Precision Manufacturing Regional Alliance Project (PMRAP)

Transcription

1 Precision Manufacturing Regional Alliance Project (PMRAP) Workforce Development And Technology Adoption Report Findings and Recommendations

2 The Precision Manufacturing Regional Alliance Project (PMRAP) currently receives funding from the Massachusetts Executive Office of Housing and Economic Development (EOHED) and the Massachusetts Executive Office of Labor and Workforce Development (EOLWD). PMRAP s early stage capacity and partnership building work was funded by The Innovation Institute at the Massachusetts Technology Collaborative. Matching cash and in-kind contributions have been provided by the lead agency, the Regional Employment Board of Hampden County, Inc. (REB), and the Western Massachusetts Chapter of the National Tooling and Machining Association (WMNTMA). In-kind contributions have also been provided by other PMRAP project partners. On the Cover Cover photos courtesy of advanced manufacturing companies that are members of the Western Massachusetts Chapter of the National Tooling and Machining Association (WMNTMA).

3 Your Connection to Workforce Development Precision Manufacturing Regional Alliance Project (PMRAP) Workforce Development And Technology Adoption Report Findings and Recommendations May 2016

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5 Table of Contents Introduction Overview Executive Summary Section I- Market Segmentation and Business Trends 1 Section II- Workforce Needs 4 Section III- Manufacturing Operations 15 Section IV- Technology/Innovation Priorities 19 Section V- Education Initiatives 25 Appendix

6 INTRODUCTION Technology enabled advanced manufacturing is a critical industry sector in western Massachusetts. The advanced manufacturing companies are primarily small and medium sized enterprises (SMEs) that are part of a supply chain that is primarily engaged in producing precision mechanical parts, components, and subassemblies utilizing high technology equipment, lean manufacturing, and world class technology development. The broader regional advanced manufacturing sector is better characterized economically as part of the Knowledge Corridor -(Figure 1), a highly inter-dependent region that straddles the border between western Massachusetts and northern Connecticut. Figure 1- Knowledge Corridor New manufacturing process technologies, advanced materials, the demand for new and innovative products, and the growing need for manufacturers to utilize sustainable business practices require the adoption of new approaches to doing business and achieving operational excellence. In addition, in order to remain competitive, the sector must have a technologically relevant incumbent workforce, and develop a strategic workforce development plan that will implement training programs and delivery models that will ensure a sustainable pipeline of new qualified employees. The industry-led PMRAP partnership consisting of advanced manufacturing companies, educational institutions, and state and regional entities continues to take a leadership role in positioning the companies to remain competitive in advanced design and manufacturing. The availability of a well-educated and appropriately sized workforce is the companies competitive advantage in today s global economy. Currently however, the regional firms are experiencing a critical shortage of qualified employees along their employment continuum (Figure 2) and this reality is constraining their future growth and expansion. Figure 2 The companies need on-going support in identifying new technologies appropriate to their business, deciding what technologies and processes to adopt, optimizing their manufacturing processes, and in particular developing short-term interventions and solutions and long-term strategies to address to their workforce needs and requirements. The Findings and Recommendations in the Workforce Development and Technology Adoption Report will be used by the PMRAP partnership to continue to implement sustainable programs and actions that will strengthen the industry s competitiveness, create opportunities for market expansion, and accelerate the economic development of the Region and the State.

7 OVERVIEW The Precision Manufacturing Regional Alliance Project (PMRAP) is a strategic initiative of the Regional Employment Board of Hampden County, Inc. (REB), in collaboration with the broader regional advanced manufacturing industry led by the Western Massachusetts Chapter of the National Tooling and Machining Association. The Workforce Development and Technology Adoption Report presents data, findings and recommendations based on responses from forty (40) targeted advanced manufacturing companies in western Massachusetts (Appendix-1) that completed the Workforce Development and Technology Adoption Survey (Appendix-2). The Survey was sent to forty-seven (47) companies with a response rate of 85%. The Report is divided into the following five Sections: 1. Market Segmentation and Business Trends 2. Workforce Needs 3. Manufacturing Operations 4. Technology/ Innovation Priorities 5. Education Initiatives PMRAP used the following framework as a general guide to assess the current state of the broader regional advanced manufacturing sector. The Workforce Development and Technology Adoption Report provides a detailed analysis of the industry and its needs, challenges and opportunities. It offers a number of recommendations for addressing those needs and challenges which include: Securing an adequately skilled and trained workforce in the near-term. Adopting new software and innovative manufacturing processes and technologies that will accelerate business growth. Creating a pipeline of new workers to respond to future workforce needs. Increasing student, parent and educator awareness of careers in advanced manufacturing. The Workforce Development and Technology Adoption Report can be viewed on the web site of the Regional Employment Board of Hampden County Inc. at and on the web site of the Western Massachusetts Chapter of the National Tooling and Machining Association at

