AMERICAN MANUFACTURING 2013

   I had someone recently ask me what I see as the biggest stories in American manufacturing for 2013.  Four things sprang to mind:

   1.  OBAMACARE.  Anxiety among businesses large and small has been rampant since the Supreme Court gave the go-ahead in mid-2012.  Manufacturers have seen rapidly-rising health insurance costs as insurance providers girded their loins for this brave new world.  With health care a large and growing line item for most of us and our associates, ObamaCare has been a big story.

   2.  SHALE.  North America's oil & gas boom, driven by technological improvements, has entire industries rethinking how they operate.  Our energy assumptions are being reset - largely for the better.

   3.  AUTOMOTIVE.  This leaner sector still casts a long shadow through the supply chain.  The robust rebound to meet pent up demand has many manufacturers smiling.

   4.  RESHORING.  Though some industries will never return to N America, some at the margin are moving away from the rising labor and transportation costs in Asia and toward the shorter lead-times and greater flexibility of being closer to their markets.  The total cost of ownership (TCO) has swung more in our favor.

   In contrast to much of what has occurred over the past two decades, it's energizing to recognize that more of the big stories of this year are actually POSITIVE for N American manufacturing.

  What do YOU see as the Big Story for American manufacturing this year?   

LEADERSHIP

   The Pro Football HOF game ushers in the return of football season this weekend.  OSU head coach Urban Meyer looks forward to the new season and the chance to vie for a national championship, too.  From Maine to Hawaii and Florida to Alaska, high school kids are gearing up for the fall campaign. 

   Meyer believes that, though talent, coaching, training and tactics matter, the key to success is leadership.  That’s why he teaches a class on the subject for a select group of his Buckeyes.  Part of the class centers on this simple equation:  E (event) + R (response) = O (outcome).

   “You can’t control the event,” Meyer explains in the Columbus Dispatch.  “You can’t control the outcome.  But what you can control as the leader is your response.  Your response as a leader is the other people’s ‘E’.” 

   We each have an opportunity to lead in our work, in our relationships and in our hobbies.  When we live and act purposefully, not impulsively, we set an example for others, create a culture of accountability and improve our chances of building a consistent winner.

VISUAL LOAD

   I recently spoke with a long-time industry friend who does consulting for retailers.  She chatted about the challenge of managing “visual load” in stores.  As anyone with eyes to see can attest, walking into most stores is an assault especially on our visual senses.

   Our job in display design and fixture execution is to better organize, even tame, the visual onslaught so shoppers can be put at ease, more easily make sense of what they encounter and find what they need without confusion or distrust.  This is tough as every brand vies for the attention of that shopper and every store tries to sell her everything they can.

   At Tusco Display, we do more than make racks.  We create spaces where our clients’ products are found and can flourish.  We choose colors, materials, fasteners, angles, dimensions and graphics to complement the products.  We improve the in-store experience for those searching, overwhelmed shoppers.  We lead clients to put their best feet forward on their most important stage: the store.  We make a true difference for shoppers, brands and retailers alike.

   It’s easy for people to overlook what we do in creating environments, in presenting products, in uniting consumers and products in the marketplace.  It’s honorable, vital work about which every one of us can feel pride.

INSOURCE TO BE IN SYNC

The Atlantic magazine features an article this month that highlights the transformation in thinking at one of America's greatest industrial powerhouses.  GE has remade their Appliance Park (KY) facilities to return much of their appliance manufacturing from other countries to the United States.  They're doing it because it makes economic sense.

The same benefits that accrue to a GE benefit buyers of custom store fixtures and point-of-purchase displays, too.  Chasing the cheapest labor has costs.  Too many consumer package goods companies, retailers and fixture producers have learned this the hard way.

We see more store equipment destined for North American stores with "Made in America" today and expect to see more because (a) transportation costs have grown; (b) Asian labor rates have climbed while American labor rates have stagnated; (c) American workers are objectively the most productive in the world; (d) project time lines are compressed and will only become more so; (e) US manufacturers have invested in labor-saving technologies and processes, e.g., Lean, to reduce costs as a matter of survival; (f) non-labor factors of manufacturing - raw materials, energy, space, equipment, capital - are relatively plentiful and affordable in North America; and (g) seamless coordination makes for better outcomes.  Insourcing lets us better synchronize and meet the needs of retailers, CPGs, designers and manufacturers.

North American manufacturers can compete with anyone in the world - and are only getting better.

