How Can Canada .. Take Back Manufacturing Or how to reverse 30 - PDF document

12/6/2015 TBM Take Back Manufacturing WWW.SME-TBM.ORG How Can Canada….. Take Back Manufacturing The Canadian economy is in reset mode with the world-wide price drop in oil and declining international demand devastating the export orientated resource sectors. This has forced a related correction in the previously resource escalated Canadian dollar back to and maybe even below reasonable price parity. We are also experiencing instability in our saturated service and retail sectors. This duress has promoted some political attention back to the long term hollowed out manufacturing sectors as a possible area of growth and support for a now fragile Canadian economy. Many in manufacturing are perplexed that anyone can truly believe that a manufacturing sector that has been under-funded by indifferent policies and out-priced with an over inflated exchange rate for decades can just bounce back and do much to assist in the very short term. In this presentation we review the history and reasons for the decline of our industries, and how our manufacturing sector leadership, our technical professionals, the general public, and our political leaders can respond to these new economic conditions, and what success factors will be necessary to Take Back Manufacturing. TBM Take Back Manufacturing WWW.SME-TBM.ORG How Can Canada ….. Take Back Manufacturing Or how to reverse 30 years of poor global management Nigel Southway TBM Advocate & Past Chair Society Manufacturing Engineers 1

12/6/2015 NIGEL SOUTHWAY Owner of NEXUS CONSULTING SERVICE • 40+ years Broad Business and Manufacturing Experience • British Engineering Apprentice …Aerospace/Electronics (1966) • BSc EEE C- Eng. in Engineering/MSc Management…. (Bristol) • Manufacturing Engineer (1972) • MOTOROLA Director Manufacturing Eng / Lean and Six Sigma Implementation 1980,s (1992) • Engineer / Manager / Director / VP Operations / General Manager • Consultant/Change Agent/Educator/Coach for LEAN business improvement • AUTHOR : CYCLE TIME MANAGEMENT … Fast Track to Productivity Improvement • Consulted many organizations in different industry sectors in many countries. • Assisting many Global Sourcing programs and Joint Ventures (2004 Onward) • Society of Manufacturing Engineers …2012/2013 Chair Toronto Chapter • Advocate for the Take Back Manufacturing and Reshoring Forum NEXUS • Sheridan lecturer on Advanced Manufacturing and Sustainable Supply Chains www.nigelsouthway INDUSTRY WEEK 2

12/6/2015 TBM Take Back Manufacturing WWW.SME-TBM.ORG Take Back Manufacturing TBM Since Mid 2011 www.SME-TBM.org A Forum Dedicated to Restoring our Manufacturing Sectors. TBM Take Back Manufacturing WWW.SME-TBM.ORG Take Back Manufacturing TBM 25 Technical Associations 3 Trade associations 5 Educational policy makers 7 Media experts 3 Local government reps 5 Industry experts A Forum Dedicated to Restoring our Manufacturing Sectors. www.SME-TBM.org 3

12/6/2015 TBM M 8 Presentations.... TAKE BACK MANUFACTURING Raising the Awareness CMTS Toronto Canada October 2011 SME Annual Conference Cleveland USA June 2012 TBM Many Society and Association events in 2012/13 M 4

12/6/2015 http://www.canadianmanufacturing.com/fabrication/production/taking-back-manufacturing-51066 Professional Engineers Ontario http://sme-tbm.org/app/download/5809147904/PEO+TBM+article.pdf 5

12/6/2015 12 BNN BUSINESS NEWS NETWORK What can Canada learn from German Manufacturing? 13 6

12/6/2015 TBM Take Back Manufacturing WWW.SME-TBM.ORG TBM …Our Ultimate Goal Government, Education organizations Work together …. Industry leaders ROADMAP……..Recover our future industrial capability …… and therefore our future prosperity. 14 TBM Take Back Manufacturing WWW.SME-TBM.ORG TBM …Our Ultimate Goal SORRY! We ask for an open mind as we deliver this important message and perspective. Honest and Factual Provocative concepts Perhaps test and conflict with your current beliefs Mind bending, Scary, Frustrating, Inspiring. 15 7

12/6/2015 TBM Take Back Manufacturing WWW.SME-TBM.ORG WHY? ..Take Back Manufacturing FOR OUR KIDS!! 16 This is NOT a game!!!... Our Kids will Believe we don't make things!!! ? ? ? ? 17 8

12/6/2015 GLOBALIZED ? ? MANUFACTURING We Question its future Sustainability Moved Off- shore….. For low cost labor rates Un- controlled trade….. “herd behavior” 15% Reduction in Manufacturing Intensity in the last decade Foods Fittings Equipment metalwork Appliances AUTO PARTS Electronics Furniture Plastic goods Footwear Textiles TBM 19 9