8 EXECUTIVE SUMMARY Advanced manufacturing is a critical industry and wealth creation driver in the Pioneer Valley Region of Massachusetts. The regional advanced manufacturing companies are primarily small and medium sized enterprises (SMEs) and are part of a supply chain engaged in producing precision mechanical parts, components, and sub-assemblies utilizing high technology equipment, lean manufacturing, and world class technology development. The companies are conducting business in multiple markets with Aerospace and Commercial being the two most active market segments for the regional companies. In order to remain competitive and maintain strong customer-supplier relationships, the sector must have a technologically relevant incumbent workforce and a sustainable pipeline of new qualified employees. The availability of a well-educated and appropriately sized workforce is the differentiator that gives the regional advanced manufacturing companies the competitive advantage they need to conduct business in in today s global economy. The highest priority need for both replacement and new pipeline production workers along the advanced manufacturing workforce pipeline continues to be for CNC Machinists and CNC Operators. Over the next three years, the forty companies responding to the survey report projected they will need 632 new production employees. The regional educational institutions will graduate an estimated 320 students during the same three year time period. The PMRAP partnership must develop a strategic workforce development plan that will implement training programs and creative program delivery models to respond to this critical demand-supply gap. The regional SMEs in particular need help in identifying new technologies appropriate to their business, optimizing their manufacturing processes, and in particular developing short-term interventions and solutions and long-term strategies that respond to their workforce needs. Innovation and new software technology adoption is critical to the SMEs ability to conduct business within their existing and new supply chains. A series of meetings between software companies and the regional sector companies should be conducted to examine the sector companies ERP/MRP and integrated CAD/CAM software needs, and identify resources and a mechanism that can provide guidance and support to the companies moving forward. The PMRAP partnership must work more closely with the region s educational institutions to provide supports and assistance to ensure that technical curriculum content is aligned with industry needs, that employability readiness skills are embedded into the curriculum, and that career awareness initiatives that educate parents on the viability of advanced manufacturing as a personally and financially rewarding career pathway for their student are accelerated. The Regional Employment Board of Hampden County, Inc., through the PMRAP partnership must continue to work with the regional sector companies to obtain appropriate federal, state, and private funding to conduct workforce training programs, develop and implement technology innovation initiatives, increase the capacity of the regional education institutions, and implement parent focused career awareness activities that will strengthen the industry s competitiveness, create opportunities for market expansion, and accelerate the economic development of the Region and the State.

9 N= 40 Companies Your Connection to Workforce Development Precision Manufacturing Regional Alliance Project (PMRAP) Workforce Development and Technology Adoption Report Section I- Market Segmentation and Business Trends 1. Please indicate the principal markets in which you conduct your manufacturing business. Markets Number of Market Ranking Markets Number of Market Ranking Responses Responses Defense Firearms Aerospace Power Generation Medical Device Automotive Commercial Oil/Gas Field Electronics Packaging Material Handling Software Development Market Segmentation 53% 70% 33% 60% 15% 10% 40% 38% 15% 15% 12% 1

10 Findings The regional advanced manufacturing companies are conducting business in multiple markets with Aerospace (70%) and Commercial (60%) being the two most active market segments for the regional companies. Aerospace continues to be the principal market for the regional company s book of business. The presence of 53% of the regional companies in Defense related markets is up slightly from 50% of the companies that indicated a presence in that market segmentation in The number of companies engaged in the Firearms market has leveled at 40% following a rapid increase to 42% in 2014 from 5% in This level of business remains connected to the sustained firearms production by OEMs at the local and national levels. The presence of thirteen companies (33%) in the Medical Device market is down slightly from the sixteen companies that (42%) indicated a presence in that market in The Power Generation market is attracting 38%, unchanged from 2014, of the regional companies business and continues to be an important market for selected regional manufacturers. Recommendations The PMRAP partnership must continue to collaborate with state agencies to develop a closer working relationship between the state s OEMs and the regions contract manufacturers. The PMRAP partnership must identify and leverage financial resources to encourage and support the participation of the smaller regional manufacturing companies at national and international trade shows/exhibitions. 2. Do you have a plan for growing or expanding your company over the next three (3) years? If so, please indicate ( ) if the growth plan involves any of the following actions: Findings Actions Number of Responses Introducing New Products Introducing or Integrating New Technologies Building Relocation/Expansion Achieving Greater Cost Efficiencies Accessing New Markets (OTHER) There was a significant increase (65%<42%) in the number of companies indicating that a critical part of their strategic plan going forward is implementing methods and processes to Achieve Greater Cost Efficiencies. 2