OLYMPIC DREAMS

The Olympics captivate us, don’t they?  We marvel at the feats, strain to see our nation’s athletes compete, hope for success.  None of us may expect to compete at that level but we can still learn from it.  Here are a few ways to apply Olympic lessons to our lives.

1.    Persistence pays.  How many stories did we hear of athletes overcoming tremendous odds to succeed?  Look no farther than the Paralympics which start this weekend for more such inspiring stories.

2.    Set goals.  If you don’t know where you’re going, what you’re trying to achieve, how will you know when you get there?  How many athletes reached London without explicitly making it their goal?

3.    Feed your passion.  Dreams are not enough; passion pushes people to perform.  Just “keepin’ on keepin’ on” doesn’t lift your game to winning heights.  Find your passion then feed it.

4.    Teamwork trumps talent.  Think of the sand volleyball duo of Misty May-Treanor and Kerri Walsh Jennings.  There may have been better, younger, faster athletes across the net but no better team in the history of the game.  Their teamwork was their advantage.

5.    Have some fun.  Performance takes a great deal so you better build in some fun or what you’re doing will become drudgery.  

None of us may be Olympians but we can all be champions.  

At Tusco, we had a client who needed some in-store equipment in their London flagship store.  Their Chinese supplier had failed them.  Our team sprang into action, went to Olympic lengths, worked around the clock and met this emergency need in record time.  We helped our client win in London.  We received no medal but we showed our mettle.

NOT JUST METAL BENDERS

   The Tusco Display story started over 60 years ago when we printed advertising signs.  Producing the metal substrates on which the signs were printed came next and we became metal benders.  Along the way, the business morphed into industrial sewing, stadium seating, storage tanks and eventually the production of permanent displays and store fixtures.
   Today, we produce products in fiberglass and various plastics, we work in wood and laminates, and we even dabble in fabrics and graphics.
   We still bend lots of metal, of course, to produce displays and fixtures as well as everything from aluminum fire truck doors to stainless steel control cabinets, tandoori ovens to bingo machines.  But the heart of what we do is far more than cutting, bending, welding and coating metal.
   We are mental benders.  We help consumer packaged goods (CPGs) companies – many famous name-brands – effectively present their wares in retail environments throughout N America.  We help them connect with shoppers.  We influence stores to carry products and shoppers to buy them.  We help shoppers find what they need and want.  We understand, design and produce to meet the needs of the CPGs, their retailer partners and shoppers.
   Understanding how people interact in-store, how they approach purchase decisions, how they are attracted or not attracted to products in stores is far more of what we do today than simply printing signs or building shelves.  Tusco helps create in-store inspiration.

DYNAMIC

GlobalShop, North America’s largest showcase for anything that happens in stores, happened two weeks ago. Attendance registrations were up 11% over 2011, a promising sign of renewal and growth in our industry.

I have attended these events for years. My, how times have changed! The events have become better-attended, more educational and more international. Ours is a vital, dynamic industry.

Why is our industry so dynamic? First, people buy in stores. Yes, yes, more and more online buying occurs but still 92%+ of every American consumer dollar in spent in a store, not online or through the mail. Stores matter to both buyers and sellers. It remains the only place where the shopper, product and mindset to buy coexist simultaneously. Instant gratification!

Second, while we serve the largest consumer packaged goods companies in the world, ours is a deeply entrepreneurial industry. Companies large and small compete on the basis of creativity, responsiveness, execution and value. Competition drives dynamism.

Third, buying and selling is rapidly evolving. Technology-enabled shoppers surf for information, seek & share recommendations and comparison shop. Online and in-store are converging. Stores deploy new technology to communicate and employ data-mining technology to predict and spur purchases. In-store dynamically unites consumers with the products they need and want.

The oil and gas industry is having a dynamic impact on our eastern Ohio region but in-store dynamism spans the globe. Ours remains a great industry with great opportunities.

FEED YOUR HEAD

Few of us would purposely skip a meal, let alone fast for an entire day. We need to be fed to function. The same logic applies to our minds.

During a recent meeting with our sales team, I asked them to consider what they feed their heads. Are you feeding yourself information to enhance the value you deliver to your clients? Are you continually learning what’s new, what’s relevant and what’s changing in our industry? Are you stoking your curiosity and starving complacency? Are you paying attention to what’s affecting your clients, prospects and competitors? What are you reading, watching and hearing?

