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Precision
manufacturing: It's not just heavy metal anymore
Maine Science and Technology Foundation
September 24, 2002
RUMFORD, Maine – "I've always worked in one way or another
with machinery and equipment," said Norm MacIntyre,
the newly appointed director for the River Valley Technical
Center (RVTC).
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From
Assessing Maine's Technology Clusters
June
2002, Maine Science and Technology Foundation
"Precision
manufacturing was defined by the Maine legislature
as a target area for research and development
support. Lawmakers did not specify the industries
to be included, but in practice the sector has
come to encompass firms in the following industries:
- "Fabricated
metal parts and industrial machinery and equipment
manufacturers that make a wide range of parts
and equipment for different industries
- "Designers
and manufacturers of electronic equipment, including
silicon chips and computer and communication
equipment
- "Manufacturers
of instruments and related products, which may
include electronics, sensors or other precision
instrumentation."
The
cluster report says "little unites or could unite
the disparate firms in this group, save their
role as manufacturers. To facilitate analysis
of cluster relationships, we believe that electronics
and communication equipment should be joined with
software firms, and that firms generally categorized
as metal fabricating industries should be examined
under the heading of precision manufacturing."
"Fabricated
metal and industrial equipment manufacturers provide
component parts and equipment to dozens of other
manufacturing industries, ranging from aerospace
and defense to automotive, electronics, and telecommunications.
They are primary involved in the manufacture of
intermediate goods rather than consumer goods.
"Major
employers in Maine include Pratt & Whitney, Lemforder,
General Dynamics Armament Systems Saco Operation,
General Electric, and Bath Iron Works, as well
as numerous smaller companies such as Rich Tool
& Die and Maine Machine Products that provide
goods to regional and national customers. At the
other end of the scale, there are a large number
of smaller companies making a variety of machined
products, primarily for customers in Maine. Amongst
these firms, there is a strong set of customer/supplier
(vertical) relationships. Dielectrics, one of
the larger electronics firms, reports using as
many as 75 machine shops in Maine to make parts
for its products. BIW and the forest products
industry are also major markets for small machine
shops."
The
report quotes Maine Department of Labor statistics
count about 350 precision manufacturing companies
employing 8,300 people.
"The
outlook for smaller companies depends on their
ability to develop technical expertise needed
by their clients and manufacture products at lower
cost or on tight schedules. The expertise required
may be in the form of advanced fabrication techniques
or automated equipment that reduces labor input.
Company size also matters, as very small firms
lack the resources to purchase expensive labor-saving
equipment or aggressively seek new work when existing
contracts are terminated."
The
report also concludes that many of the small metal
parts shops in the state are family-run and have
"good management, tight cost controls, and a policy
of investing in new automated equipment.... Smaller
firms with local markets may be less affected
by competition from overseas manufacturers."
"Demand
for skilled machinists has outstripped supply,
despite the presence of training programs at several
state technical colleges… Skill requirements have
also increased as computerization and automation
play a larger role in production."
"In
summer 2000, [the Maine Metal Products Association]
conducted an industry survey that revealed 1,500
skilled jobs in Maine were not filled because
there were no qualified workers available."
"Firms
in Eastern Europe compete with Maine's fabricated
metals industry, while firms throughout Europe,
North America, and Asia compete in electronics.
Maine's tradition in manufacturing, particularly
its pool of skilled labor and management, provides
a key locational advantage for many of these companies,
but growth of skilled labor forces in Eastern
Europe and the Pacific Rim pose challenges in
these highly competitive industries."
Assessing
Maine's Technology Clusters
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RVTC
was founded to provide resources to Maine's precision
manufacturing industry, with a focus on metal parts
producers, so MacIntyre's manufacturing experience should
serve him well when he begins his new job in Rumford
on September 30, 2002.
Precision
manufacturers fabricate metal parts (and molds to form
plastic parts) for computers and household devices,
medical equipment, cars, airplanes, and other machinery.
RVTC already conducts training courses and plans to
expand its programs to offer more business incubator
services, including office space and management training,
to develop entrepreneurship and encourage product commercialization.
RVTC
is a component of the Applied Technology Development
Center (ATDC) system created by the Maine State Legislature
to support the state's seven targeted technology sectors.
Maine's Department of Economic and Community Development
administers the ATDC program.
MacIntyre's
Background
Although
MacIntyre's manufacturing career veered briefly toward
fish – he's currently finishing work as general manager
of the Portland Fish Exchange – he received an engineering
degree from the U.S. Naval Academy and, in his most
recent precision manufacturing job, spent three years
as vice president and chief operating officer at Rich
Tool & Die Company in Scarborough.
