Since CompanyWeek debuted two years ago this week, we’ve shined a light on 400 or so manufacturers, chronicled the policy efforts to support them (some good, some bad), and served as an advocate for manufacturing even as business voices debate the so-called manufacturing renaissance.
Here’s six takeaways from two years in business that also shape the journey ahead — for us and for the manufacturing community:
1. Manufacturing’s cross-industry comeback continues unabated. I said last year at this time that manufacturers were the story. Today, it’s the collective momentum in the sector. It’s not creating a tsunami of jobs, a reality that fuels manufacturing’s doubters, but employment growth is nonetheless impressive. Consider Colorado: CU Leeds’ always useful Colorado Business Review notes in its mid-year report:
“Employment in this sector continues to make gains, increasing 2.9% in 2014 and 2.9% year-over-year in 2015 for a total of 139,800 Manufacturing employees in the state. Manufacturing employment surpassed committee estimates by 600 jobs in 2014, and is continuing the trend by adding 2,200 more jobs than projected based on growth rates through May 2015. Higher growth in the durables subsector (3.9%) is offsetting lower growth in nondurable goods (1.2%) so far in 2015 year-over-year. Gains in Manufacturing have now occurred for four and a half consecutive years following a decade of employment losses.”
The Review seems almost surprised at the level of activity.
But ‘jobs’ isn’t the takeaway. Manufacturing’s multi-industry growth is. Whether food and beer, aerospace and bioscience, consumer products and advanced, engineered design and manufacture, the maker economy is surging. Louisville’s brilliant co-packer Fresca Foods gets 500 requests a year from emerging brands to manufacture product. Growth market, or not?
2. Public and private sector support isn’t keeping pace with manufacturing’s advance. There’s dissonance and a lack of uniformity about how to measure and track manufacturing, which leads to confusion about how to support it.
CU’s efforts, as good as they are, nevertheless track the design of some manufactured products — like satellites — as Professional and Business Services, a NAICS-driven methodology that works to under-report the impact of manufacturing. To measure only the build of a satellite as a manufacturing activity and not its design underserves the sector.
As I’ve noted before, manufacturing is scattered throughout Colorado’s economic development “Key Industry” framework. It results in uneven support. “Advanced manufacturers” using high-tech processes are the beneficiaries of recognition and money. Sew a jacket or backpack or make organic soup and support is spotty. Ergo:
3. Manufacturing should be a ‘Key Industry’ in a simplified economic Blueprint. OEDIT should dispense with the ‘advanced processes’ criteria and classify every company that makes something as “Manufacturing.” It would simplify the support ecosystem and work to provide needed resources to manufacturers across industries in a simpler, fairer way.
It would also make it harder for elected official to avoid responsibility.
4. Congressional inaction in support of manufacturing is a travesty. Today it’s easy for Colorado Congressman Ken Buck to rationalize his decision to ditch the Export-Import Bank, an entity that provided support to manufacturers.
“It is a type of corporate welfare,” Buck said, quoted last week in the Denver Business Journal. “And when we have $18 trillion in debt and we need to find places to cut, the Export-Import Bank is one area.”
Buck had no such compunction about the welfare-laden ag bill. But without a unified industry voice pushing back on the issue, as no doubt Ag interests do, Buck tacked away cleanly. That it happened at a CACI event — the Colorado Chamber of Commerce, sponsor of the long-standing ”Manufacturing Initiative’ — was disappointing.
Congress has also refused to play from strength and negotiate with the Obama administration to eliminate the onerous 5% device tax on bio-manufacturers or the confusing employer mandate in Obamacare, instead pursuing the dead-end strategy to repeal. 50 times. No relief, no accountability, no support.
5. Where robust support has developed, it now must evolve. We’ve spent millions of dollars to repair a staggering skills gap in manufacturing — a vestige of decades of offshoring. It’s time to let the programs work and now focus on competitiveness and business development.
I asked Dale Denning, vice president of sales for Shop Tools, Inc., about business prospects for contract manufacturers. “If you’re in aerospace or medical, it’s great. If you’re a job shop not working in those sectors, not so much,” he said.
Industry and the public-private partnerships should rally around a new Manufacturing sector to promote Colorado as a destination for maker businesses. Time to feed the business pipeline and let workforce development efforts do their stuff.
6. Manufacturers must agree on the way forward — one that involves a bigger tent. Efforts by manufacturers and entities that support them to come together and rally the sector have been commendable — but they remain industrial-centric. Walls still divide sectors and cross-industry collaboration remains low. (see point 3, above.)
Industrial manufacturing may never capture the public’s imagination as it once did. The clean rooms of bioscience and organic-food manufacturing and lifestyle shops churning out cycle parts and skis, can. Everyone benefits.
Manufacturing has never been more compelling. Its leaders and supporters should evolve and change the way it’s marketed to the public.
Follow their progress in year three at CompanyWeek.
