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Northeast

New Hampshire is attracting manufacturers with all it has to offer in terms of a quality business climate, strong workforce and geographic excellence. By Staci Davidson

New Hampshire may be primarily known for its beautiful scenery and being first chair during the presidential primary races, but it’s quite the hot spot for manufacturing, as well. Some of the country’s first textile mills were established along the Merrimac River in New Hampshire, and manufacturing continues to be the backbone of the state’s economy, employing 70,000 people or 13 percent of the private sector workforce, according to Jeff Rose, commissioner of the state’s Department of Resources and Economic Development.

“It’s a unique state and a fantastic state for manufacturing,” Rose says. “New Hampshire always has had a rich tradition in manufacturing and it’s adapted in a fluid fashion to reflect modern manufacturing. The old skeletons of the state’s old mill buildings are now home to the most high-tech companies and universities.”

Rose explains New Hampshire has three distinct advantages for manufacturers:

* The Granite State’s world-class workforce and talent, as the result of its high high-school graduation rate and high attainment rates of education after high school.

* The business-friendly environment that stems from the low costs of doing business and easy access to decision makers.

* The first-rate quality of life.

“People who live here stay here,” Rose says. “New Hampshire has amazing diversity in close proximity. We are close to Boston and the ocean’s coastline, but we also have a great lakes region, amazing rivers and the White Mountains. All of the best things about New England are here.”

SupplyChain

The Rise Of The Bimodal Supply Chain

By Elliot Jay

Supply chains in the 21st century are faced with a wide range of complex issues. There has been an increase in risk levels, with data from supply chain intelligence provider Resilinc showing a 118 percent increase in disruptive supply chain events from 2014 to 2015. Meanwhile, companies are also having to meet the needs of evermore demanding consumers, with 24-hour delivery now expected.

In order to meet these challenges, supply chains must be faster and more responsive if they are to retain a competitive edge. However, many organizations’ supply chain technologies and processes are simply not capable of supporting the necessary level of risk and response management to operate in this world, and the gap between what the supply chain provides and the requirements of the enterprise is only widening. Even companies traditionally held up as shining examples of best practise like Dell and McDonald’s are having to radically update their supply chain processes to remain viable. It is no longer enough to be efficient, they need to innovate too, integrating disruptive technologies such as Internet of Things (IoT) and artificial intelligence to avoid being left behind.

In order to achieve this, companies are beginning to embrace the concept of “bimodal supply chains.” The idea of bimodal supply chain has been pushed heavily by Gartner in particular as a solution that meets the needs of supply chains in today’s world. David Willis, chief of research at Gartner, summarized the reasoning behind the theory, noting: “For decades, supply chain professionals have been rewarded for focusing on being operationally excellent, risk-averse and trained through continuous improvement techniques. However, that approach is evolving to include strategic thinking, change leadership and sophisticated finance and communications skills. It is crucial to be open to leveraging the wisdom of crowds and looking outside the company – and even outside the industry – for new ideas, and to bring those lessons back in practical ways. Learning how to explore through new means will drive bimodal adoption.”

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Profitability

As the manufacturing environment evolves, executives must evaluate and consider all costs, including workers' compensation insurance.

By John Rosmalen

For the last 11 years, manufacturing in the United States has been slowly moving toward a path to recovery. Based on U.S. Bureau of Labor Statistics, it can be viewed as a rebirth, albeit a gradual one. As the restoration of American manufacturing brings more jobs to the labor force, manufacturers will face a plethora of financial considerations to address including various laws and regulations, none the least of which is workers’ compensation insurance.

To understand the current milieu, here is a brief historical perspective on the evolving manufacturing environment and the challenges that will come with it. In the first decade of this century, American businesses were establishing partnerships with China to bring goods to the United States. Production costs were significantly below manufacturing expenses in the United States and chief financial officers focused more on risk management since there was no reason to be concerned about workers’ compensation costs and compliance. Then came the global financial crisis, which brought all of these problems to the forefront—poor product quality, safety issues, copyright and information theft.