11 More than half of the companies (55%) indicated that they are focused on Introducing or Integrating New Technologies into their manufacturing operations. There was a significant increase in the number of regional companies (15<9) that indicated that their growth strategy moving forward includes Building Relocation/Expansion. This is significant, and may reflect the regional companies confidence in future business trends and economic activity. Recommendations The PMRAP partnership should continue to collaborate with the Massachusetts Office of Business Development (MOBD) and the Economic Development Council of Western Massachusetts (EDC) to develop opportunities for the companies, particularly SMEs, to engage in coordinated networking and matchmaking events that will position them to access business in new and emerging markets. The PMRAP partnership should continue to work with MOBD and the EDC to develop resources that will support SME s participation at national trade shows that will position them to access business in new market segments. The REB should contact the fifteen (15) companies that are considering building relocation/expansion and connect them with the MA Office of Business Development, and other appropriate state agencies, to assist them in their strategic planning and decision making. 3. If you are planning to purchase a new machine tool in 2016, please indicate your reason for considering this capital equipment investment. Please list Top Two Priorities: Findings Reason Priority Reason Priority Increase Machine/Equipment Capacity 1 New Machine to Reduce Costs 2 Machine/ Process Flexibility Tighter Quality Standards The company s responses to this new 2016 survey query indicated clearly that Increasing Machine/Equipment Capacity was their major reason for considering the purchase of a new machine tool in Reducing Production Costs was a close second priority for the companies, and indicates their continued need to control costs throughout the manufacturing cycle. 3

12 4. Please compare the general TRENDS that you are seeing in your manufacturing operations in January 2016 compared to January 2015 AND July 2015 Findings Indicator January 2016 Compared to January 2015 January 2016 Compared to July 2015 New Orders Growing 28 Contracting 7 Growing 22 Contracting 8 Production Growing 28 Contracting 6 Growing 15 Contracting 8 Backlog Growing 26 Contracting 6 Growing 16 Contracting 13 Material Prices Increasing 20 Decreasing 8 Increasing 16 Decreasing 7 Supplier Deliveries Lengthening 14 Shortening 15 Lengthening 10 Shortening 12 Future Business Expectations Improving 28 Declining 4 Improving 27 Declining 3 On a year to year basis, the regional companies manufacturing operation Indicators were Trending Positively with the exception of Supplier Deliveries. 52% of the companies responding to this query indicated their Supplier Deliveries Shortened during Shorter delivery times indicate that suppliers are not as busy and can more easily meet the demands of their customers. January 2016 manufacturing operations Indicators in comparison to July 2015 indicators seem to suggest a slight slowing of the positive trends indicated for 2015 as a whole. Supplier Deliveries remained essentially unchanged while Backlog appeared to be Contracting more broadly among the reporting companies, indicating falling capacity utilization. Future Business Expectations are positive and were the most consistent Indicator across the two time periods. Section II- Workforce Needs 5. Total number of employees in your company. Total number of production employees in your company. Findings There are 4,421 employees in the forty (40) advanced manufacturing companies that responded to the 2016 Workforce Development and Technology Adaption Survey. This is an increase of 256 employees from the 4,165 reported in 2014 from responses from 38 companies. Total Companies Employees 4,421 4,165 3,937 Change (%) % - 4

13 Smith &Wesson and Lenox account for 2,130 (48%) of the 4,421 total employees, down from 2,159 (52%) in 2014, factoring in responses from an adjusted total number of companies. There are 2,291 (52%) employees in the other 38 regional companies, almost all of whom are small and medium size (SME) companies. This employment level is significant, and indicates the continued importance of the advanced manufacturing sector to the economic vitality of the region. Of the 4,421 total employees, there are 2,936 Production Employees (66%) directly involved in the manufacturing process on the plant floor. This compares to a production employee level of 2,462 (59%) in 2014 and 2,420 (61%) in Smith &Wesson and Lenox employ 1,450 production employees representing 68% of their total employment-an increase of 5% from 2014 and 7% from 2012 The responding SMEs employ 1,486 production employees representing 65% of their total workforce-an increase of 10% from 2014 and 4% from ,421 Total Employees 2,130 2,291 Production Employees 2,936 1,450 1,486 % of Production Employees to All Employees 66% 68% 65% 5

14 6. Number of production employees who will be retiring in the next three (3) years whose positions will need to be replaced. Production Employees Retiring % of Production Employees Retiring 4.1% 6.2% 2.1% Findings A total of 122 Production Employees, whose positions will need to be replaced, will be retiring in the next three (3) yearsan average of 40 retirements a year. This is a reduction of 39 potential production employee retirements from the 2014 survey figure of 161. The 122 retirements represent 4.1% of the total production employees currently working in the 40 responding companies, and is a reduction from the 6.5% planned retirements from the 2014 survey. Smith &Wesson and Lenox anticipate that 30 production employees, 25% of the total projected retirements of 122, and 2.1% of their combined production employees, will be retiring within the next three years. This compares to 51 (3.7%) reported in the 2014 survey. There appears to be a gradual slowing of the number of projected retirements requiring replacements from these two companies. All Other Companies anticipate 92 production employees retiring, 75% of the total projected retirements over the next three years. This retirement figure represents 6.2% of their total production employees, a decrease from the 10% level in 2014, but an increase from the 3.9% reported in the 2012 survey. Recommendation Production employee retirements in the advanced manufacturing industry during the next three years, although appearing to slow from 2014, will continue to impact the companies, particularly the large legacy companies. The companies will need to utilize all available outreach and recruitment sources and strategies in order to identify the appropriate talent to replace these veteran craftspeople. 6