Bart Taylor is founder and publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
ULA launch an eye-opener
/in General/by Bart TaylorColorado companies make a lot of cool stuff, but it’s hard to beat what United Launch Alliance is building from its Greenwood Village- based headquarters. This past Saturday ULA’s GPS IIF-11 mission lifted off from Cape Canaveral, Florida, hitting a 30 minute or so launch window after being delayed a day due to technical issues. ULA’s Atlas 5 rocket assembly was flawless, lifting the 11th GPS satellite into orbit of what will be a 12-satellite ‘constellation’ for both civilian and military use.
For the ULA technicians on-hand in Colorado, the launch seemed routine. For those in the viewing gallery, like me, it seemed anything but. Experiencing a launch from ‘mission control’ was a throwback a couple decades to Apollo and later to the space shuttle. It’s rocket science, and it’s a flat-out rush.
Actually it’s high-tech manufacturing at its best, informed by science and technology and supported by advanced supply-chain management. That we don’t call it manufacturing or classify it as such in Colorado says a lot about how far the sector has fallen in the hierarchy of most-favored trades. We call it aerospace, which of course it is, but ULA is one of Colorado’s most important and high-profile OEMs.
A joint-venture between Lockheed and Boeing, ULA boasts the marketing tagline ‘America’s Ride to Space.’ It’s every bit of that. A ULA rocket assembly will lift the next human into space in a Boeing capsule called ‘Starliner.’ That is, they’ll be next if ULA can beat its upstart competitor into orbit, Elon Musk’s SpaceX. ULA hopes to launch in October 2017. Two years from now. It’s an aggressive timeline.
The first Starliner will also follow ULA’s high-profile Mars mission, slated for next March, this on the heels of New Horizons and the stunning success in flying by Pluto that began on a ULA rocket assembly. It was also announced Monday that ULA has won a NASA contract for a commercial satellite launch, in addition to new programs that will improve the company’s competitive standing in an increasingly crowded field.
Can ULA become the new GM or Ford of Colorado? All three companies design and manufacture sophisticated vehicles. Each employ thousands of people and buy from local contract manufacturers and suppliers.
It’s not likely until more components are actually made here, though it shouldn’t matter. ULA’s rockets are assembled along a supply chain that begins in Colorado but extends throughout the southeast U.S. and today, into Russia for engines. ULA’s headquarters are here, along with design and engineering. Much of the fabrication and assembly is done in Decatur, Alabama. Final assembling and roll-out of the spacecraft happens in Florida — or California, as ULA missions also launch from Vandenberg Air Force Base.
The design and engineering jobs wouldn’t exist independent of manufacturing any more than GM’s car designers would, but we’ve created an arbitrary distinction. Warehouse or trucking jobs that depend on manufacturing don’t count either: Today we don’t correlate them with ‘manufacturing.’ If we did, economic data would reflect a more influential sector. As the Wall Street Journal‘s Justin Lahart points out this week, “goods production, most of which is manufacturing, represents 30 percent of gross domestic product.”
It’s a pesky side note to what’s otherwise a celebration of one Colorado’s most accomplished companies. And with more high-profile space missions to come, the light will only shine brighter on ULA and the region’s burgeoning manufacturing economy.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
[Nominate a manufacturing ‘game changer’ like ULA as part of the Colorado Manufacturing Awards. Here’s more information.]
Artisans abound: Colorado’s craft manufacturers compete globally, navigate homegrown challenges
/in General/by Bart TaylorPete Wagner and his merry band of ski makers call southwest Colorado home, Placerville, to be precise, on State Highway 145, the road into Telluride. Wagner Custom Skis will make around 1,500 pair of tailored boards this year, steady if ‘managed’ growth for one of the dozens of innovative outdoor gear and apparel manufacturers who call this region home.
Wagner boards look and ski the part of a high quality, low-volume craft brand, but making a lot more isn’t in the cards — for now. “We’re growing — we need more space,” Wagner says, “but real estate here is an issue; there aren’t a lot of options. It creates limitations in how we manage inventory.” Wagner’s not alone. From Telluride to Steamboat Springs to Denver, small but successful companies — maker businesses all — have reached a plateau where new challenges await.
It’s a familiar litany for small manufacturers: affordable real estate to accommodate growth; qualified, dependable labor; a parade of regulations and fees that intensify as business grows; and the need for greater brand awareness to compete at a higher level.
But these artisans of the modern manufacturing economy are resolute. They’ve already captured the ingredients that have come to define success in this economic wave — passion, authenticity, technology and process innovation — and take nothing for granted. Wagner’s invested in machinery, to be more efficient even if significantly higher volume eludes the company in the near-term. “We’ve increased production capacity by 50 percent,” Wagner says proudly, “with the same amount of labor.” Many have reached a level of profitability and predictability they only dreamed about, happy now to maintain a successful, meaningful lifestyle business.
