11/11/2015 TBM Take Back Manufacturing WWW.SME-TBM.ORG Take Back Manufacturing Reshoring essential for both Sustainable Supply Chains and Balanced National Economies in the future. Nigel Southway TBM Take Back Manufacturing WWW.SME-TBM.ORG Take Back Manufacturing Reshoring essential for both Sustainable Supply Chains and Balanced National Economies in the future. The Globalized manufacturing approach with efficient supply chain management has been the business norm in the last 2 decades and many experts now predict yet another sea change underway to move to a more balanced sourcing approach involving reshoring and localized trade blocs. The logic of Sustainable supply chains and a return to LEAN business practices utilizing advanced manufacturing technology throughout the whole supply chain will significantly impact how business will be done, and will be the next initiative that many business leaders and managers will have to understand and react toward.. We will explain the latest global trends and sustainable supply chain concepts and how the events that are unfolding will affect us all. 1
… 11/11/2015 ………………………………………………………………………………….. TBM Take Back Manufacturing WWW.SME-TBM.ORG Nigel Southway BSc IEEE C-Eng.C.Eng IEEE . MSc BIM . SME. Author. 40 years Broad Business and Manufacturing Experience British Engineering Apprentice…Manufacturing Engineer (Aerospace/Electronics) MOTOROLA Director Manufacturing Engineering / Lean and Six Sigma Implementation Author of CYCLE TIME MANAGMENT ... Fast Track to Time Based Productivity Improvement A ground breaking LEAN Thinking text book on the concept and implementation of Business Cycle Time reduction and continuous improvement.. Provides consulting coaching and education on Business Productivity Improvement and Advanced Manufacturing Engineering to all types of business sectors and helps develop a Vision, Strategy and Evolution plan to attack waste, capture productivity improvements, increase profits, and become more competitive in the global market. He has consulted many major organizations across many industrial sectors on improvement and LEAN THINKING organizational change and is currently coaching, consulting and educating worldwide on Business Improvement Initiatives, Joint Ventures, New Product Introduction Systems, Global Technology Transfer projects and Sustainable Supply Chain Management. Nigel is Society Manufacturing Engineering Toronto Past Chair in 2012-2013 , holds the SME Presidents Award, and is the leading advocate for the Take Back Manufacturing Forum and the North American Reshoring initiative in Canada. INDUSTRY WEEK 2
11/11/2015 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 6 3
11/11/2015 GLOBALIZED MANUFACTURING 2004 Onward CHINA MANUFACTURING 4
11/11/2015 Metal and Plastics + Welded Assemblies Components Mixed Volumes Subassemblies Some final assemblies 9 CHINA MANUFACTURING 5
11/11/2015 CHINA MANUFACTURING CHINA MANUFACTURING CANADA MANUFACTURING The future of Manufacturing in Ontario’s economy. 12 6
11/11/2015 CANADA MANUFACTURING A NORTH AMERICAN PROBLEM The future of Manufacturing in Ontario’s economy. 13 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. 7
11/11/2015 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 16 8
11/11/2015 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. 17 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 9
11/11/2015 http://www.canadianmanufacturing.com/fabrication/production/taking-back-manufacturing-51066 Professional Engineers Ontario http://sme-tbm.org/app/download/5809147904/PEO+TBM+article.pdf 10
11/11/2015 21 BNN BUSINESS NEWS NETWORK What can Canada learn from German Manufacturing? 22 11
11/11/2015 TBM Take Back Manufacturing WWW.SME-TBM.ORG http://www.sme-tbm.org/app/download/7240450499/TBM+Reshore+paper+.pdf TBM Take Back Manufacturing WWW.SME-TBM.ORG WHY? ..Take Back Manufacturing FOR OUR KIDS!! 24 12
11/11/2015 This is NOT a game!!!... Our Kids will think we don't make things!!! ? ? ? ? 25 GLOBALIZED MANUFACTURING 13
11/11/2015 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 28 14
11/11/2015 CANADA TBM More than 500,000 jobs lost in 6 year period (300,000 Ontario) 25% Reduction (Quantity and 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 ….we have a skill shortage!!! (NOT a labor shortage) 29 -1% GDP CANADA (GDP=1350B) 30 15
11/11/2015 -1% GDP CANADA (GDP=1350B) -2% GDP 31 -1% GDP CANADA (GDP=1350B) -2% GDP Canada/World -10% GDP Worse than USA numbers!!! 32 16
11/11/2015 ONTARIO Reduction 13% GDP & 15% Employment Intensity Gap Reduced Manufacturing intensity Offshore content has increased Declining Capital Investment ( 70% LESS) Reduced Investment trends will mean 25% further decline in the next decade 17
11/11/2015 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) We have become distracted by the failed policy to make us a resource based economy We must avoid the economists preoccupation with globalization/over-liberalized trade We must stop believing that we can have a healthy economy based only on services. We need to Take Back Manufacturing … 35 So what’s next? We need a critical mass of awareness by every-one to force action taking to recover our future…… THE GAME CHANGER! A 2 nd Chance? 36 18
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