15 7. Number of new pipeline production employees you project hiring over the next three (3) years. New Production Hiring % of New Production Hiring 13.1% 21.5% 17.4% TOTAL Hiring- Replacement and New Production Employees Findings The regional companies reported that 510 New Production Employees will be needed through December 31, This projected hiring level represents 17.4% of the total current production employee level of 2,936. This is a slight decrease from the 522 new production employees (21.2%) reported in the 2014 survey. Smith & Wesson and Lenox project needing 190 new production employees, which is 13.1% of their current combined level of 1,450 production employees. This is a reduction from the 310 new production employees (22.7%) projected for hiring in the 2014 survey. This projected reduction will need to be carefully monitored in real time to gauge the implications on future workforce development planning. The small and medium sized companies forecast hiring 320 new production employees, which is 21.5% of their current level of 1,486 production employees. This is an increase of 108 new production employees from the 2014 level of

16 The percentage of total new production employee hiring needs to total production employees of Smith & Wesson and Lenox (15.2%) and the SME s (27.8%) suggests that the regions projected workforce needs continue to grow, particularly at the small and medium sized companies. Although the percentages are lower than the 2014 survey findings of 26.4% and 29.4% respectively, the workforce challenge going forward cuts across ALL the companies regardless of size and must be addressed with ALL the companies. The following chart summarizes the workforce Indicators: Indicators TOTAL Smith & Wesson & Lenox Other Manufacturers Total Employees 4,421 4,165 3,937 2,130 2,159 1,970 2,291 2,006 1,967 Production Employees 2,936 2,462 2,420 1,450 1,367 1,201 1,486 1,095 1,219 Production Retirement Replacements New Production Hires TOTAL Combining the projected 122 replacement production employee positions and the need for 510 new production employees creates a regional industry need for 632 new production employees over the next three years. This projected demand is slightly lower than the 683 projection in the 2014 survey, and slightly higher than the projected need for 621 new production employees reported in the 2012 survey. The Machine Tool Technology Program in the eight vocational technical/comprehensive/collaborative high schools in the region (209), and the Associate Degree and Certificate programs in the Mechanical Engineering Technology (121) program at Springfield Technical Community College, based on current enrollment and student retention data, will graduate 330 students during the same three year time period. Recommendations The PMRAP partnership must engage the WMNTMA Board of Directors and its member companies, other regional advanced manufacturing companies, education/training institutions, and other interested partners in the development of a long range strategic plan that addresses regional workforce development needs. The regional advanced manufacturing partnership must continue to identify new funding streams that will allow for infrastructure enhancements and capacity building initiatives that will scale existing programs to acceptable levels to ensure the implementation of any agreed upon long-range strategic workforce development intervention. 8

17 8. Based on your responses to No. 6 and 7, please identify which Job Classifications where you project hiring in the next three (3) years. Please list in Priority Order. Job Classifications Replacement NEW Priority Priority Machinist Tool Maker General Machine Operator CNC Machinist CNC Operator Process Engineer CNC Programmer QC Inspector CAD/CAM Technician Engineer Software Technician Other: Assemblers CNC Machinist CNC Operator Machinist Quality Control Inspector The highest priority need for both replacement and new pipeline production workers along the advanced manufacturing workforce pipeline continues to be for CNC Machinists. This need has not changed from the 2014 and 2012 surveys and indicates that identifying qualified applicants with the requisite skills to fill this job classification will continue to be a challenge. The need for CNC Operators remains a consistent and high priority both for replacement and particularly for new pipeline production workers. Identifying qualified applicants with the requisite skills to fill this job classification will require on-going collaborative efforts by the PMRAP partnership. The need for all purpose Machinists remains a consistent and high priority especially in the replacement category and is directly tied to the retirement of several senior level experienced machinists. Similar to CNC Machinists, identifying qualified applicants with the requisite skills and experience to fill this job classification will continue to be difficult. 9