Many others, like Wagner, aspire to the next level. It’s a group of companies and brands that years from now, will come to define business in the Rocky Mountain region. (We’ll showcase a few dozen prospects in next week’s holiday guide of regional consumer-manufacturing companies).
New barriers for growth companies stand in the way. With public investment in economic-development programs at record levels, you’d think a targeted resource kit would be readily available to help catapult these companies from early-stage success to breakout growth and profitability. Not so much.
“Brand awareness is our biggest challenge”, Pete Wagner says. I ask if the now-dormant Buy Colorado program, rolled out to much fanfare two years ago, or the more pervasive Made in America messaging, have been effective. “We haven’t seen direct evidence that it’s made a difference,” he offers, “but we’re selling an ultra-premium brand to skiers all over the world. The Colorado aspect’s important — it’s who we are — but it’s not that significant.”
It’s too early to jump off the Made in Colorado bandwagon but it’s also evident that initiatives designed to accelerate the growth of successful early stage maker businesses have to get better. The recent push in workforce development, as well-funded as it’s been, should produce short-term results. Industry-cluster strategies in aerospace and food and beverage are providing runways that accommodat well-managed, fast-moving brands. The development ecosystem is doing good things. More targeted help is needed.
At some point uber-competitive companies solve their problems — here or elsewhere. They’ll find reasonably-priced real-estate, available technology, labor, and infrastructure investments and development strategies conceived with manufacturers in mind.
It can and should be here. That’s Wagner’s intent. “We want to stay in this community – we’re an authentic ski brand,” he says emphatically. “Our people are passionate about being here.”
We should be equally passionate about making sure they stay.
Bart Taylor is founder and publisher of CompanyWeek.
Boulder struts its (food) stuff
/in General/by Bart TaylorFor the 25 companies ‘pitching’ to the judging panel at the 11th annual Naturally Boulder Pitch Slam & Party, the questions came fast and followed a pattern:
At stake for the winner was coveted booth space at Natural Products Expo West next March, spending cash, free business consulting and the attention and adulation of an industry sector that today has become a national superstar in the multi-billion dollar natural products industry.
The winner was Wild Zora — profiled in CompanyWeek last year — a husband and wife team whose tasty natural meat and vegetable snack bars (think ingredient-enhanced jerky) stood out from a group of four or five products that were clearly the cream of the crop. Josh and Zora Tabin’s story is as compelling as their snacks, which seem poised for a national breakout if the company can scale manufacturing, no small issue when meat is involved. Zora’s kitchen gets a daily visit from food safety inspectors.
Food startups dominated the proceedings, and product themes followed familiar trends in the natural and organic sector — gluten-free was a staple — with some some quirky, inventive angles. There were RollinGreens‘ ‘tater tots made with millet instead of potatoes; Cow’s Gone, a non-dairy ice cream with coconut milk and natural sweeteners; Rowdy Mermaid kombucha, inspired by the owner’s charming daughter; cold-filtered coffee and a slew of interesting brownies, cookies and a ‘savory’ snack bars. Savory flavoring in the energy bar category also seems a new trend. ‘Paleo’ is still in. Grain-based, sweet-tasting snacks were nowhere to be found.
But as narratives go, the food companies this year took a back seat to the larger spectacle of the event itself and the unspoken feeling among the packed house at the St Julien Hotel & Spa that this community may be changing the rules of an entire industry sector. I congratulated a beaming Clif Harald of the Boulder Economic Council on the event. The companies, he said, “are perfect examples of the fresh ideas and entrepreneurship fueling this important sector of Colorado’s economy.”
Harald is right, of course, but the implications of the annual gathering seem wider. The event brings to light the sea change in how new products are being brought to market, in how the industry innovates. The days of industrial food companies devising the next mega-snack in a laboratory, with a top-down go-to-market strategy, feels far away from these companies. These are passion-fueled entrepreneurs, prototyping in apartment kitchens and earning their chops at farmers markets. Buyers from Whole Foods and Lucky’s provide the big break, offering shelf space for the most promising to test retail ‘velocity’ — that is, how fast and furious the product sells. It’s a ground-up, organic methodology, and its become the new norm in developing the next great thing — a Larabar, ProBar, or 34 Degrees cracker.
Equally transformative is the manufacturing ecosystem, the network of co-packers and maker resources that help the high-velocity brands manufacture in sufficient volume to meet the demand that regional and national distribution requires. Co-packers manufacture for multiple brands. They’re Colorado’s most unheralded business catalysts, providing critical lift to food companies that inevitably must wrestle with the challenge of making more stuff.
Yet the manufacturing component seems poised to evolve again. Co-packers like Fresca, Kitchen Coop and Natural Food Works can work with a limited number of brands; demand is outstripping the supply of co-packing capacity. And some co-packers are launching in-house food brands. With solutions like The Food Corridor on the horizon to connect food brands with other manufacturing opportunities, the next great wave of food innovation may develop around, not through, today’s network of established food manufacturers.