Phil
Helgerson, director of Maine's ATDC system, is pleased
to see MacIntyre and his 30 years of manufacturing experience
join RVTC. "It's very helpful at these ATDCs for the
director in charge to be connected with the industry
sector and to have an understanding and awareness of
the challenges" that face startup companies and entrepreneurs,
said Helgerson.
Lisa
Martin, executive director of the Maine Metal Products
Association (MMPA), also praised MacIntyre's contacts
and business knowledge, adding "people like and respect
him. He's an excellent candidate for selection."
MacIntyre's
career has taken him to diverse employers, including
the National Center for Manufacturing Sciences, where
he managed the manufacturing technology laboratory program.
And, lest the Fish Exchange stint appear unrelated to
his new appointment, MacIntyre said his waterfront work
included regular interaction with state agencies. "That
streak runs fairly deep and fairly long," he said, since
he began in government relations during his decade (1979-1988)
at Caterpillar Solar Turbines. MacIntyre is also a Maine
Technology Institute board member and active in MMPA.
Initial
Challenges & Programs
MacIntyre
said managing rehab of a brick building donated by Mead
Paper will become his first – and most obvious – challenge
at RVTC.
Joe
Derouche, RVTC's interim director, said MacIntyre should
have an office at the Mead building this fall, but the
old five-story brick building probably won't be ready
for full occupancy by incubator tenants until 2004.
"This place is going to be so unique," said Derouche,
outlining plans to house offices of the River Valley
Growth Council, MMPA, the Small Business Administration,
and other organizations that will bring "one-stop shopping"
to precision manufacturers.
Training
workers in basic skills – such as operation of computer
numerical control (CNC) milling machines – for precision
manufacturing, is one RVTC short-term goal. "That's
the exciting part that's already started," said Derouche.
A metal trades certificate program began in January
2002 at Central Maine Technical College with assistance
from Region 9 and $800,000 granted through the Workplace
Investment Act.
A
2000 MMPA survey showed 1,500 precision manufacturing
job vacancies in Maine, though with economic changes,
nobody's sure exactly how many openings remain, said
Martin. MMPA has around 200 member companies, roughly
half the classified metal companies in the state, according
to Martin.
Martin
is pleased to see training at RVTC because "we need
to attract workers into this industry." She said companies
need skilled people, with a minimum of a two-year technical
education, to operate high-tech machines in a team atmosphere.
Many companies cover education costs and MMPA offers
scholarships, but Martin said precision manufacturing
suffers from an image problem.
Precision
manufacturing has gone high-tech and offers well-paying
jobs with advancement potential, but many people still
consider manufacturing dark and dingy, said Martin,
even though "there's a lot of money to be made in this
industry." MacIntyre has also seen the public relations
problems precision manufacturing faces. He said a group
of teachers visiting Rich Tool & Die declared they wanted
their students to work with computers, not in factories.
But Rich uses computers to design parts and control
manufacturing machines, creating a more technical atmosphere
than most visitors expect.
The
RVTC training program already teaches over 20 students;
another group will begin in late December. Derouche
said he hopes to expand the current three-year WIA grant
to accommodate displaced workers from other Maine counties.
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Maine
Applied Technology Development Center System
Background
Information
A
program of Maine's Department of Economic and
Community Development (DECD)
Targeted
technologies are: biotechnology, aquaculture and
marine technology, composite materials technology,
environmental technology, advanced technologies
for forestry and agriculture, information technology,
and precision manufacturing technology.
Policies
and procedures governing the Maine Applied Technology
Development Centers
For
contact information for all Maine's ATDCs,
visit the Maine DECD Web site.
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Derouche
expects training courses to relocate to the Mead building
by April 2003; he is already cultivating contacts and
connections to obtain equipment for clients to use during
training courses and, later, as startup tenant companies
resident at RVTC. "That's our hope, our dream, our vision,"
said Derouche, citing a study that showed 87 percent
of incubator graduates remain in their local economies.
The
River Valley Area & Precision Manufacturing
"The
enthusiasm is just wild" for RVTC, said MacIntyre, because
the Rumford-Mexico area hopes to train workers and attract
new jobs. Although he said the Androscoggin River Valley
lacks a precision manufacturing base – the paper industry
has dominated local industry for decades – MacIntyre
sees a strong "local desire for more tech-focused jobs,
which is a really good idea."