18 Finding qualified Quality Control Inspectors remains a consistent need for the regional sector companies, and reflects the value-added work that SMEs in particular are being required to perform within their supply chain. Recommendations Companies must maintain a commitment to implementing comprehensive, continuous improvement programs for their incumbent workers at all levels along the employment continuum. The REB must accelerate efforts to identify flexible and sustainable funding to develop workforce development and training interventions, particularly the On-the-Job Training job creation model, which will prepare unemployed/underemployed individuals with the competencies required to fill critical, hard to fill positions. 9. Using the Wage Scale below, please indicate your average Hourly Wage Range for the following positions by entering the Wage Code next to each position for both experienced and new pipeline employees. Wage Code Hourly Wage Range A Under $13.00 B $13.01-$15.00 C $15.01-$20.00 D $20.01-$25.00 E $ Findings Job Category Experienced Wage Code NEW Pipeline Wage Code Machinist D D C C Tool Maker D D C C General Machine Operator C C B B CNC Machinist D D C C CNC Operator C C C C Process Engineer E E D D CNC Programmer E E D D QC Inspector D D C C CAD/CAM Technician E D D C Software Technician D E C B Engineer E E D D Experienced production employees working in the high demand job classifications referenced above were compensated in the $20.01-$25.00 per hour wage range. The 2016 hourly wage ranges in almost all Job Categories are unchanged from

19 New pipeline CNC Operators were compensated in the $15.01-$20.00 hourly wage range. This is in line with findings from the 2014 survey. The wages and fringe benefits in the regional advanced manufacturing industry are significantly higher than those found in other industries. The wage scale, together with the continuous improvement/training opportunities available to employees, should be attracting more individuals to the profession. 10. Please indicate which of the following employment benefits, practices, and programs do you offer to your full time employees. Findings Benefits, Practices, Programs Number of Responses Paid Medical Benefits Profit/Revenue Sharing Plan Bonus Plan Annual Review and Raise Program Formal Employee Training Program Education/Training Reimbursement Leadership Development K % of the companies responding offer Paid Medical Benefits to their employees, a significant increase from the 2014 data and consistent with findings from the 2012 survey. 92% of the companies have institutionalized an Annual Review and Raise program to reward and retain their incumbent workforce. Bonus Plans appear to be growing among the companies with 70% of the employers using this practice as a way to retain talent and incentivize their employees to continue to embrace and practice a company-wide culture of quality and operational excellence. The regional companies are committed to continuous improvement with 70% of the companies offering Education/Training Reimbursement for their incumbent workers. This is a significant increase from the 47% who indicated this employment benefit in 2014 and is consistent with the 69% who indicated this benefit in % of the companies have established some mix of company-specific Employee Training Programs to ensure that their employees have the technical competencies to respond to new technologies. The companies acknowledge that a companywide commitment to training and continuous improvement is one of the key differentiators that will sustain their growth trajectory in a changing and sometimes volatile business climate. 11

20 Profit/Revenue Sharing Plans is a consistent trend among several regional SMEs as a way to share company growth with their employees, and retain top talent. Leadership Development appears on a clear downward trajectory and this trend could have future long-term implications at the top management levels of the regional companies. 11. Please identify the factors/characteristics that you consider in hiring Production employees. Please list in Priority Order: 1= High- 5= Low. Findings Hiring Factors/Characteristics Experienced NEW Pipeline Priority Priority Technical Skills and Competencies Interest in Learning and Self-Improvement Attitude and Motivation Related Experience in Manufacturing Education/Training Beyond High School Associates Degree in Manufacturing Related Field Nationally Recognized Credential Work Shift Flexibility Experienced Production Employees Attitude and Motivation has emerged as the leading factor/characteristic that influences the hiring process, and is increasing in importance as companies aggressively compete for experienced applicants in today s marketplace. The regional companies continue to indicate that an applicant s current Technical Skills and competencies is the most significant factor in hiring experienced applicants for production positions. Interest in Learning and Self-Improvement has consistently emerged as a key characteristic that the regional employer s look for in selecting their replacement production workforce. Formal Post-High School Education, including attaining an Associate s Degree in a Manufacturing Related Field, and/or attaining a Nationally Recognized Credential, are still not major factors in the companies hiring considerations. However, innovation and new technology may cause employers to reassess these factors moving forward. 12

21 New Pipeline Attitude and Motivation and Interest in Learning and Self-Improvement continue to be the most significant factors in hiring new pipeline employees The Technical Skills and Competencies of new pipeline applicants is important, and indicates the continuing value of applicants who have been involved in industry-related manufacturing training programs, or who have some prior work experience in a general manufacturing setting. Formal post-high school education is not an essential actor in the hiring decision for new pipeline production employees. Going forward however, innovation and new technology may cause employers to reassess the factor of post-high school education in hiring new pipeline employees. Regional companies need to have a better understanding of the growing movement toward Nationally Recognized Credentials as an industry-wide direction. Survey findings continue to suggest that employers need more information on the significance and value of such a credential. 12. Which of the following competencies/attributes would you like New pipeline employees to possess? Please list Top 3 Competencies/Attributes in Priority Order. Competencies/Attributes Priority Basic Employability/Job Readiness Skills Mechanical Aptitude Hands-On Machining Skills Reading/Writing/ Verbal Communication Mathematics Skills Read and Interpret Blueprints Mechanical Aptitude, although at times difficult to ascertain during an interview, has surfaced in the 2016 survey as the key attribute that the companies would like new pipeline employees to possess. Basic Employability/Job Readiness Skills continues to be a significant attribute companies would like new pipeline employees to possess. Good attendance and punctuality patterns, the ability to self-start, accept constructive suggestions in a positive manner, and maintain a positive attitude are important traits that employers are looking for in new employees. Hands-On Machining Skills continues to remain as an important factor in the hiring process for new employees. Companies understand the need to provide technical support to new employees and are committed to providing new workers with opportunities for continuous improvement and skills enhancement. 13