As with other lifestyle manufacturing in Colorado, support from the state’s economic development office is a head-scratcher. I learned that a list of Colorado’s co-packers can be found in the Department of Agriculture’s web pages, because snack bars are made from ag products. But so is Voormi’s vaunted new high-tech outdoor apparel, made from from Rocky Mountain-sourced wool. One assumes Voormi is not an ag business.
It’s a manufacturing business, but policy makers should eventually find a way to provide promotional lift to Colorado’s food business, including its world-class manufacturing value-chain. Clif Harald accurately surmised, “We are recognized around the globe as an epicenter for natural and organic product innovation and leadership.”
That it all starts with 25 passionate entrepreneurs pitching to a room full of discerning industry supporters only makes is sweeter.
Er, more savory.
8 ingredients for Utah manufacturing success
/in General/by Bart TaylorSince launching CompanyWeek in 2013 and CompanyWeek Utah a year later, we’ve profiled more than 400 manufacturing companies in the Rocky Mountain west. What’s emerged is a clearer picture of challenges and opportunities that frame the development of a modern manufacturing economy — and a blueprint for how communities can foster a robust and growing sector.
What makes a great manufacturing community ‘of the future’? Here are eight ingredients:
Finally, rally around business leaders willing to challenge business-as-usual development strategies and use whatever leverage necessary to change the way manufacturing is supported in the city, state and national dialogue.
Utah’s poised for great things.
Bart Taylor is founder and publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Colorado women power the new manufacturing economy—and ponder their future
/in General/by Bart TaylorEric Peterson’s terrific profile of Rubadue Wire and CEO Sue Welsh serves the much-needed purpose of shining a light on one of Colorado’s most accomplished manufacturers. It’s also segue to a worthy topic, that of the profound influence of leading women in Colorado manufacturing.
Welsh’s story is noteworthy because she leads a growth company in an industrial sector, operating in global markets. There’s added interest because she does it alongside more men than women. It’s compelling because she’s the one sibling of 10 who emerged to lead her father’s business. I’d say she has star power; she’d disagree.
In Colorado, she has company. We’ve featured a long list but the upshot here, in Colorado, is that more women are not only extending family legacies in industrial companies — like Welsh, Susan Cirocki (Arrow Sheet Metal), and Katie Munro (Munro Companies) — but are leading a regional manufacturing surge in other sectors.
Liz Myslik (Fresca Foods), Kim Jordan (New Belgium), Koel Thomae (Noosa Yogurt), Mo Shaffer (Coyote Gold), Beryl Stafford (Bobo’s Oat Bars), Megan Reamer (Jackson’s Honest Chips), and others we’ve profiled are the face of a regional food and beverage sector tipping the national scene on its side. Annelise Loevlie (Icelantic), Diane Boyer (Skea), Tamara Smith (Gibson Athletic), Jessica Montoya (COSewn), C.J. Riggins (KidRobot), and Nicole Smith (Mary’s Medicinals) are among the region’s lifestyle manufacturing leaders. And the list goes on.
Public figures like Denver City Councilwoman Robin Kniech are effective advocates. Kniech is especially well suited to advance manufacturing. She hails from a Midwestern family with roots in manufacturing. “Denver is blessed with some strong women leaders in manufacturing, in sub-sectors like apparel where they are clearly leading, to women inventors using contract manufacturers and those who grew up in the industry and now run smaller, family owned shops,” she told me. “The challenge,” she added, “is whether and how the industry is willing to adapt to attract women workers.”
It’s a provocative assertion — that manufacturing must change to be a more diverse sector. “Lessons learned from other industries indicate that you can’t just ‘add women and mix’,” she says. “You have to think thoughtfully about the fact that statistically, women are still responsible for more home and parenting/eldercare responsibilities, which impacts the kind of workplaces most likely to attract them. For example, last-minute mandatory overtime, a practice in some manufacturing environments to cope with staff shortages or sudden changes in demand, might not be a good fit for women.”
Kniech adds, “The good news is that changes that make workplaces more attractive to women benefit all workers, including men, and are also similar to some of the trends more likely to attract millennials.”
Stacey Bibik, controller at Stacy Machine & Tooling and also a manufacturing brat, sees it differently. “I’m a tough gal,” she admits, “and I tend to stay away from the whole ‘workplace needs to be more female-friendly because we’re caregivers’ argument. Statistics and surveys have supported the fact that including, engaging, and advancing women in the workplace improves the bottom line.”
“So why the shortage in manufacturing?” she asks. “Because women lack encouragement and education about the realities of employment in manufacturing, and those realities relate to the personal satisfaction of making things and the diversity of career pathways available.” Bibik’s also standing up a Colorado chapter of Cleveland-based Women In Manufacturing.
Colorado’s lucky to have both women advocating manufacturing. More than that, the sector needs both voices. From my uninformed perch, there’s profound truth in each perspective. Both are right.
And the irony of manufacturing’s big tent (and getting bigger) is that high-growth industries like natural products and apparel, led by women, will shape manufacturing into one of the economy’s most diverse sectors. Regardless of historic barriers.