Just as you know that a diet of Twinkies, cookies and energy drinks isn’t good for you, consider the quality and variety of what you feed your mind. Watching sports or sitcoms, reading comic books or People and listening to music are all innocent diversions but don’t consume those things to the exclusion of meatier, more nutritious fare.

Learn. Grow. Improve. What you feed your head becomes the fuel that propels your career and your life. The right diet makes all the difference.

“WE MAKE THINGS HERE”

That’s a phrase people in northeastern Ohio will soon see and hear more often in advertisements and promotional materials. After decades of “Rust Belt” hell, manufacturing is enjoying a renaissance here. Many old-line industrial operations have fallen by the wayside while industries like aerospace, materials sciences and health sciences are growing. Industries that apply world-class technologies and techniques are flourishing here. That’s why the state’s regional economic development group, Team NEO, has chosen that phrase as their new tagline.

The phrase reflects new economic research showing that, between 2010 and 2015, manufacturing in the region’s 18 counties is expected to far outpace manufacturing growth in the rest of the country.

This phrase aptly describes Tusco Display, too. Unlike many display producers who may design and sell but outsource all of their manufacturing, Tusco Display has consistently reinvested in our manufacturing capabilities, even during the tough years of the recent past. That’s why we can say, “We make things here” today, too.

With modern production capabilities and skilled associates, northeast Ohio manufacturers are winning business and finding growing success. At Tusco Display, we’re proud to count ourselves among them.

WHERE'S THIS ECONOMY HEADED?

In the wake of a shaky summer, the US consumer confidence index has reached its lowest point since 1980. Though mortgage rates are at a 60-year low, few houses are selling and many people are still coping with home values below their mortgage values. News reports today claim that the American family income has dropped for the third year in a row – to roughly 1996 levels (in inflation-adjusted terms).

Things are tough out there, right?

Yet, many area manufacturers continue to hire and invest in their businesses. Tusco Display recently opened a new facility in New Philadelphia. In a Tuscarawas County Chamber of Commerce survey of 43 of our larger manufacturing concerns, 26 of them plan facility or workforce expansions. And we’re on the cusp of a natural gas boom here that will bring many new businesses, people and dollars to our regional economy.

Why the disconnect? It’s two-fold. First, people are still hurting from the Great Recession of 2008-9 and feel insecure. They lack confidence to take risks, e.g., switch jobs, buy a home, start a business. They are playing things close to the vest. They’ve learned from past excesses.

Second, both federal and state governments are making many changes that make us uneasy. From ObamaCare and debt ceiling brinksmanship to SB5 and restructuring state agencies, change makes people uneasy. We like stability and predictability, things in short supply these days.

Times will improve and we will not see a repeat of 2008. Until people see it, feel it and believe it though, our lack of confidence will impair our ability to take advantage of the opportunities before us. At Tusco Display, we’re moving forward with confidence.

Innovation

According to a recent Harvard Business Review, Procter & Gamble is developing a "new-growth factory" to combine the best features of Edison's labs and Ford's assembly lines to deliver fast, far-reaching breakthroughs. That's helped the company's innovations hit their profit-and-revenue targets 50% of the time, up from a 15% a decade ago, and executives say they expect innovation-driven revenue to double again in coming years. "We know from our history that while promotions may win quarters, innovation wins decades," says P&G chairman and CEO Bob McDonald.

The custom display world understands innovation: it's what we do every day. Finding effective ways to cost-effectively attract the attention of shoppers that leads to purchase requires new thinking, new materials, new techniques and new insights on every project. As marketing-at-retail professionals, we embody innovation - or we are out of business.

Made in America

At Tusco Display, we're proud to design, engineer and produce world-class point-of-purchase displays and custom store fixtures. Making stuff is what we do.

And we're not alone. As the National Association of Manufacturers proclaims, the United States remains the world's largest manufacturing economy, producing 21 percent of the global manufactured goods. According to the US Census population clock, there are approximately 309 million Americans among a world population of 6.812 billion people. In other words, we're 4.5% of the population producing 21% of everything. Even after the battering recession, nearly 12 million Americans work directly in manufacturing - about ten percent of the overall workforce.

Making stuff in China or Mexico or Vietnam has its place, too. But when it comes to nimble production of high-value products, minimizing transportation costs (time, money and carbon) and keeping inventory costs low, its tough to beat manufacturers in your backyard.

We're going to keep efficiently, reliably and intelligently manufacturing here in bucolic Gnadenhutten. Making stuff is what we do - well.