22 Recommendations Basic Employability/Job Readiness Skills should be embedded into the curriculum in all manufacturing training programs at the vocational technical high schools and community colleges. Programs/courses in manufacturing technology must continue to emphasize basic skills development with a strong emphasis on hands-on computerized numerically controlled (CNC) instruction. The State approved Machine Tool Technology Framework must continue to guide technical instruction to ensure consistency in teaching the basic technical competencies; however instruction in new technologies aligned with industry standards and requirements must be incorporated within the existing Framework. 13. Please identify the sources that have been most successful for your company in the recruitment and hiring of both Experienced and New pipeline production employees. Please Prioritize the Top 3 Sources. Findings Source Experienced New Pipeline Priority Priority Private Employment or Recruiting Agencies Temporary Employment Agencies 3 Vocational High Schools/High Schools One Stop Career Centers Internet Community Colleges Newspaper Advertisements Career and Technology Fairs Employee Referrals Industry Networking Events The regional companies are using established recruitment sources to fill the majority of their vacant production positions. Employee Referrals continue to be the most successful source for recruiting and hiring of experienced employees, and has also been a successful recruitment source for identifying new pipeline applicants. The Internet continues to be a successful recruitment source for experienced applicants and has now emerged as a preferred recruitment source for new pipeline employees. Newspaper Advertisements continue to be a standard recruitment source for experienced applicants, but appear in the past two years to be a less than successful recruitment source for new pipeline applicants. 14

23 Companies that have developed working relationships with the Vocational Technical High Schools have been successful in using this resource to recruit new pipeline employees. Several survey companies serve as cooperative education sites for students and retain many of the students following graduation. The Region s One Stop Career Centers continue to be underutilized by the regional advanced manufacturing companies for recruiting experienced or new pipeline workers. Recommendations The REB should facilitate a meeting between the regional companies and the One Stop Career Centers to discuss ways to include the Centers as a more integral partner in the recruitment process. Regional companies must accelerate their involvement in Cooperative Education and Internship programs that have demonstrated value as a recruitment method for attracting new pipeline talent. Section III. Manufacturing Operations 14. Please indicate which of the following Improvement Methodologies you regularly use in your manufacturing operations. Findings Improvement Methodologies Number of Responses Continuous Improvement Program Quality Certifications (ISO etc.) Cellular Manufacturing S Workplace Organization Just-in-Time Material Flow Value Stream Mapping Kanban and Pull Systems The regional cluster companies are increasingly using a myriad of improvement methodologies in their manufacturing operations. 80% of the companies indicated that they have the appropriate Quality Certifications (ISO etc.), and have a Continuous Improvement Program in place at their company. In contrast with the 2014 survey finding, there was a significant increase in the number of companies using Just-in-Time Material Flow as an improvement methodology. The 2016 percentage is similar to the percentage response in the 2012 survey. 5S Workplace Organization (62%) continues to grow incrementally as a standard operating improvement method among the regional companies. 15

24 Value Stream Mapping is also increasing as an improvement methodology among the companies and its adoption has increased consistently in the past five years. 15. Please indicate which of the following Machining Strategies you regularly use in your manufacturing operations. Findings Machining Strategies Number of Responses Five Axis Machining (Full Contouring) High Speed Machining Unattended Machining Composite Machining 6 N/A Hard Turning Hard Milling Prototyping % of the companies use High Speed Machining in their production process, a significant increase from the 58% using this strategy in There was a significant increase in the number of companies using Unattended Machining as a manufacturing strategy. 58% 0f the companies reported using this strategy, up from 34% in Five Axis Machining (Full Contouring) continues as one of the machining strategies companies are using to increase their competitiveness and reduce production costs. The regional companies (55%) include Prototyping as both a service and a strategy in their relationship with their customers and believe that the service is an important strategy for generating new work moving forward. This trend appears to be increasing rapidly. 16. Please indicate which of the following Supply Chain practices are part of your manufacturing operations. Supply Chain Practices Number of Responses Collaboration Design with Customers (DFM) Just-In-Time Deliveries Access to Customers Forecasts Customer Satisfaction Surveys Certification of Major Suppliers None of These