Now that’s rich.
Bart Taylor is founder and publisher of CompanyWeek. Contact him at btaylor@companyweek.com.
Reach Denver City Councilwoman Robin Kniech at robin.kniech@denvergov.org, or Stacey Bibik at sb@stacytool.com.
Startup star The Food Corridor gives manufacturers a boost
/in General/by Bart TaylorThe Food Corridor, Ashley Colpaart’s food-tech startup, is also the topic of her dissertation at Colorado State University, but to suggest it’s only an intellectual exercise would miss the point entirely.
“I’ve worked in the food realm all my life,” she told me as she was boarding a plane to San Francisco to present at the BonAppetech conference, “from working at the farmers markets with my parents to getting a master’s degree in Food Policy and Applied Nutrition [from Tufts University] and working in all areas of food production and distribution. I’m passionate about regionalizing food systems, in researching food hubs and innovative distribution systems.” Colpaart’s also a registered dietician and was instrumental in the development of the Northern Colorado Food Cluster.
Colpaart’s The Food Corridor leverages technology to impact local and regional food production by connecting food businesses in need of kitchen space with commercial kitchens licensed by local health agencies. The Food Corridor will provide online booking, payment processing, disbursement, and reviews.
It’s also a near-perfectly timed concept that’s quickly becoming the darling of the booming food-tech industry. Colpaart was the FoodTech Pitch Winner at Boulder’s 33Entrepreneurs contest in July, and won Galvanize Fort Collins’ Pitches and Pitchers in September. Colpaart finished in the “top third” in San Francisco, on a national stage. The startup is in a pre-seed funding stage.
Demand for kitchen space is off the charts. Co-packers — food manufacturers that provide the service for emerging brands — are slammed. And a tsunami of food makers — food truck operators, chefs, caterers, farmers, and ranchers, new brands — has exploded on the food and ag scene.
Turns out that school districts, commissaries, churches, restaurants, and hotels, among others, have great facilities that are underutilized.
Voilà! The Food Corridor.
Colpaart is currently focused on northern Colorado, though her eyes are fixed firmly on Denver and beyond. (The website says The Food Corridor is ‘currently piloting in Colorado.’) The idea is already blossoming. Proof-of-concept is coming easy. “Weld County School District’s facilities are under-utilized,” Colpaart says, “and school districts are generally strapped for cash. We’re filling a industry need and providing a new revenue source at the same time.”
The synergy with Colorado’s transformative sector of co-packers, like Fresca Foods and Natural Food Works, is also a selling point. “We’re helping co-packers ensure that food companies are a reality, that they’re ready for the next step,” Colpaart says. It’s no small issue. Fresca Foods CEO Todd Dutkin has told me the company receives 500 applications a year from emerging brands.
Colpaart describes it as the ‘access’ economy and for her it’s an apt description. She’s in the vanguard of wave of young, smart entrepreneurs who envision changing the way food is produced and distributed, or as she says “reimaging food systems and providing people new opportunities to connect with food.” It’s a wholly progressive and modern ethos that’s been percolating under the rubric of the ‘localvore’ movement. It’s a trend that’s exploding, driven by technology and sustaining factors that are feeding the growth of local manufacturing.
The epicenter for innovation in Colorado is Boulder, Weld, and Larimer counties, a growing food-tech community that boasts an empowering combination of agricultural assets, business incubation and companies transforming entire market sectors — like New Belgium and Odell, Noosa, and Madhava — all paving the way and serving as a model for young, motivated talent.
Like Ashley Colpaart and the community of progressive entrepreneurs establishing Colorado as ground zero for a new American food industry. Tomorrow’s 11th annual Naturally Boulder Pitch Slam & Party, a daylong celebration and contest to determine the best of the next crop of food manufacturers, further showcases the market. We’ll report on the event next week.
Bart Taylor is founder and publisher of CompanyWeek. Reach Bart at btaylor@companyweek.com.
Craft giant Etsy invites manufacturers to the party
/in General/by Bart TaylorThere’s a line that separates artisans from manufacturers. It varies industry to industry but those who cross it describe the telltale sign similarly. One night you go to bed a hobbyist and wake up a manufacturer, having spent a sleepless night wondering how in hell you’re going to make more.
Game on. Welcome to manufacturing.
We spend millions to make this path easier for some. In technology and healthcare, we incubate and fund ideas before anything’s made. The business landscape is dotted with Think Atomic and Techstars and Innovation Center of the Rockies, an incredible ecosystem that provides a lifecycle path where an idea is vetted, business planned, funded, prototyped, market-tested, and mentored before anyone is asked to buy or manufacturing bottlenecks are encountered.
But there’s a larger and equally passionate ecosystem, thousands of inventors, designers, crafters, cooks, and homebrew artisans with limited resources or expertise. They’re also eager to make a business out of it, but for this group it’s a harder path. Manufacturing’s a pain point for many.
