Why STEM Is Vital to Creating Engineers of the Future

From LEGO’s latest creations to National Engineering Week, it seems STEM education and the future of U.S. manufacturing is a big topic of discussion. Because we work on a regular basis with engineers, we understand the importance of these professionals and their role in the future, so we wanted to share our thoughts on the importance of STEM initiatives.

Science, technology, engineering, and mathematics are core principles in manufacturing, and engineering is the backbone of the whole product cycle. If America is going to continue to be strong in manufacturing, the process begins by getting younger people interested in these types of backgrounds.

In our business, the interaction with engineers begins when a customer requests a specific product or service, and once that customer communicates their need, it’s the engineer that has to take that concept and put it on a print that describes what is ultimately to be manufactured.

Companies we interact with that have engineers that are not only creative but are flexible in their thinking and have a clear understanding of the big picture are those that tend  to be the most successful. Engineers help form the backbone of a dynamic company and industry, and we need to promote a strong belief in STEM education to ensure a successful future growth pattern.

Before you head over to our website to learn more about our business, check out the video below on the value of investing in STEM education:

How EDI, Automatic Payments Are Helping Manufacturing

How EDI, Automatic Payments Are Helping Manufacturing

In our last blog, we discussed how we’ve noticed an uptick in the agricultural industry, and while that’s true, we also want to discuss another in processing orders and payment for goods and services we’ve seen: the integration of technology like electronic data interchange.

Through various mechanisms, we supply products for production and/or the aftermarket for our customers, and computer software has evolved to the point where some of our customers have converted to an automatic payment system—saving time and expense along the way.

Now, the day we ship a product, we head to a portal; upload the information about the shipment that we’re making and that information gets uploaded to the customers’ server. This aggregates information and triggers a system, where once the shipment is received and the barcode scanned is in, the transaction creates and internal invoice and subsequent payment through the banking system. At the end of the process, we get a wire transfer to our account or a paper check.

This streamlined process eliminates the action of mailing an invoice on our end. In some cases, our input of the shipment information triggers scheduled truck pick up. On the customer side, they realize savings due to a reduction of errors, a shortened cycle time and labor. Our customers are now converting their logistics management function to increased automation. EDI might eventually control the most—if not all—of the process from start to finish.

How is the Agricultural Industry Growing?

One Google search for “agricultural industry” aggregates thousands of results. Some links relay users to different organizations while others try to define it as a whole. If you click on the “news” section of this search, you’re bound to bring up dozens of conflicting reports on how the industry is doing. It seems no one can agree on the current state (or future) of agriculture, but at Production Materials, part of our business revolves around supplying parts for this industry, so we can confidently say we’ve noticed an uptick in a few areas: aftermarket, consolidation, and parts rationalization.

               

The agricultural industry in the United States functions as an intricately weaved web. Take, for example, a family-owned farm, which in many cases, simply cannot shell out thousands of dollars for a new tractor if it breaks down—especially when fixing the machinery might be a more viable solution, including the ordering of small parts from a local dealer. Since Production Materials is part of the supply chain for repair depots, we’ve been able to track an increase in the parts resale aftermarket.

As the industry changes to accommodate shifts in demand and technology, the number of manufacturers actually is getting smaller through consolidation. However, in the past four years, the number of “Big” North American farm equipment dealers has grown from 151 to 184, according to Ag Equipment Intelligence. While some might worry about consolidation of the manufacturing base growth, downstream, in the supply chain, has improved distribution efficiency.

Much like consolidation, parts rationalization aims to lower costs by eliminative redundant parts and operations. In this instance, we’ve worked with engineers to restrategize and standardize parts, which means instead of purchasing three similar components, one common part may fulfill the need. This allows companies to purchase large orders of one part to take advantage of price/quantity breaks.

Want more information on how we may be able to assist with your particular needs? Please check out our website or request more information here.

Why American Made Means Something Again

For decades, outsourcing has stripped the U.S. of its once-proud manufacturing tradition, eventually getting to the point that “Made in America” became synonymous with higher labor costs and declining quality. Yet, recently, it seems hope began replace despair—American manufacturing finds itself in the middle of a renewal in both perception and reality. 

As with all economic trends, no one simple reason can lay claim for the resurgence of American manufacturing; however, two major reasons do standout in turning around decades of decay:

Quality

There is no better place to start than with product and service quality. Once again, people and companies around the globe recognize that American-made goods are of higher quality due to both our technology regulations and workforce. As incomes have grown across the globe—a perfect example being the tripling of China’s disposable income per capita since 2004—there has been a rise in the demand for higher quality goods. If you combine this with sometimes poorly made products and unsafe work conditions and total landed costs for overseas goods, you can see why there is a greater push for American-made products.

Costs

It would be naïve to think that the rebound in American manufacturing is simply a case of patriotism. Business is business, and profits are still king. A recent study from the consulting firm AlixPartners estimates that the cost of manufacturing in the U.S. will gain parity with those of outsourcing to China. When and if this does take place, the argument that it is cheaper to offshore will no longer be valid, thus boosting American manufacturing even more.