Employees

The Future of the Manufacturing Skills Gap

By Jeremy G. Rice

The skills gap continues to challenge U.S. manufacturers as they seek to replace an aging workforce, implement new manufacturing technologies, and expand their businesses.  With society’s unfavorable perception of manufacturing careers and a nationwide focus on the traditional four-year college education, the skillsets of today’s workforce do not match up well with the hiring needs of manufacturing companies.

The skills gap is a complex issue with many causes and many solutions.  From 1979 to 2015, manufacturing jobs in the U.S. declined from 19.5 million to 12.3 million.  When taking the overall workforce growth over this period into account, the decline is even more dramatic.  Over 6 million of these jobs were lost due to the offshoring of manufacturing operations.  During that same time, national attention grew in focus on the importance of a four-year degree.  Parents, teachers, and guidance counselors pointed students away from careers in manufacturing and towards a college-educated career path.  As fewer and fewer people entered the industry, the existing skilled manufacturing workforce aged, leading to the widening skills gap that has become well known today. 

Midwest

A new program will help manufacturers benefit from in-depth planning and tailored business solutions. 

Almost all manufacturing firms can use some kind of help, expecially if they are working to onshore their operations or begin exporting. Baker Tilly Virchow Krause, an accounting and advisory firm, is launching a new initative to be of assistance in those areas.

In February, Baker Tilly formed the Center for the Return of Manufacturing (CFRM) – a resource to help U.S.-based middle market manufacturing companies execute their strategies by initiating or returning operations to the United States and unlocking export and revenue growth opportunities abroad. The CFRM will provide similar services to companies located abroad and for those with an interest in launching manufacturing operations in the United States.

“The United States manufacturing sector has undergone significant and fundamental changes in recent years, particularly in traditionally heavy manufacturing states,” says Jeff Jorge, CFRM leader. “We created the CFRM for our clients and those manufacturers who have been looking for advice and guidance to help manage those changes as well as those we expect to come.”

The CFRM is a community of influence and experience, providing the knowledge, proven processes and proprietary methods for successfully assisting with a range of manufacturing-related issues. Those issues include reshoring, global manufacturing, site selection, project financing, domestic and international tax, import/export and supply chain and technology services in addition to ongoing industry insight and tax reform updates.

“The CFRM will play an important role in the future of U.S. manufacturing by offering tools and hands-on support to manufacturers. We emphasize balance in our approach to help companies analyze, understand and confidently execute the favorable business case for reshoring, relocating, growing and optimizing operations in the U.S,” Jorge adds.

The CFRM community includes the knowledge and insight of hundreds of Baker Tilly professionals and is led by Jorge who also leads the firm’s international growth services practice and the Latin America service desk.

“We represent a great number of manufacturing firms and we are preparing them for anticipated changes in tax and trade policy,” Partner and Baker Tilly Manufacturing Industry Leader Brad DeNoyer says. “Baker Tilly’s depth and breadth of manufacturing experience positions the CFRM to play a uniquely important role in helping U.S. manufacturers achieve their goals in a complex and ever-changing global marketplace.”

“The global landscape for manufacturers is changing,” Jorge says. “They need foresight, advice, advocacy and resources and the CFRM is very well positioned to help those companies navigate the new future in manufacturing and product demand – both in the U.S. and abroad.”

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Washington

EPA Issues Final TSCA Reporting Rule for Nanoscale Materials

By Lynn L. Bergeson

The U.S. Environmental Protection Agency (EPA) issued on Jan. 12, 2017, a final rule under Section 8(a) of the Toxic Substances Control Act (TSCA) establishing reporting and recordkeeping requirements for certain discrete forms of chemical substances that are manufactured or processed at the nanoscale. This column summarizes the rule.

