The 2017 Colorado Manufacturing Awards celebrated innovation in manufacturing at The ART, a hotel, on April 13. Out of 30 deserving finalists across 10 categories, awards went to 10 winners for work in advancing the industry.

Emcee and CompanyWeek Publisher Bart Taylor called Colorado “a model for national manufacturing.” Noted Taylor to the event’s 240 attendees: “Many of you have small businesses competing improbably against larger businesses. Resources alone don’t equate to market leadership.”

The event was presented by CompanyWeek and Manufacturer’s Edge. Sponsors included BKD, UMB Bank, Squire Patton Boggs, Alliance Insurance Group, Colorado Advanced Manufacturing Alliance (CAMA), Colorado Office of Economic Development and International Trade, the City of Fort Collins, and the Northern Colorado Manufacturing Partnership.

Beyond innovation, teamwork was a common theme for the night. As Manufacturer’s Edge CEO Tom Bugnitz noted, “Manufacturing is the people behind it. We’ve got the best in Colorado. End of story. Period.”

The 2017 Colorado Manufacturing Awards Winners

Beer & Brewing: Crooked Stave Artisan Beer Project

The Denver brewery won for its mastery of sour beers and taming the wild brettanomyces yeast strains that produce them. “For our brewery, it’s founded out of research, and to see that research turn into manufacturing and something we can taste here today is really exciting,” said Crooked Stave founder Chad Yakobson.

Food & Beverage: MycoTechnology

Harnessing the food-enhancing power of fungi, MycoTechnology is moving from its initial bitter-blocking innovation, ClearTaste, into the protein market with PureTaste. “It will allow us to feed the world in new ways,” said Pete Lubar, founder and COO. Lubar expects the staff to hit 80 employees in 2018, up from four in 2013.

Industrial & Contract: Tag Team Manufacturing

The Parker-based contract manufacturer has invested in automation to stay on the leading edge. “This sounds trite, but the real support comes from our people,” said Tag Team CEO Terry Taggart. “And we wouldn’t be here tonight without our clients. We look forward to building upon the platform that’s been established.”

Electronics & Aerospace: Aleph Objects

Manufacturer of LulzBot 3D printers, Aleph Objects has seen annual sales grow more than tenfold to about $20 million in four years. “The company’s grown tremendously,” said Director of Marketing Ben Malouf. “We are totally focused on user freedom. We share everything under free licenses. We are really proud that not only are we manufacturing in Colorado and the United States, but we’re doing it in a way that’s completely unconventional.”

Bioscience & Medical: PharmaJet

CEO Ron Lowy credited CTO/COO Chris Cappello, and pointed to the fight against polio as an example of innovation at PharmaJet. “We’re right on the verge of eliminating it from mankind,” said Lowy. A shortage of vaccine is a big hurdle, but PharmaJet can help rectify that with its needle-free technology. “We invented a device that gets the same immune response with 60 percent less vaccine.”

Women in Manufacturing Woman of the Year Award: Marcia Coulson, Eldon James

“I can’t wait to get back and share this with the 45 people I work with,” said Coulson, president of the PVC-free medical tubing manufacturer. “You become who you associate with, so choose good friends, choose good co-workers, and good things will happen.”

Innovation in Supply Chain: Ardent Mills

“Nothing happens without supply chain,” said CAMA’s Tim Heaton as he introduced the category. His analogy involved the realization you’re missing a key ingredient in the midst of making dinner. “Your cost just skyrocketed, and you probably have six angry customers at the table.”

Accepting the award, Ardent Mills COO Bill Stoufer said, “We’re just a sleepy little company that feeds 100 million people a day.” The flour-milling giant established its headquarters in Denver in 2014. “I grew up in Iowa and this food scene in Colorado is unrivaled across the country,” added Stoufer. “We’re very proud of it, and the state should be proud of it, and we couldn’t be more happy to be here.”

Built Environment: Prescient

Prescient‘s system for manufacturing steel-framed buildings has quickly gotten traction in the market as it expands nationally. Chairman and CEO Satyen Patel, a self-described “private-equity guy,” said that co-founders Michael Lastowski and John Vanker “deserve all the credit.” The company has grown from eight to 350 employees and won 29 patents in five short years and will cross the $100 million sales mark in 2017. Said Patel: “This company is on a roll.”

Energy & Enviro: Forge Nano

Forge Nano specializes in next-generation nano coatings that make for safer, longer-lasting lithium-ion batteries. “The key to our success was a really good team,” said VP of Engineering James Trevey. “We’re really excited about what we’re doing and there’s not one person who clocks in just like it’s a job.”