12/6/2015 CANADA TBM More than 500,000 jobs lost in 6 year period (300,000 Ontario) 25% Reduction (Quantity and Quality) Lost 10,500 Plants in Ontario Lost 50% MFG SME’s in Ontario 10% Productivity Loss due to reduced Capacity utilization 2009 2010 2011 Source: Statistics Canada 1,000,000 Young Canadians Redeployed to part time Now un or under employed!! and lower paying service jobs Due to this….we have a skill shortage!!! (NOT a labor shortage) 20 What happened? 21 10

12/6/2015 USA OUR BIG BROTHER - 1% GDP (US GDP 2010=14000B) 22 OUR BIG BROTHER USA -1% GDP Adopted Free Market Ideology… Chased Emerging Markets Deregulated National Economic Controls Used liberalized Trade approach Allowed free flow of capital Removed trade barriers and controls Encouraged Out of Balance Trade. Assumed More Service Sector Jobs???? Assumed local exports would grow/balance (US GDP 2010=14000B) 23 11

12/6/2015 USA -1% GDP Globalized Trade - 4% GDP Cumulative Trade Deficit is now 50% GDP 24 (US GDP 2010=14000B) USA -1% GDP HUGE ONGOING TRADE IMBALANCE Some experts call this “Wealth dilution” - 4% GDP Cumulative Trade Deficit is now 50% 2010 GDP Significant government deficit and foreign borrowing High Unemployment / Growing wealth inequality / Prosperity decline Loss of National Sovereignty and balance between Capital and Labor (US GDP 2010=14000B) 25 12

12/6/2015 Global Trade Balance Imbalance Wealth transfer gradient 26 Globalized Trade has outpaced Wealth Creation Significant failure to correctly Wealth manage trade balance Dilution Winners Losers Emerging Economies Mature Economies Bankers National governments Traders Mature Economy Middle class Global Corporations Citizen level investors Global Capitalists Youth early in careers 27 The planet! 13

12/6/2015 How did it happen? Share holders Corporate “brow - beating” “If you don’t Go Offshore you wont be on the bidders list!” (Fortune 500 Corporations to local NA Suppliers) 50% of the mid – sized manufacturers (100 to 500 employees ) have disappeared since 2000 Corp Productivity + cash stash Economic Doctrine Trade Cheap Moving toward Unions Wealth Inequality? Goods Middle ???? Class Global Change is taking place at an Exponential Rate!! Globalization is Enabling Change (Positively and Negatively)… Age of Disruption Ecological Sustainability Issues Age of Over-Supply Religious/Ethnic pressures Higher Expectations to share wealth Cultural Mobility National boundaries (Much Migration) Technology ( Supply Chains) Market and Commerce (unbalanced) Economics (unplanned) Politics 29 14

12/6/2015 3 times Increase in 6 decades 30 The Global Workforce 6B 300% People Added 3 Billion to the workforce Increase Capacity “Over - Supply” 4B Demand Productivity via Technology For Labor In all forms + Unequal Consumer/Output balance 2B [25% un or under employed] 1950 1960 1970 1980 1990 2000 2010 2015 2020 + UN UNDER UNDER 3 8 4 13 7 15 9 19 % % 10 20 11 21 12 22 Global un and under Employment 13 23 31 15

12/6/2015 -1% GDP CANADA (GDP=1350B) -2% GDP Canada/World -10% GDP Worse than USA numbers!!! 32 Emerging Market Resource Demand Dependent -1% GDP CANADA Prosperity INDEX Declining We have lost our BALANCE to remain Productive. It is not that we are less productive.. but more about having idle capacity! 33 16

12/6/2015 TBM Take Back Manufacturing WWW.SME-TBM.ORG OUR ECONOMY NEEDS MANUFACTURING! It is VERY obvious that we need a Balanced Economy (Resources/Services/Manufacturing) 34 So what’s next? We need a critical mass of awareness by every-one to force action taking to recover our future…… THE GAME CHANGERS! 35 17

12/6/2015 Global Change is taking place at an Exponential Rate!! Globalization is Enabling Change (Positively and Negatively)… Age of Disruption Ecological Sustainability Issues Age of Over-Supply Religious/Ethnic pressures Higher Expectations to share wealth Cultural Mobility National boundaries (Much Migration) Technology ( Supply Chains) Market and Commerce (unbalanced) Economics (unplanned) Politics 36 37 18

12/6/2015 Global Warming ???? Climate Change ???? 38 Air Pollution 39 19