recommendations for the best way to move forward. We will support and guide the development and implementation of manufacturing initiatives that are consistent with our Manufacturing Mandate's principles. It is mandatory that the U.S. have a strong manufacturing sector in order to build a strong economy and create jobs. We must work together to achieve that goal. Doug Woods is president of AMT - The Association For Manufacturing Technology. Based in McLean, Va., AMT represents and promotes U.S.-based manufacturing technology and its members - those who design, build, sell, and service the continuously evolving technology that lies at the heart of manufacturing. For more, visit AMT's website at www.amtonline.org.