6/7/2014 Toronto Chapter Society of Manufacturing Engineers SME Toronto WWW.SMETORONTO.CA Nigel Southway SME Chapter Secretary/Past Chair 2012/2013 Advocate for the Take Back Manufacturing Initiative Toronto Chapter www.sme.org. About SME: The Society of Manufacturing Engineers Premier source for manufacturing knowledge, education and networking. Connecting manufacturing practitioners together. Provide Tradeshow , Expo and network events. Reviews latest manufacturing technologies/processes/techniques/practices. SME world-wide supported network of Chapters and technical communities. Many programs, events, magazines, publications, huge technical database and online training …. SME leader in manufacturing workforce Education/training/skill development. SME is a LEAN Business Certification Authority. $125 per Year WWW.SMETORONTO.CA 1
6/7/2014 TBM Take Back Manufacturing WWW.SME-TBM.ORG Take Back Manufacturing TBM www.SME-TBM.org A Forum Dedicated to Restoring our Manufacturing Sectors. A HUGE CHALLENGE!!! TBM Take Back Manufacturing WWW.SME-TBM.ORG Vision of the reality The Global Outlook The Future Challenge 2
6/7/2014 Manufacturing and Engineering has been a good career for a lot of us!! It’s been good to me! NIGEL SOUTHWAY www.nigelsouthway • 40 years Broad Business and Manufacturing Experience • British Engineering Apprentice …Aerospace/Electronics (1966) • BSc EEE C- Eng. in Engineering/MSc Management…. • Manufacturing Engineer (1972) British Aerospace/SPAR • MOTOROLA Director Manufacturing Eng / Lean and Six Sigma Implementation (1980,s) (1992) • Engineer / Manager / Director / VP Operations • Change Agent/Educator/Coach/Advisor for LEAN/Six Sigma • AUTHOR : CYCLE TIME MANAGEMENT … Fast Track to Productivity Improvement • Consulted / Directed many organizations in different industry sectors. LEAN THINKING Automotive, Aerospace, Avionics, High-tech and consumer Electronics, Pharmaceuticals, Food, Beverage. Consumer Products and Appliances, Steel, Fabrication, Mining, Resource extraction equipment, Construction, Off-road equipment, Service and Financial Industries. • Assisted many Global Sourcing programs and Joint Ventures (2004 Onward) • Society Manufacturing Engineers …Chair 2012/13 Toronto 3
6/7/2014 Supported Clients World Wide on LEAN THINKING & Productivity Improvement. • Electronic assembly • Bubblegum and candy factory • Meat processing plant.. • Food additive producer • Metal fabrications • Data-com system provider • HVAC Manufacturing • Computer software developer • Toothpaste manufacturing • Mint (Coins and Medals) • Steel mill processes • Security equipment • Bank check clearing house • Off-road equipment • US army medical Corp • Water pipeline manufacturer • Whiskey distilling • Exhaust System Manufacturing • Dry-cell battery production • Commercial swimming pool manufacturing • Credit card emboss house • Auto dealerships • Electrical products • Medical equipment Design/Manufacturer • Custom Power-Supplies • Oil extraction equipment manufactures • Computer design/manufacture • Nano-tech Battery Manufacturing • Sheet-metal fabricators • Automotive parts supplier • Plastic injection molding • Generic drug manufacturer • Truck Components supplier • Vaccine Development and Manufacturing • Construction equipment • Robotic Medical surgical devices • Oil industry equipment providers • Commercial Heating Equipment • Aerospace equipment providers • Soap factory Canada / USA / Mexico / UK / China / Russia / India / Ukraine NEXUS NAFTA Manufacturing Expansion…To a LCC (Low Cost Country) MEXICO 1996 to 2002 A Maquiladora or Maquila (used interchangeably) is a plant in Mexico that retains a Maquiladora Permit from the Mexican government to import raw materials duty free into Mexico for manufacturing, assembly, repair or other processing. The foreign company must agree to re-export a majority of its production. • Low cost labor: Wages range from 15% to 25% of comparable rates in the U.S. Normal work week is 48 hours. Productivity often exceeds the