MFGx Blog : August 2008

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The Chinese government has raised the value added tax (VAT) rebates given to manufacturers of some textiles and garments. It's been reported (see here and here) that the rise is meant to ease cost pressures on China's textile producers slapped with rising costs. The move is minimal (from 11% to 13%) and isn't seen as a trend to reverse the drastic rebate cuts of the past year.


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The rebates for some products, including zinc, silver and batteries (seen as highly polluting), were scrapped entirely.

The 2% increase for textiles is half of the 4% requested by China's textile and garment manufacturers.

My sources on the ground in Shanghai confirm that the recent rebates have been met with little attention, compared with the sweeping cuts of last year that that sent shock waves throughout all global manufacturing supply chains.

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Open Source Everything, Indeed

Posted by aj Aug 28, 2008

Here at MFGx, we've been living large on Open Source. From post after post in our forums, to a special community assigned to the MFG.com Open Source Machine Tool project, we're big believers in the power of crowdsourcing.

But even our Open Source exuberance is challenged by this:


Wanna build your own Subatomic Super Collider?


That's right - according to this tongue-in-cheek play on the Open Source model, you can build your own Hadron Collider. All you'll need to build it is "... €6-billion, enough real estate to hold your 17-mile-long ring, a staff of international geniuses, and ..." downloadable plans from the Institute of Physics in London.


But wait - is this really Open Source, or is it €6-billion freeware?

Hat tip: Jonah.

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Clavardon (www.clavardon.com) is an online tool that allows you to invite others to co-browse any Web site with you and chat live with everyone in the process. As you surf a site, others can see what you're looking at, what you're pointing at and any text or item you want to highlight.

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According to Clavardon, the utility was created to help e-commerce businesses and sales staffs to demo their sites to prospects. It certainly does that.


But SMB manufacturers can use it to their advantage as well. For example:


  • Review your own Web site with offsite resources to develop or refine.
  • Review and collaborate on any item - drawings, plans, or projects - that you've uploaded to the Web beforehand.
  • Review documentation and information with customers or prospects.

Clavardon is free for up to 100 sessions per month, and requires no setup or registration.

One downside that I noticed is that the chat window is pretty large, which limits the size of the window that displays the site being shared.


But for the convenience and usability, this is a hard utility to beat - especially for the cost.

Hat Tip: Robin Good

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Over at All Roads Lead To China, Richard has hit upon something that many bloggists and press pukes overlook with striking regularity: just because China's fortunes as an outsourcing darling are shifting/slipping/adjusting doesn't mean you can paint everything/one with the same brush.

His post titled Is China No Longer Competitive? breaks down the broad view often presented by the Western press: that Chinese products are only of poor quality; that fluctuating currencies, rising fuel and labor costs signal the end of China's dominance as a manufacturing giant; and that these shifts mean the same things to all companies/business models outsourcing to China.

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The fact is, as Richard rightly points out, it's much more complicated than that. A macro view doesn't adequately offer the micro solutions that are called for. He asks that companies assess their positions by answering these 6 questions:

  1. What is your China platform?
  2. Where is your market?
  3. Where are your competitors?
  4. Where are your suppliers?
  5. Is your product high tech, or high labor?
  6. Were you previously compliment (with new Chinese labor laws)?

Boiled down to its most lucid point, Richard's premise is that the complexities of each company's supply chain dictates its vulnerability to fluctuating macro conditions. Reacting to the same conditions in the same ways could spell big trouble for companies that don't plan and navigate their own path through the shifting outsourcing waters.


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Manufacturing As Art And Inspiration

Posted by aj Aug 19, 2008

The more you try to shave the cat, the more the thing will bite and scratch. I think it's best to leave its fur, and listen to its silky pur. Some people try to make life a little tougher than it is. - Cake
Christopher Conte is the poster child for spreading the manufacturing gospel to the masses. He is to manufacturing hipness what Jerry Lewis is to MD, or what Jerry Lee Lewis is to rock: a potentially timeless, iconic figure that represents a vibe around which an audience can grab inspiration and act.

Christopher Conte is an artist with STRONG manufacturing chops. And he's a bad manufacturing cat daddy with STRONG artistic sensibilities. Born in Europe and migrated to the U.S. as a boy, he found these talents in himself early on and began a brilliant journey that led him to a wonderful place. He creates art, and he builds artificial limbs. The yin and the yang.


You can see the fruits of his "artgineering" pedigree at The Work & Sculpture of Christopher Conte.


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It seems to me that Christopher's story and what he does offers something special that we shouldn't overlook. We've tried hard in the past to express that manufacturing in the 21st century is advanced, highly technical, rewarding, satisfying and modern. But we've sucked at it. Sites like Manufacturing Is Cool were launched with the best of intentions. They've tried desperately to convey those positives about manufacturing to a generation that doesn't believe it - and that's noble. But those efforts look tired and hackneyed. They look like your dad wearing a Slipknot t-shirt and telling you to eat your peas because they're good for you. Somehow - while their motives are pure - you just can't take them seriously.


Christopher Conte is what we should use as an example of modern manufacturing mojo and its vast potential. Manufacturing isn't just about making chips or welding anymore. Manufacturing is - because of the vast availability of inexpensive technology and communications channels - a blend of technology, business and expression. It doesn't - and shouldn't - have to carry the old, tired stigma.


You can't make someone see something they don't want to - they have to get it themselves, and on their own terms. The Christopher Contes of this world create a sphere of influence far more powerful than any other message we can come up with on our own. He's the ideal - perfectly expressed, and manifested in real life:


Manufacturing can, indeed, be cool.