Wick
Johnson, president of Kennebec Tool & Die and Maine's
Small Business Person of the year for 2002, also believes
the incubator will profit western Maine. "Historically,
Maine's economy has benefited from small manufacturing
companies," he said, noting that he sees clusters of
small businesses around the state whose leaders actively
participate in local business communities, thus driving
local economies.
Since
RVTC also serves state interests, which encompass developing
precision manufacturing throughout Maine, MacIntyre
will balance state and local needs. MacIntyre said the
Maine Science & Technology Foundation's report, "Assessing
Maine's Technology Clusters," (see sidebar) which details
strengths and weaknesses of precision manufacturing
in Maine, will serve as a starting point as he develops
strategies for the RVTC.
Maine's
precision manufacturers continue to be "a strong group
of companies which offer very high-quality jobs," said
Johnson. Openings fluctuate with cyclical economic changes,
but Johnson said the industry adapts. Kennebec, for
example, is more diversified than ever, selling products
to commercial and defense aerospace companies plus a
variety of technology companies, including manufacturers
of capital equipment.
Johnson
underscored his optimism about the industry by noting
that Kennebec, since December 2001, has been working
under its most aggressive budgets ever for purchase
of capital equipment and internal training, so the company
can increase processing efficiency and capabilities.
Kennebec is also involved in a lean manufacturing initiative,
with support from a Governor's Training Initiative grant
and the Maine Manufacturing Extension Program.
World
Class Manufacturing & the Importance of Precision
MacIntyre
said the incubator portion of the RVTC program will
establish a friendly place for small businesses to develop
with minimal worries. Although "filling the building
is highly desirable, the incubator needs to be more
than that," said MacIntyre, if it is to provide value
to startup and established precision manufacturing companies.
Precision
manufacturing covers more than just operating high-tech
machines, said MacIntyre. He places great importance
on new techniques – demand flow manufacturing, lean
manufacturing, six sigma, and other world class manufacturing
methods – that didn't exist in the United States when
he began his manufacturing career.
Efficient
manufacturing processes improve product quality and
eliminate waste in facilities. Although MacIntyre said
a company of two employees wouldn't need six sigma to
analyze operational performance and manufacturing defects,
a company of 25 probably would. New quality standards
also mean companies take greater care with designs;
robust design, said MacIntyre, is "relatively immune
to variations in the components that make it up."
Beyond
design, quality components must be manufactured with
robust processes, too, to reduce variation so each part
can be assembled into a functional device. Precision
manufacturing earned its name for a reason, said Martin:
"you can't make a mistake."
MacIntyre
said Rich Tool & Die designs parts on computers connected
with General Electric, a key customer. "The technology
is rampant," he said, enabling engineers to maintain
repeatability and make tool paths without using paper.
Collaborations
& Goals of the ATDC System
One
way that MacIntyre plans to build Center capabilities
and serve clients is through cooperation with, among
others, the River Valley Growth Council, MMPA, UMaine
and its new Advanced Manufacturing Center, the University
of Southern Maine, Maine's technical college system,
and the Maine International Trade Center. MacIntyre
also expects frequent contact with the Maine Manufacturing
Extension Program and the Maine Technology Institute.
As
a staff of one, said MacIntyre, "collaborations are
extremely important." He said UMaine's new Advanced
Manufacturing Center, with its mission of supporting
precision manufacturing, makes "an obvious marriage"
for RVTC.
Helgerson
said many of RVTC's collaborators participate in Maine's
ATDC network because the incubators "all call for lots
of creativity in response to needs of entrepreneurs
as [needs are] recognized." Helgerson hopes to see the
centers become "real hubs of activity…the front porches"
for their technical sectors as each industry shares
ideas, solves emerging problems, identifies partnerships,
and develops entrepreneurship. The ATDCs are "building
aspirations for these firms," he said.
Martin
called the RVTC "one of the more excellent" initiatives
to come out of the Maine legislature. As an advocate
for thousands of workers, Martin said she always likes
to see the legislature support the business community
and ensure jobs in an industry she describes as "huge"
and "cool," though she knows many people drive past
precision manufacturing facilities having no idea what
goes on inside.
In
the final analysis, said MacIntyre, buyers will come
to Maine for parts "only if they're better," and not
necessarily cheaper. Maine's "work ethic is unsurpassed
by any state, I'm sure," believes MacIntyre, whose work
has carried him to California, the Midwest, and throughout
New England.
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