"Innovation Week" in San Diego started October 3rd, after the weekend Maker Faire, about which I previously wrote. There were 55 tours or events scheduled during the week, the most of any region in California and perhaps the most in any region of the U. S. All of the events were free, except for the MFG DAY breakfast on October 7th.
On Monday, October, 3rd, I was unable to attend the Manufacturing Expo at San Diego City College hosted in partnership with the Center for Applied Competitive Technologies, Southwestern College, San Diego Contracting Opportunities Center, and the California Board of Equalization. This event gave students an opportunity to tour San Diego City College's manufacturing training facilities, meet with industry leaders, and learn about career opportunities in manufacturing. From 12:00-2:00 pm, San Diego manufacturers were invited to the resource fair portion of the event where they heard from agencies about tax credits, procurement technical assistance, workforce training, and other programs that can help them succeed in San Diego. This event was open to all high school and college students, as well as all San Diego manufacturers.
On Tuesday, October 4th, I attended a similar Manufacturing Expo and Resource Fair hosted by the East County Economic Development Council from 3:00 – 6:00 pm at the San Diego Air & Space Museum Annex at Gillespie Field in El Cajon (15 miles east of the City of San Diego)
I sat in on a short presentation by the Board of Equalization of the Partial Sales Tax Exemption for Manufacturers and picked up information from some of the many resource booths at the Resource section of the Expo. Some of the manufacturers participating in the Expo were using the opportunity to promote careers at their company and solicit skill workers. I had no idea that the Air & Space Museum Annex had so many airplanes on display ─ it even had the Atlas missile that used to be on display at the General Dynamics Aeronautical Systems facility that closed in 1993.
On Wednesday, October 5th, I attended the Tech San Diego Operations Roundtable workshop on "Hiring the Right People" held from 7:30-9:30 am, hosted by Coleman University. Talent Acquisition and Human Resources Management continues to remain a challenge for many companies. I have been on the planning committee for these workshops for ten years. Tech San Diego presents ten workshops per year and many topics are related to practicing Lean.
On Wednesday evening from 6:00-7:30 pm, I gave my presentation on "How to Return Manufacturing to America using Total Cost of Ownership Analysis" at the San Diego chapter (#44) of SME. Everyone was amazed at how many companies have returned manufacturing to California from Asia, China in particular. From my choice of 300 cases provided me by Harry Moser of the Reshoring Initiative, I only shared stories of companies that had returned manufacturing to California. I commented that "if you can bring manufacturing back to California, Michigan, and New York, you can bring it back to anywhere else in the U.S."
On Thursday, October 6th, I attended the resource fair and tour of the Technology Career Institute at MiraCosta College in Carlsbad (20 miles north of the City of San Diego) from 5:00-7:00 pm. I enjoyed the networking social with free appetizers and beer and wine for those that drink. There was an opportunity drawing for $1 per ticket, but I didn't win any of nice donated gifts. I think Tony Knott of the Board of Equalization gave his third presentation of the week on the Partial Sales Tax Exemption for Manufacturers.
Finally, on Friday, October 7th, I attended the Manufacturing Day Expo/Presentation 2016, hosted by the San Diego Regional Economic Development Corporation at Liberty Station in San Diego, from 8:30 – 10:00 am. The event was underwritten by Samsung and sponsored by Arthur J. Galagher & Co., Center for Applied Competitive Technologies, CMTC, Eastridge, Hunter Industries, Manpower, Southwest, and Wells Fargo.
Mark Cafferty, President and CEO of the San Diego Regional EDC welcomed the over 300 attendees and thanked the above sponsors. He introduced the elected officials present: Diane Harkey, California Board of Equalization Vice Chair, Assemblymember Brian Jones, San Diego City Council President Sherry Lightner, and Councilmember Myrtle Cole.
Cafferty commented that we have largest Manufacturing Day in the state and the only bi-national day in country with the tour to Samsung in Tijuana, Baja California Mexico scheduled for that afternoon. He said, "The first Manufacturing Day four years ago had 10 manufacturers and 60 participants, and this 4th Manufacturing Day has 60 manufacturers and 1,000 participants.
Andrew Oram of the Arthur J. Gallagher & Co. spoke very briefly about the California Small Manufacturers Trust for insurance that just started in 2015 and offers significant savings for the cost of insurance for small manufacturers. Find out more here.
Board of Equalization Vice Chair Diane Harkey said that her district represents 25% of California and 265,000 businesses. The California BOE is only elected tax board in U.S. She mentioned the Partial sales tax exemption for manufacturers that saves paying the state portion of sales taxes = 4.125%. She also mentioned the Cal Competes grants and that her office helped companies receive $7 million in grants. She said, "Southern California is the engine of California's growth." She concluded by inviting everyone to attend the "Connecting women to power" event her office is sponsoring on November 3, 2016 to be held in Escondido.
Next, Council President Sherry Lightner & Councilmember Myrtle Cole read the last two lines of a proclamation declaring October 7th Manufacturing Day in San Diego. Councilmember Cole said, "San Diego is recognized as a leader in technology, and it has a high export ratio."