At Production Materials, we are excited about the return of manufacturing to America. We’ve specifically noticed evidence of companies not wanting to carry a lot of inventory, which means bulk shipping from overseas isn’t in their best interest; therefore, the cost can be offset by going to a local company, giving a boost to the American-made industry.

There is little question that the U.S. (and especially our home state of Illinois) has seen some rough times when it comes to manufacturing jobs, yet we are hoping that as the world’s demand for higher quality products rises and the cost of off-shoring equal out, our country can regain its role as a manufacturing leader. 

Resourceful Organization, Parts Rationalization is an Important Part of Manufacturing

As manufacturing transitions its way into a new age, an adjustment period is necessary. Those who have been in business for decades—much like Production Materials—are working on perfecting automation systems and keeping up with the latest trends. But for many businesses, re-evaluating the present is equally as important as looking forward, which is why parts rationalization is critical in the manufacturing industry.

It unstable economic times, especially, it’s often feasible to simplify purchasing inventory and production by looking for part commonality and consolidation. As part of our quotation process, we evaluate our customers’ specifications and offer a “standard” lower cost alternative. We also look through the customers’ portfolio of parts we sell them and make recommendations for possible consolidation.

Going a step further, we’ve noticed an increase of manufacturers aiming to create one solid templated product to embrace. Instead of creating hundreds of individual pieces and parts for a machine, one uniform product can fit all. This means one part can do the job of three separate components, and companies can order these in bulk rather than ordering the bits and pieces when needed.

It’s clear manufacturers are becoming more resourceful with their purchasing, and we’re happy to help out. For more information on our components, contract packaging and secondary operations, head over to our website. 

Production Materials Celebrates U.S. Manufacturing in October and November

October is Manufacturing Month in the United States.  The designation is an opportunity for manufacturing companies to showcase their ties to local communities and how the jobs and products that they create are a value-add to the economy of their neighborhoods, states, and the country as a whole.

Then in November, the American Made Matters, organization will be celebrating and focusing attention on American Made products and services.  AMM, is an organization dedicated to educating consumers on the importance of buying American-made products.

The group has declared November 19, 2013, the first annual American Made Matters® Day. The organization hopes that on that day, U.S. consumers will be encouraged to buy at least one American-made product to show their support for American manufacturing.

According to the National Association of Manufacturers, “In 2012, manufacturers contributed $1.87 trillion to the economy, up from $1.73 trillion in 2011. This was 11.9 percent of GDP. For every $1.00 spent in manufacturing, another $1.48 is added to the economy, the highest multiplier effect of any economic sector.”

NAM also states that, “Manufacturing supports an estimated 17.2 million jobs in the United States—about one in six private-sector jobs. Nearly 12 million Americans (or 9 percent of the workforce) are employed directly in manufacturing.”

In 2011, the average manufacturing worker in the United States earned $77,060 annually, including pay and benefits. The average worker in all industries earned $60,168.3.”

AMM has reported that “the Federal Trade Commission mandates that, in order to label a good as made in the U.S., all significant parts and processing that go into the product must be of U.S. origin. Additionally, the law requires that U.S. content must be disclosed on automobiles and textile, wool, and fur products.”

AMM has two criteria for member organizations to use its label on products:

•    50% of the product’s cost (labor, materials and overhead) must be incurred in the U.S.; and
• Final assembly or transformation must take place in the U.S. 

Production Materials is proud to be associated with the American Made Matters® organization.  Many of the products we sell are made in the state of Illinois and are integral to other American products to perform the work and tasks necessary to keep the economy moving forward.  One of our main sectors that we service is agriculture, which is also critical to a strong America.  Join us in October to salute American manufacturing and then in November by buying American made products. Let’s all do our part to keep our country strong!

The Outdoor Power Equipment Market Is Growing

Warm weather is the time for trimming hedges, cutting the grass, and pulling the weeds at home, but here at Production Materials, we’re thinking about outdoor power tools at the manufacturing and service parts level.

As providers of component solutions for this industry, we have a first-hand look at customers’ forecast, so we can see trends. The continued demand for lawn and garden equipment is evident—along with steady growth in the replacement parts segment as well.

In the next five years, the U.S. demand for this equipment is expected to rise an annual 4 percent, which could add up to $10.6 billion. After tracking a slight decline in demand from 2007 to 2012, we are encouraged to see these projected numbers.

As the economy and GDP accelerate, consumers will spend more money on upgrading older equipment. Increased recreational activities requires the upkeep of greens and fairways as well as parks and resorts, which means groundskeepers need state-of-the-art equipment to maintain these venues.

As the industry continues to evolve with more innovation in the equipment’s technology, we at Production Materials will be there to provide many of the components and the subsequent benefits for consumers and our customers.