Lifestyle & Consumer: Ross Reels

“A lot of our success has been driven by two things: the stewardship of our employees and the stewardship of our city,” said David Dragoo, president of Ross Reels‘ parent company Mayfly Outdoors. The company has called Montrose home for more than 30 years and has numerous employees with 25 or more years of tenure. “We’re just really proud to represent Colorado manufacturers and Western Slope manufacturers,” added Dragoo.

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New research from the Reshoring Initiative confirms what many have been speculating: Rising costs for overseas labor and services and important brand considerations are now compelling U.S. companies to reshore jobs or create new jobs domestically.

From the new report:

“In 2014 and 2015 parity was reached between offshoring and returning jobs, indicating that the net bleeding of manufacturing jobs to offshore had stopped. As of 2016, for the first time, probably since the 1970s, there was a net positive gain in U.S. jobs. The U.S. has gone from losing about 220,000 manufacturing jobs per year at the beginning of the last decade, to adding 30,000 jobs in 2016. Measured by our trade deficit, of about $500 billion/year, there are still 3 to 4 million U.S. manufacturing jobs offshore at current levels of U.S. productivity, representing a huge potential for U.S. economic growth.”

As Harry Moser, founder of the Reshoring Initiative, says in the new report, “The tide has turned.” For American manufacturers, it may now make economic sense to manufacture in the U.S. where it didn’t before.

Moser has been documenting trends in manufacturing economics for several years. His contribution has been to provide manufacturers data, to one, help them understand trends (such as: “What industries and companies are reshoring jobs, and why?”), and reevaluate their own offshoring decisions. “We get their attention by showing how much is happening, and then, appeal to them to reevaluate,” Moser explains. “We have a free online ‘Total Cost of Ownership Estimator’ tool, which helps them go beyond their historical sourcing practices.” For companies, that’s always started with price, as in: “Where can I find acceptably competent workers at the lowest possible wage?”

But Moser’s tool incorporates other elements that often add up to 15 to 20 percent of additional costs to send jobs offshore, like “carrying costs of inventory, travel costs, intellectual property risk, and the impact on innovation when you separate engineering from manufacturing (or bring them back together), the lost orders and lost customers when you have volatility in demand and you stock out because you have a two- to three-month delivery where you wouldn’t have stocked out if you had a two- or three-week delivery because you have a local source or make it in your own factory here.”

As he began running the numbers, what he suspected might happen, in fact did. “When companies do the analysis, in some cases — not all cases — it makes sense to bring the work back,” Moser says. “To quantify that a bit, we took the first batch of cases we had with China versus the U.S., and in 5 percent of the cases that the company had done a cost analysis, the U.S. had the lowest price. But based on a total-cost analysis, the U.S. won 53 percent of the time, just by using the correct metrics.”

Is the number improving, given rising wages in China and other historically low-wage markets? “We believe it is,” Moser answers. “One the one hand, Chinese wages have been going up 13 to 15 percent per year. On the other side of that, the Chinese are investing more in automation and productivity than we are, so their productivity rate has been rising much faster than ours has been, and that counteracts some of that wage increase.” The new data seem to confirm the trend.

Moser’s analytics also coincide with a profound change in the how U.S. companies are building brands. Today, offshoring jobs and service contracts in pursuit of the lowest cost provider is out of favor, inconsistent with a new consumer ethos that favors quality and value — often the added value of creating homegrown jobs.

Hap Klopp, founder of The North Face, provides an elegant explanation as to why companies reach a similar conclusion as those using Moser’s total cost of ownership tool:

“The mistake the people in the apparel business are making right now is that they think it’s a race to the bottom because of price, and everyone’s trying to take ‘make’ out of the product. The real differentiation (for brands) is making something of value. If you’re not afraid of making the best, you’ll stand out from the crowd. 80 percent of the crowd are just trying to make something cheap, and the reality is that the cost of making these products at a distance is going up and up and up. The labor costs in China, in India, and in other places is going up much faster than in the U.S., and in eight or nine years the labor costs will be the same. Then the long lead times of getting products from Asia are really going to be a hindrance. There’s going to be more close-to-home product manufactured, and addition to that, ‘value’ is going to take over. And a brand is shorthand for value.”

The two related, but powerful trends — a new emerging price equilibrium based on true total costs of offshoring jobs, and evolving consumerism that values local manufacturing and its positive byproducts — are favoring the U.S.

It’s important new methods evolve to shore up support. In keeping with Klopp’s comment, the business and development ecosystem must rally to establish complete and compact supply chains that support local manufacturing. Gaps in the supply chain are plentiful. Labor tops the list, growth capital is stubbornly hard to come by, and the availability of structured services to accelerate growth companies is spotty. Some industries need more help than others.

But if a wave of new American brands equates success with quality manufacturing, and the economics of making are better here than overseas, maybe for the first time in decades, we may quietly have reached a tipping point. The tide might well have turned. The U.S. could finally be winning the war, if it’s only begun.

Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.