25 Findings Customer Satisfaction Surveys continue to be a popular supply chain practice that is imbedded in the manufacturing operations of 72% of the regional companies. Certification of Major Supplier, although down slightly from 2014, continues to be a significant supply chain practice for (58%) of the companies and is widely used by both small and medium sized advanced manufacturing companies. Just-in-Time Deliveries remain a critical practice within the supply chain with 62% of the regional companies focused on this manufacturing practice. Collaboration Design with Customers (DFM) continues to increase (57%) among the SMES and is an encouraging sign of early-on collaboration and communication between customers and suppliers to ensure that the design and manufacturing processes are aligned. 17. Please indicate if your company has 3D part printing capability. Findings 3D Printing Number of Responses Used for Rapid Prototyping 7 3 Used for manufacturing/part production 2 2 Additive equipment is not presently being used in manufacturing operations 7 5 A limited number of survey responders indicated they have 3D Part Printing Capability. Regional companies indicating they have 3D part printing capability are using the technology primarily for rapid prototyping. 18. If you do not presently have 3D capability would your company make use of prototyping facilities, including 3D printing and other tools, if they were available in the region? 3D Capability Number of Responses YES NO 12 9 Total

26 Findings The number of companies indicating that they would make use of Prototyping Facilities, including 3D printing and other tools if they were available in the region, has surprisingly declined from the 2014 survey and may indicate continued uncertainty of the short-term value of the financial and time investment in this technology. The positive future usage response from 46% of the companies clearly indicates however, the need to continue to engage the companies in discussion moving forward. 19. Please identify the following emerging manufacturing technologies that might be relevant to your company or that you want to learn more about: Findings Interest in Emerging Manufacturing Yes No Need More Information Technologies Sensing, measurement and process control MT Connect New materials design, synthesis and processing Digital manufacturing technologies and Product Lifecycle Management (PLM) Sustainable manufacturing Metal additive manufacturing Industrial robotics Advanced forming and joining technologies Metal Additive Manufacturing continues to be an emerging technology that is of interest to the companies and one that the PMRAP partnership needs to discuss in greater detail with the regional manufacturers. Sensing, Measurement and Process Control continues to emerge as a technology that is relevant to the companies. 58% of the firms believe it is important for their manufacturing operations moving forward. An increasing number of companies (50%) indicated that Industrial Robotics is a technology that has become more relevant to their manufacturing operations and they are interested in learning more about its direct application to their respective manufacturing operations. 18

27 Section IV. Technology/Innovation Priorities 20. Please indicate the Operation Planning and Management software that is presently being used by your company. ERP/MRP Software Use Product Name 1. ERP/MRP integrated software package Sightline SAP Job Boss Global Shop Shop Mate Visual Syspro E-2 Epicor TCS M1 2. Job Shop Operation -planning and execution package Job Boss V-2 Vista Epicor No. of Companies Using Product Financial software adaptation Quickbooks Peachtree 4. Manual and general purpose software Excel Internally Developed/Proprietary System N/A 6. None of the above- Other (Please Specify) SQL Reporting 1 Year Updated (Total) < a. If you use an integrated ERP software package, please provide the following assessment: ERP Software Assessment Yes No Yes No Are you satisfied with the ERP software product you are using? Does the implementation and use of the S/W require new skills/training for employees? Is the investment in the ERP software (including the implementation) justifiable? Does this ERP software tool make your company more competitive?

28 Findings b. If you do not use an integrated ERP software package, please indicate your reason(s) for not using an integrated software package. General Purpose S/W and Manual Tools Use Assessment Yes No Yes No ERP software package is too expensive Do not have the training necessary for implementation of an ERP software package An ERP software package is not necessary for our operation Other reasons (please specify): 1 The companies are using multiple ERP/MRP Integrated Software packages as part of their manufacturing operations. Global Shop and Epicor were the software most referenced but there is clearly no one ERP/MRP Integrated Software package that is the standard among the regional SMEs. The SMEs are in a 50/50 ratio of those using an integrated software package versus those companies using compartmentalized software to manage specific areas of their business. The companies are using a wide variety of Job Shop Operation-Planning and Execution software packages as part of their manufacturing processes. Job Boss is the software most referenced, but there continues to be a notable absence in the number of responding companies indicating they are presently using any type of Job Shop Operation-Planning and Execution software. Quickbooks continues to be the preferred Financial Software Adaptation package in use at the companies. The companies appear to have a history and comfort level with Quickbooks and continue to use it as their preferred software. Excel continues to be the leading Manual and General Purpose Software being used by the regional companies, particularly the SMEs. A significant number of regional companies (63%) believe the investment in their respective ERP software (including the implementation) is justifiable, however 34% of the companies indicated that their chosen ERP software tool was not making their company more competitive-a significant increase from the 2014 survey. The companies are generally satisfied with the ERP software products they are using; however an increasing number of companies indicated various levels of dissatisfaction with their present product. 20