U.S. rates. (U.S. Bureau of Labor) • Favorable duty/tax treatment : Southbound, the Mexican government allows duty-free imports of all materials and machinery needed for the plant. Northbound, many North American sourced products are now duty free under NAFTA. • 100% Ownership of subsidiary: Leaves total control for all operations in the hands of the parent. There are professional services available to handle such matters as personnel, accounting and import/export management. • Proximity to U.S.: Lower turnaround times compared to other low labor rate countries, lower transportation costs, and the ability for managers or skilled technicians to commute on a daily basis to the Mexican facilities is possible in the border areas. • Access to the Mexican Market: Maquilas may sell part of their previous years export output in Mexico’s 107 Million person consumer market . Also… Free trade with EU and other trade jurisdictions with registered Mexican subsidiary status. And tax compliance 8 4
6/7/2014 GLOBALIZED MANUFACTURING 2004 Onward CANADA MANUFACTURING A NORTH AMERICAN PROBLEM The future of Manufacturing in Ontario’s economy. 10 5
6/7/2014 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 TBM M 12 6
6/7/2014 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. 13 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 7
6/7/2014 http://www.canadianmanufacturing.com/fabrication/production/taking-back-manufacturing-51066 Professional Engineers Ontario http://sme-tbm.org/app/download/5809147904/PEO+TBM+article.pdf 8
6/7/2014 17 BNN BUSINESS NEWS NETWORK What can Canada learn from German Manufacturing? 18 9
6/7/2014 TBM Take Back Manufacturing WWW.SME-TBM.ORG WHY? ..Take Back Manufacturing FOR OUR KIDS!! 19 This is NOT a game!!!... Our Kids will think we don't make things!!! ? ? ? ? 20 10
6/7/2014 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 22 11
6/7/2014 CANADA TBM More than 500,000 jobs lost in 6 year period (300,000 Ontario) Only 25000 jobs added in Resource Sector 25% job Reduction (Quantity / Quality) 50% of Manf SME’s lost 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 Yet …. It’s argued we have skill shortage!!! (NOT a labor shortage) 23 What happened? 24 12
6/7/2014 USA OUR BIG BROTHER - 1% GDP Economists started to follow an almost Religious and fanatical view of free market doctrine (US GDP 2010=14000B) 25 USA OUR BIG BROTHER -1% GDP Globalized Trade Free Market forces… Chased Emerging Markets Used liberalized Trade approach Removed barriers and controls Accepted Out of Balance Trade. Assumed More Service Sector Jobs???? Assumed local exports would grow/balance (US GDP 2010=14000B) 26 13
6/7/2014 Global Trade Balance Imbalance 27 Global Trade Balance Imbalance The Age of Globalization and Over-Supply Uncontrolled Trade Balance has allowed emerging economies via corporations almost unlimited access to mature economy consumers. Means… Significant increase in the global labor supply without adequate controls. Means… Significant Job loss in the mature economies and increased inequality Free global flow of excess financialized capital/cheap money forcing down interest rates …. Irresponsible and non value added investment, lending and borrowing practices. Significant Loss of National government control of local Economies. 28 14
6/7/2014 USA -1% GDP Globalized Trade HUGE ONGOING TRADE IMBALANCE - 4% GDP Cumulative Deficit is now 50% 2010 GDP Significant government deficit and foreign borrowing 29 (US GDP 2010=14000B) -1% GDP CANADA (GDP=1350B) -2% GDP Canada/World -10% GDP Worse than USA numbers!!! 30 15
6/7/2014 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! 31 Major UNDER-employment About 12.5% EAST WEST Youth under-employment 20+% We need jobs! (Agreed that some skill mix is an issue) ??? Any ratio far above 1.5 is an issue ? TBM 32 16
6/7/2014 Ontario Economic Performance How has Globalized Manufacturing Affected our Province? M ONTARIO Reduction 13% GDP & 15% Employment Intensity Gap 17
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