Increasingly business is finding a way — credit a widespread maker and manufacturing revival — and this week an important service will be available to fledgling small businesses seeking enhanced manufacturing capabilities. Etsy, the giant online sales outlet for homemade, crafty products announced the launch of Etsy Manufacturing, a new platform, as the New York Times described it, that “grew out of a realization that many Etsy sellers wanted to grow, but were having trouble finding manufacturers willing to take on small orders from untested business partners.”
Etsy’s inviting manufacturers to the craft party. “Starting Monday, Etsy will invite manufacturers to apply to list a profile, complete with pictures, on Etsy Manufacturing,” the Times wrote. “‘Etsy will review those applications based on a set of criteria,’ said Amanda Peyton, and Etsy executive, ‘including how much the manufacturer makes in-house and how much it outsources itself.'”
Etsy’s not the first — Techstars graduate Dorian Ferlauto launched BriteHub to match industrial designers with manufacturers — but it’s easily the most newsworthy given its size and potential impact. Not for industrial giants but for the wave of American-made products over the horizon.
Will the current community of contract manufacturers benefit from registering on Etsy? According to the Times, the “site now lists over 32 million items from 1.5 million sellers and generated $1.93 billion in sales last year.” It’s conceivable that some manufacturers will find small-batch orders from a tier of products poised to become the next BB-8.
More likely Etsy’s move will advance the maker and manufacturing revival by encouraging even more collaboration between businesses in the manufacturing supply chain just beginning to find one another after decades of finding partners overseas, in Asian factories or European fabric and materials markets. And growth will result. It’s not a game changer; it’s a game enhancer.
But if Etsy works to connect more small businesses, directly, only good things will happen. It won’t take long for the next ProBar, Voormi, Lizard Skins, or New Belgium to emerge. In a fascinating report by the National League of Cities — Four Ways City Leaders Can Boost Entrepreneurship and Propel Economic Growth — the number one recommendation was to ‘Build Connections.’ The report suggested:
We couldn’t have said it better, though we tried.
Connect the players and let business find the way. And rest easy in the process.
CompanyWeek is hosting the next, important connections-building event. Don’t miss the 2nd annual Colorado Apparel Manufacturing Summit next Thursday, September 24 from 3-6:30 p.m. Register here.
CompanyWeek at two years: Six takeaways as manufacturing surges
/in General/by Bart TaylorSince CompanyWeek debuted two years ago this week, we’ve shined a light on 400 or so manufacturers, chronicled the policy efforts to support them (some good, some bad), and served as an advocate for manufacturing even as business voices debate the so-called manufacturing renaissance.
Here’s six takeaways from two years in business that also shape the journey ahead — for us and for the manufacturing community:
1. Manufacturing’s cross-industry comeback continues unabated. I said last year at this time that manufacturers were the story. Today, it’s the collective momentum in the sector. It’s not creating a tsunami of jobs, a reality that fuels manufacturing’s doubters, but employment growth is nonetheless impressive. Consider Colorado: CU Leeds’ always useful Colorado Business Review notes in its mid-year report:
The Review seems almost surprised at the level of activity.
But ‘jobs’ isn’t the takeaway. Manufacturing’s multi-industry growth is. Whether food and beer, aerospace and bioscience, consumer products and advanced, engineered design and manufacture, the maker economy is surging. Louisville’s brilliant co-packer Fresca Foods gets 500 requests a year from emerging brands to manufacture product. Growth market, or not?
2. Public and private sector support isn’t keeping pace with manufacturing’s advance. There’s dissonance and a lack of uniformity about how to measure and track manufacturing, which leads to confusion about how to support it.
CU’s efforts, as good as they are, nevertheless track the design of some manufactured products — like satellites — as Professional and Business Services, a NAICS-driven methodology that works to under-report the impact of manufacturing. To measure only the build of a satellite as a manufacturing activity and not its design underserves the sector.
As I’ve noted before, manufacturing is scattered throughout Colorado’s economic development “Key Industry” framework. It results in uneven support. “Advanced manufacturers” using high-tech processes are the beneficiaries of recognition and money. Sew a jacket or backpack or make organic soup and support is spotty. Ergo:
3. Manufacturing should be a ‘Key Industry’ in a simplified economic Blueprint. OEDIT should dispense with the ‘advanced processes’ criteria and classify every company that makes something as “Manufacturing.” It would simplify the support ecosystem and work to provide needed resources to manufacturers across industries in a simpler, fairer way.
It would also make it harder for elected official to avoid responsibility.
4. Congressional inaction in support of manufacturing is a travesty. Today it’s easy for Colorado Congressman Ken Buck to rationalize his decision to ditch the Export-Import Bank, an entity that provided support to manufacturers.
“It is a type of corporate welfare,” Buck said, quoted last week in the Denver Business Journal. “And when we have $18 trillion in debt and we need to find places to cut, the Export-Import Bank is one area.”