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Over at MFG.com, they've completed the build phase for their version of a fully functional, industrial-grade CNC vertical machining center. The machine tool will be used as the initial prototype for presentation to the global machining and manufacturing communities. Recent progress includes:

  • New videos that document the full project through build completion.
  • An online description of progress made toward developing the online portalthe machining center's files, plans and drawings will be offered through.
  • Photographs chronicling the early design and build phase of the MFG.com Open Source machine tool.

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New Online Forum For Machinists

Posted by aj Aug 15, 2008

American Machinist magazine's Web site has just launched a new collection of forums. Titles of the new forums include Machine Shop Management, Machining and Shop operations. The new forums were launched this week, after a long relationship between AM and Practical Machinist forums.

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Training Pays Off For Manufacturer

Posted by aj Aug 13, 2008

"Business growth isn't random."

That's one of my favorite quotes, from manufacturing pundit overall bad cat-daddy Doug Hall. He was quoted this past March addressing a group of manufacturers in Rockford, Illinois - considered by many the cradle of the machine tool business in the U.S.

I was reminded of that quote when I read "Manufacturer Finds Certification Pays Off" from the Olympian. This story documents the investment in training personnel made by Wisconsin-based manufacturer Federal Tool & Engineering. So, what's the story in that?

Federal won work worth $1.5-million (US) directly due to its commitment to training.

What clinched the recent deal ... was that the customer could have confidence that Federal Tool has at least six employees certified by the American Welding Society to aptly weld a variety of materials of various thicknesses. "Anybody can buy the equipment," says Federal's owner. "We're willing to invest in the people and develop the training."
And what really caught my eye was where Federal is based.

Wisconsin.

It's a familiar theme for manufacturing SMBs in the U.S. Wisconsin just seems to "get it" in regards to growing and protecting its manufacturing base - at least, more than most other states.

"In many ways, Wisconsin is the leading state," Leo Reddy, chief executive officer of the Virginia-based Manufacturing Skills Standards Council, said before a recognition ceremony last month at Federal Tool. Reddy cited Gov. Jim Doyle's commitment to have 40 percent of Wisconsin's manufacturing work force complete at least one component of the certification by 2016. Thanks in part to state grants to technical colleges and workforce development boards, Wisconsin also has one of the best systems for assessing worker skills and providing standardized training, Reddy said.
But one thing that Wisconsin has in common with many other states is something not to be so proud of:

None of the four employees receiving their certificates for manufacturing skills training had received any such schooling before they began factory work. All agreed that what they learned is essential knowledge for manufacturing workers now.

As with most states, "essential training" isn't readily available. What a shame. Add to that the fact that the Federal employees who were certified represented the training they received as high-end in important categories - process/production, puality, computers, communications, math and science, to name a few.

Hmmmmm. Maybe training your people can pay off.

Go figure.

HAT TIP: Kid Rock

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Pickens Plan Good For Manufacturing?

Posted by aj Aug 12, 2008


Have you heard of T. Boone Pickens' plan? Pickens, the successful U.S.-based investor, has proposed a plan to influence the incoming presidential administration to wean the U.S. off of foreign oil by migrating to wind power for electricity and natural gas for automobiles.


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Building new wind generation facilities and better utilizing our natural gas resources can replace more than one-third of our foreign oil imports in 10 years.
The plan is, in a word, perfect. It's clearly enunciated, easy to understand, the right thing to do, and - what really caught my eye - a potential boon to manufacturing. From the Pickens Plan site:

Developing wind power is an investment in rural America.
To witness the economic promise of wind energy, look no further than Sweetwater, Texas.
Sweetwater was typical of many small towns in middle-America. With a shortage of good jobs, the youth of Sweetwater were leaving in search of greater opportunities. And the town's population dropped from 12,000 to under 10,000.
When a large wind power facility was built outside of town, Sweetwater experienced a revival. New economic opportunity brought the town back to life and the population has grown back up to 12,000.
In the Texas panhandle, just north of Sweetwater, is the town of Pampa, where T. Boone Pickens' Mesa Power is currently building the largest wind farm in the world.
In addition to creating new construction and maintenance jobs, thousands of Americans will be employed to manufacture the turbines and blades. These are high skill jobs that pay on a scale comparable to aerospace jobs.
Plus, wind turbines don't interfere with farming and grazing, so they don't threaten food production or existing local economies.
Now, to be sure, there's enough hot air coming out of Washington these days about what we should or could do to solve the energy dilemma. An election year makes it all the more depressing. Especially when we all know how serious this problem is to us all.

But the value to manufacturing makes this a slam-dunk, and worthy of our attention.

Visit Pickens' site. Regardless of what country you call home, this plan represents an acceptable solution for us all.

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Who Has It As Bad As We Do?

Posted by aj Aug 1, 2008

I recently had the great privilege of visit from my friend James, who came in from his home in Shanghai. James is one of the smartest, funniest, most dignified people I know.

As we were catching up, talk turned to the upcoming Olympics. I asked James if the steps taken by the Chinese government to reduce pollution have had any noticeable affect.

His response:

"Oh, yes! For the past few weeks, the air in Shanghai has been as clear and clean as Los Angeles. It has been beautiful."

Now certainly, we have a lot of work in the U.S. to get our house in order – fiscally, governmentally, and environmentally.

But isn't this the right perspective? We complain about much in this country, but overlook the fact that others might like to have it as bad as we do.

At least in some respects.

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