Cafferty then introduced Trudy Gerald as the moderator of the manufacturing panel. She is Dean of School of Arts, Humanities, Communications & Telecommunications and Director of the CACT at San Diego City College. The panelists were: Sergio Alvarez, CEO Chuao Chocolatier, Mark Liuag, Director of Operations, Calbiotech, Michael Milam, COO, Dr. Bronner's, and Robert Westfall, Jr. President, Solatube International, Inc.
Dean Gerald's first question was: Why did your company choose San Diego and why do you stay?
Alvarez responded that the two founders of Chuao went to UCSD and wanted to stay in San Diego. They even bought their own building last year in Carlsbad and are trying to source more locally.
Milam said that said Dr. Brunner came to San Diego to visit and wanted to live here. They get raw materials (palm oil) from Asia, so it is easy to import to San Diego. He said, "It would be nice to have more international shipping instead of having to transport down from Long Beach port."
Liuag said that the founder came down from Los Angeles because he wanted to live in San Diego.
Westfall said, "It is the life style of San Diego. We were briefly set up in China, and I didn't like living there. Also, San Diego has excellent supply chain - you can get whatever you want here."
Dean Gerald then asked what their workforce needs were:
Alvarez said, "It is hard to get skilled workers, technicians, maintenance, and even marketing people. They don't have the right skills." He spoke about the importance of STEM education. He said, "We need to teach people how to think and have communication skills and basic business skills."
Westfall said, "Our labor force is getting older and starting to retire. The kids coming out of school don't have any mechanical skills or basic manufacturing skills." He recommended schools giving credit for on the job training for what you cannot teach in the classroom and need to teach on the floor. Local high schools need to work with local manufacturers to give the training. He added, "There was so much labor available in China, but didn't have any critical thinking skills."
Milam said, "We need people with leadership skills to grow into managers."
Liuag said, "We need lab tech people and either get overqualified college graduates or right out of high school people with none of the skills we need." He said, "There seems to be too much focus on going to college. We need more in between."
Dean Gerald then asked, "How does local government support your business?"
Liuag said he has had support from CMTC. Alvarez said that the City of Carlsbad helped them stay in Carlsbad, find their building, and get the permits they needed.
Lastly, Dean Gerald asked about trends in manufacturing. Liuag said that automation is the most important trend, and they are heavily automated. Their automation saves half of their cost of manufacturing. Alvarez said that Chuao has had to automate to stay competitive and is working with vendors to help them incorporate more automation. Westfall said "The economies of labor rates going up will create more need to automate.
As a concluding comment from the panelists, Westfall said, "The biggest favor we could do is to celebrate manufacturing as a society. We need to make it sexy, so people want to do it."
I left right after the panel concluded to drive 40 miles north to the City of Oceanside to tour Magnaflow, which produces catalytic converters, manifolds, universal mufflers, and builder’s kits for fabricating your own custom system. Kevin Wiley, Director of Manufacturing, gave the tour. He said that the company moved to Oceanside from Rancho Santa Margarita (in Los Angeles County) four years ago and just moved into its second building. They will move last operation from Rancho Santa Margarita to Oceanside early next year.
We toured the building doing the production of the catalytic converters, manifolds and mufflers. There have 12 departments and went from 12 supervisors down to five. Because of their high production volume, they have more robots and automated lines than any other plant I have visited in San Diego County. They have even computerized their forklifts to take material/parts off shelves that are 7-8 levels high.
They have two automated tube-bending lines for making manifolds, and another automated line for making hangars. They average 6,000 manifolds per week. Their failure rate went down from 8% to 7%. They recently switched to TV screens from white boards to show production metrics (Box Score) and have reduced cycle times.
There are three Kamatsu presses owned and operated by a stamping supplier in their plant, and I saw rolls of steel getting fed into the presses for stamping. They laser cut 90% of their flanges in-house.
They produce about 2,000 – 2,500 per day of finished catalytic converters in-house. The most amazing machine cut steel sheet into the right size for their muffler housings, rolled the steel into a cylindrical shape, laser etched the logo/part number, and welded the mating edge as the end operation. After the muffler tubing was cut and welded, the tubing was wrapped in lava rock and compressed into the housings. End caps were assembled and welded onto the housings, and the muffler assembly was checked for air leaks before being packaged.
After finishing the tour, I drove a few miles east to the City of Vista to visit Open Source Maker Labs (OSML), the only "maker place" in North San Diego County. Owner Dan Hendricks said they have been open about three years, and they provide a high-tech digital fabrication lab where members fan lean, collaborate, innovate, design, and build almost anything. Their lab if filled with open workspace and cool tools: electronics, CNC machines, 3D printers, laser cutter, panel saw, press brake, welding and soldering tools, drawing and modeling programs, and a computer lab.
Since one of the main purposes of Manufacturing Day is to expose students to the career opportunities in manufacturing, I was pleased to receive the report that nearly 400 students at eleven regional High Schools visited local manufacturers and/or attended the Manufacturing Expos. Let's hope that these tours will inspire many of these students to pursue manufacturing and other STEM careers. As more and more cities collaborate with their manufacturing community to produce Manufacturing Day tours and events, we can demonstrate that manufacturing careers can be exciting to a new generation of youth.