Buck had no such compunction about the welfare-laden ag bill. But without a unified industry voice pushing back on the issue, as no doubt Ag interests do, Buck tacked away cleanly. That it happened at a CACI event — the Colorado Chamber of Commerce, sponsor of the long-standing ”Manufacturing Initiative’ — was disappointing.
Congress has also refused to play from strength and negotiate with the Obama administration to eliminate the onerous 5% device tax on bio-manufacturers or the confusing employer mandate in Obamacare, instead pursuing the dead-end strategy to repeal. 50 times. No relief, no accountability, no support.
5. Where robust support has developed, it now must evolve. We’ve spent millions of dollars to repair a staggering skills gap in manufacturing — a vestige of decades of offshoring. It’s time to let the programs work and now focus on competitiveness and business development.
I asked Dale Denning, vice president of sales for Shop Tools, Inc., about business prospects for contract manufacturers. “If you’re in aerospace or medical, it’s great. If you’re a job shop not working in those sectors, not so much,” he said.
Industry and the public-private partnerships should rally around a new Manufacturing sector to promote Colorado as a destination for maker businesses. Time to feed the business pipeline and let workforce development efforts do their stuff.
6. Manufacturers must agree on the way forward — one that involves a bigger tent. Efforts by manufacturers and entities that support them to come together and rally the sector have been commendable — but they remain industrial-centric. Walls still divide sectors and cross-industry collaboration remains low. (see point 3, above.)
Industrial manufacturing may never capture the public’s imagination as it once did. The clean rooms of bioscience and organic-food manufacturing and lifestyle shops churning out cycle parts and skis, can. Everyone benefits.
Manufacturing has never been more compelling. Its leaders and supporters should evolve and change the way it’s marketed to the public.
Follow their progress in year three at CompanyWeek.
Bart Taylor is founder and publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Rural Colorado Apparel Manufacturing idea a finalist for Walmart’s U.S Manufacturing Innovation Fund
/in General/by Bart TaylorA highlight of last year’s inaugural Colorado Apparel Manufacturing Summit was the exquisite timing and passionate comments of a determined, spunky economic developer from Phillips County, Colorado. Julie Worley, executive director of PCED, rolled into the Summit from Holyoke, on Colorado’s eastern plains, with a desire to learn about the state of apparel manufacturing in the state, and an idea.
What she needed was an education. “Before the Summit last year I knew very little about the cut-and sew labor shortage,” Worley says. “As a rural economic development director, I was always on the lookout for industry that would work in small towns. I had done some limited research prior to the Summit, and what I learned through that research was enough to make me realize that cut-and-sew centers would work in our small, rural towns — and provide much-needed jobs and industry.”
The dialogue (here’s a recap) exposed Worley to apparel’s hard knocks and the mother of all barriers for emerging brands: the lack of domestic labor and modern equipment that today’s apparel and sewn-product entrepreneurs need to thrive. But halfway through the discussion, to a rousing applause, Worley informed the crowd that the labor, work ethic, and capacity to learn resided here, in Colorado, in the small towns of the Eastern Plains. Worley’s towns.
A year later, on the eve of the 2015 Apparel Manufacturing Summit, comes the stunning news that the idea, transformed with the help of collaborators Carol Engel-Enright, Darlene Carpio, Jack Makovsky, and Lisa Elstun, is now a finalist for the Walmart U.S. Manufacturing Innovation Fund. RCAM, short for Rural Colorado Apparel Manufacturing, with local investors already in tow, is making national news. And it could get even better.
RCAM aligns with Walmart’s push to reshore American manufacturing jobs and in the apparel sector decades of offshoring have decimated the cut-and-sew labor pool. It’s this sector’s version of the workforce challenge that most U.S. manufacturers wrestle with. Consumers have played an important role in revitalizing demand for U.S. product — think food’s locavore trend — but circumstances in Asia are also creating opportunity for American makers. Rising labor costs, instability in China, and the fatigue of managing long supply chains are factors.
Quality is another. As the RCAM outline explains, “Overseas manufacturing has resulted in ‘fast fashion,’ with the lowest price for the least style, poor quality fabric and materials, and poor craftsmanship. Domestic, local apparel production could bring a return of high quality craftsmanship and construction to the apparel industry if demand remains steady.”
Here, there’s little reason to believe it won’t. Colorado’s already a destination for entrepreneurs launching lifestyle businesses. This year’s Summit should feature a new crop. RCAM could be a catalyst, though the prospect of the state becoming a mecca for emerging brands seems more daunting without the resources and support other manufacturing industries receive here. Apparel and sewn-product manufacturers are companies without a home in Colorado’s statewide economic development plan.
That reality doesn’t diminish Worley’s enthusiasm a bit, though her view is informed by an authentic dose of modesty. She’s a bit overwhelmed her idea has gone this far. “I’m very pleased — and somewhat in awe — of how the RCAM network is coming together,” she says. “With the possible opening in the not-too-distant-future of the Wray center, the vision will soon be a reality.”