29 Recommendations The PMRAP partnership should facilitate a series of meetings between ERP software companies and the regional SMEs to examine emerging software technologies that can increase their competitiveness. The PMRAP partnership must develop a plan and implement a mechanism to assist the regional SMEs to access software along with training or customized solutions that will increase their competitiveness and position them for business growth. 21. If ERP/MRP integrated software were available to your company on an affordable basis, would you make use of it to expand your manufacturing operations? Finding ERP/MRP Capability Number of Responses YES 12 8 NO 4 5 Total If YES, please indicate which ERP/MRP integrated software you would like to have access to. 1. No Responses 2. No Responses The regional companies, particularly the SMEs, indicated an interest in making use of ERP/MRP integrated software to expand their manufacturing operations if it was available to them on an affordable basis; however the response was not strong with only a slight increase from the data reported in the 2014 survey. Recommendation The PMRAP partnership should work with ERP/MRP software companies to establish a discount incentive program for advanced manufacturing companies, particularly SMEs that become new adopters of ERP/MRP software packages. 21

30 22. Please indicate the CAD/CAM and simulation software that is presently being used by your company. CAD/CAM/Simulation Software Use Product Name 1. Integrated CAD/CAM package NX Solidworks Mastercam Cimatron Part Maker Esprit Camworks UG Catia 2. Product Lifecycle Management (PLM) (integrated with customers) 3. 3D CAD vendor supported system Solidworks Master Cam UG Catia 4. 3D CAD free system Draftsight MasterCam X CAD Not 3-D 5. Modeling, simulation/verification software Vericut Solidworks MasterCam X NX 9 Cimco 6. Programmable Automation Software No Response No. of Companies Using Product Master Cam X Year Updated (Total) < a. If you use an integrated CAD/CAM or PLM software package, please provide the following assessment: CAD/CAM or PLM Software Use Assessment Yes No Yes No Implemented CAD/CAM or PLM to satisfy customer requirements Are you satisfied with the product you are using? Does your software vendor provide appropriate and effective support? Does the implementation and use of software require new skills/training for employees? Is the investment (including the implementation) justifiable? Do you believe that this tool makes your company more competitive?

31 b. If you do not use an integrated CAD/CAM and PLM software package, please provide the following assessment: General Purpose Software and Manual Tools Use Assessment Yes No Yes No Have not purchased integrated CAD/CAM package because it is not necessary for our manufacturing operation Have not purchased integrated CAD/CAM package because it is too expensive 3 2 Have not purchased integrated CAD/CAM package because we do not have the training necessary for 2 2 implementation Have not purchased integrated CAD/CAM package because it is not applicable to our manufacturing operation Have not purchased integrated CAD/CAM package for other reasons (Please Specify): Findings Mastercam is clearly the preferred Integrated CAD/CAM and Simulation Software that companies are using in their manufacturing operations. There continues to be a very limited use of Product Lifecycle Management (PLM) being used by the companies, and the limited responses may indicate a lack of awareness of this technology. The regional companies indicated that Solidworks is the 3D CAD Vendor Supported System they use and its users have increase incrementally form The regional firms indicated that Vericut is the leading Modeling, Simulation/Verification Software being used in their manufacturing operations. The 2016 survey findings are almost identical to the 2014 results and indicated that the companies are satisfied with their CAD/CAM or PLM Software and believe that the products they are using are making their company more competitive. The regional SMEs are pleased with the support they receive from their software vendors and believe that their investment in their respective CAD/CAM or PLM Software is justifiable. Recommendations The PMRAP partnership team should continue to conduct regional Innovation Information Forums similar to the Forums conducted in December 2014 to share current practices, examine the company s future software needs, and identify resources that can provide guidance and support to the companies moving forward. Integrated CAD/CAM and Simulation Software are increasing in importance to the regions SME s and is an area where companies need support and technical assistance. 23

32 23. If CAD/CAM and PLM software were available to your company on an affordable basis, would you make use of it to expand your manufacturing operations? Finding CAD/CAM PLM Software Number of Responses YES 8 13 NO 3 2 Total The regional companies, particularly the SMEs, indicated an interest in making use of CAD/CAM and PLM software to expand their manufacturing operations if it was available to them on an affordable basis, however the response was not strong and a decrease from the level of interest expressed in the 2014 survey. This response is similar to the company s response to making use of available and affordable ERP/MRP integrated software. 24. If a business opportunity arose with a new customer with new CAD/CAM software, would you be willing to pay for customized technical assistance to learn and use the new software? Finding CAD/CAM Software Number of Responses YES NO 4 1 Total The regional companies, particularly the SMEs, appear to be very willing to pay for customized technical assistance to learn new CAD/CAM software if it is directly related to a pending business opportunity with a new customer. Short-term value added opportunities have a significant impact on the decision making process Recommendations The SMEs responses continue to make a business case for investing time/resources in helping regional companies access affordable software. A practical, timely, and sustainable plan needs to be developed by the regional partnership to respond to the regional company s willingness to pay for customized technical assistance to learn and use new CAD/CAM software in response to a business opportunity with a new customer. 24