Reportable Chemical Substances

The final rule applies to chemical substances that are solids at 25 ºC and standard atmospheric pressure; that are manufactured or processed in a form where any particles, including aggregates and agglomerates, are in the size range of 1-100 nanometers (nm) in at least one dimension; and that are manufactured or processed to exhibit one or more unique and novel properties. The rule does not apply to chemical substances manufactured or processed in forms that contain less than one percent by weight of any particles including aggregates and agglomerates in the size range of 1-100 nm.

The rule defines unique and novel properties as “any size-dependent properties that vary from those associated with other forms or sizes of the same chemical substance, and such properties are a reason that the chemical substance is manufactured or processed in that form or size.”  Under the final rule, a reportable chemical substance is not just a substance containing particles in the size range of 1-100 nm, “it must also demonstrate a size-dependent property different from properties at sizes greater than 100 nm and is a reason the chemical is manufactured or processed in that form or size.”

Operations

Onshoring Profits: Rethinking Sourcing Strategies

By Lisa Anderson

Seventy percent of manufacturing and distribution executives think near-sourcing strategies will increase in the next five years, according to LMA Consulting Group’s proprietary research study on outsourcing, insourcing and near-sourcing.  This is a reversal of prior trends towards outsourcing.  In our experience with clients across all sectors and sizes of manufacturing and logistics, this is not uncommon. Executives rushed to outsource, following the in-crowd and have realized that they need to evaluate before jumping off the deep end of the pool when they haven’t learned to swim.

Although executives noted on the survey that they jumped on the bandwagon to outsource with an eye on cost, they are re-evaluating.  Several compelling factors are driving this re-assessment:

International

Canada is supporting the development of electric vehicle batteries that will be longer lasting, easier to charge and higher capacity. 

Canada's automotive sector is the country's largest manufacturing sector, producing more than 2 million vehicles per year, which translates to roughly one car every 14 seconds. Additionally, the auto sector employs more than 125,000 Canadians directly and another 398,700 indirectly. The auto industry creates more spinoff jobs than any sector. For every assembly job, six spinoff jobs are created.

To further the progression and innovation in this market, the Government of Canada is investing up to $1.9 million in Vancouver-based Nano One to support the development of cutting-edge electric vehicle battery technology. Nano One produces low-cost high-performance energy storage materials for batteries as well as a wide range of advanced nanostructured composite materials. The new technology will reduce the cost of the energy storage materials in electric vehicle batteries, resulting in batteries that are longer lasting, easier to charge and able to produce more energy. 

The funding, made available through the Automotive Supplier Innovation Program, will support the development and production of electric vehicle battery material in Nano One's pilot plant. The facility will simulate full-scale production of lithium-ion cathode materials and showcase Nano One's patented processing technology. The pilot will also demonstrate the cost, scalability, performance and novelty of Nano One's technology and will enable Nano One to significantly enhance the production of lithium-ion cathode materials. The investment is part of the Innovation Agenda, the Government of Canada's plan to create good-quality jobs for the middle class and those working hard to join it.

"The Government of Canada's Automotive Supplier Innovation Program supports automotive suppliers in developing ground-breaking products and bringing them to market,” says Jonathan Wilkinson, parliamentary secretary to the Minister of Environment and Climate Change. “We are proud to support these technologies, which will help create quality jobs and support Canada's middle class. By investing in Nano One, we are also promoting automotive sector innovation that will lead to a greener, more sustainable future."  

By investing in Canada's automotive sector, the Government is securing jobs, supporting small and medium-sized enterprises and ensuring the right conditions for innovation. The announcement was made by Jonathan Wilkinson, Parliamentary Secretary to the Minister of Environment and Climate Change, on behalf of the Honorable Navdeep Bains, Minister of Innovation, Science and Economic Development.   

"These projects illustrate how Canada's automotive suppliers are at the forefront of designing and building the super-efficient cars of the future—cars that are more energy-efficient and better for the environment,” Bains says. “The made-in-Canada innovations that come from these companies strengthen the skills, knowledge and business expertise that create well-paying jobs for Canadians. These innovations make our country's automotive sector a global success."

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