It’s here, in the small towns of eastern Colorado, where economic opportunities are sometimes far and few between, that RCAM could mean everything. The RCAM proposal calls for startup and operating capital for six months and is specific in identifying advanced equipment like a digital patternmaker and a laser cutting system as well as digital textile printing systems.
But it’s the people factor and rural setting that inspires Julie Worley. “Revitalizing economic development efforts in our rural communities — that’s what really got me excited,” Worley says. “For a variety of reasons, it is hard to locate any industry in the small, rural areas of the state, but this industry will work in small towns — and that’s what we need in the country.”
In the ‘country.’ Indeed.
Don’t miss the 2nd annual Colorado Apparel Manufacturing Summit, September 24 in Denver’s RiNO. Registration and details here.
Bart Taylor is founder and publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
CAMA turns a corner
/in General/by Bart TaylorCAMA was developed and funded by OEDIT to do what CAMT wasn’t, leading to Confusion Around Manufacturing Acronyms that today is more a humorous sidebar to the evolution of Colorado’s official manufacturing trade association. (We could go on: CAMT, the erstwhile Colorado Association of Manufacturing Technology — now Manufacturer’s Edge — was neither an association nor dealt with technology.)
Paul Harter, president and CEO of Aqua-Hot and chairman-elect of CAMA‘s board of directors, is bemused with the naming convention. “I think we should consider dropping the ‘advanced’ and leaving it at Colorado Manufacturing Alliance,” he told me, half in jest, referring to the second letter in CAMA’s name that still causes some headaches for the association. He’s serious though in his reasoning. “We need to drop the exclusionary language that works to keep this community apart and do everything we can to bring it together.”
It’s this mindset, shared by the new CAMA board chair Brian Burney, CEO of La Junta standout Oliver Manufacturing, that assures many industry stakeholders that CAMA is catching its wind after a couple of tumultuous years. I recently spoke with Burney and Harter to discuss CAMA’s direction and objectives.
“We’re a startup organization, still,” Burney admits. “We’ve been in an evolutionary state and to some degree haven’t yet set a clear strategy . . . but we have to keep asking, ‘How do we energize manufacturers across the four corners of this state?’ CAMA has to have as much benefit for rural companies as it does for those in urban areas.”
It’s Harter’s calling card. “We have to link manufacturers together, even share spaces where we can. It’s a new way of thinking about manufacturing. I’m going to look outside my industry, to food and beverage, to cut and sew, to learn and add value to my business. They’re producing as well!” he exclaims, echoing similar themes touched on regularly in this column. “It’s blocking and tackling. FourFront is only one means to an end,” he says, referencing the federally-funded initiative that’s become CAMA’s primary focus, “and we need to make sure there are other tools in the toolbox.”
FourFront, formerly SMART, provided CAMA much-needed resources and a mission: identify manufacturers who stand to suffer from defense-industry budget cuts, develop infrastructure and systems to retrain and retool operations to improve competitiveness, and leverage the investment across manufacturing to the betterment of the sector.
Again, after a somewhat rocky start, the program seems to be on more solid footing. (Here’s an overview.) Yet Burney echoes Harter’s sentiments that FourFront is one tool — not the endgame — in advancing manufacturing. “The project is a means to pursue the objectives of the Blueprint (OEDIT’s guiding economic development document), certainly an important one as it created a funding mechanism,” he says. “FourFront also helps us connect with other national resources that we need to increase our competitiveness.”
Burney’s unambiguous about manufacturing’s competitive challenge. “We are resource constrained, and a lot of things have to be done,” he states flatly. “Nobody’s working on the problem of ‘what are we doing from a resource level?’ Colorado as a whole has tapped and nurtured an entrepreneurial spirit, but connecting manufacturers with current resources is something that’s not being focused on.”
The honest assessment, from both men, is refreshing. That we’ve triangulated a conversation from Castle Rock, with Harter in Frederick and Burney in La Junta, is also promising for a sector that must tap energy and innovation from the entire region and not just Denver to be successful on a global stage.
But the promise of a more connected, synergistic manufacturing sector with CAMA at its center remains just that to a large degree. The organization is still challenged to widen its view outside the lens of its own operations. ForeFront, in particular, has relegated ‘rebranding’ and other early CAMA objectives to the backburner. CAMA also lacks mindshare among lifestyle and consumer manufacturers, or significant representation in Colorado’s incredible natural products community.
It’s a reality not lost on Burney or Harter. I ask if CAMA just needed to grow up a bit to find a new, more connected place within a broadening manufacturing economy. “I think there’s a lot to that,” Harter says, and Burney reinforces the notion, confident that FourFront will connect manufacturers in diverse industries by exposing them to “globally competitive ideas” — regardless of what the community is called.
Bart Taylor is founder and publisher of CompanyWeek. Reach him at btaylor@companyweek.com.