In Issue 2018 September, Manufacturing By Amy Lane

In northwest Michigan and around the state, manufacturing is strong. Manufacturers in Northwest Michigan Works! 10-county region added more than 2,400 jobs over the last five years – a 17 percent gain that eclipsed the state’s 14 percent manufacturing job increase – and the sector ranks in the upper range of growth among regional industries.

But manufacturers are facing both challenges and evolution, and for some perspectives on issues affecting the industry, the TCBN caught up mid-summer with two leaders: Michigan Manufacturers Association president and CEO Chuck Hadden (below left), and Jon Dreher, vice president of manufacturing at Traverse City’s TentCraft (below right). Dreher is executive chairman of the Grand Traverse Area Manufacturing Council, a group that connects manufacturers with people, information and resources through events, meetings and sessions to address key industry topics, and seeks to be a collective voice for the industry.

Jon, first of all, could you talk a little about the manufacturing council, how many members it has and the geographic area it covers?

DREHER: We have almost 50 members and have doubled membership in the past year. We represent a five-county region: Leelanau, Grand Traverse, Kalkaska, Antrim and Benzie. There are about 350 manufacturers in our region. We are about three and a half years old.

We’re event-driven, collaboration-focused and have identified some great topics for events that we hold throughout the year: Manufacturing Day in the fall; Manufacturing Summit in the spring. We also have a supplier day to recognize suppliers in the region to manufacturers. And we have a golf outing in September, where proceeds go to the [Traverse Bay Area Intermediate School District Career-Tech Center’s] Manufacturing Technology Academy. With a lot of those initiatives, we’ve gained a lot of momentum.

What is the council’s primary role, or mission?

DREHER: Essentially we’re here to build a strong manufacturing region, which can’t be done with an individual manufacturer or just manufacturers alone. We bring manufacturers, educators and suppliers together to collaborate to build a strong industrial region. And that’s really the basis of why we formed our council. It was formed by a group of volunteers that have a passion for manufacturing in northern Michigan.

In the manufacturing world, there’s a lot of talk about Industry 4.0, also referred to as the fourth industrial revolution. It is the growing digital and technology influence in manufacturing, leading to increased automation, communication and analysis and self-monitoring – a transformation in the way manufacturers operate. What is the end game of employing Industry 4.0? How can it improve manufacturing operations?

HADDEN: It can improve it in a lot of different ways. You take the human error out of everything, basically. You are making it more efficient, you are lowering the cost of your product … there’s a lot of good things that come out of this.

DREHER: It has a great ability to be able to set manufacturers up to be a low-cost provider, for the process or product that they offer. So having intelligent processes that are continuously improved through Industry 4.0 that also allow you to innovate rapidly is really where the gains are realized. I think this helps you innovate quicker.

What would you tell a small- or medium-sized firm that is contemplating this?

HADDEN: I would say to them they need to think about the future and where they are going. Who are their customers and how can they be more helpful to their customers, using the internet of things [the interconnecting network of intelligent devices, equipment, systems and applications]

DREHER: I think one of the challenges – and I think it’s a really hard question to answer – is how do you use that within your organization and take a first step with it. The council and MMTC [Michigan Manufacturing Technology Center] are … trying to put together a forum of people to get together and talk about it.

How does Industry 4.0 affect the manufacturing workforce and what employers need to do to retain and attract employees?

HADDEN: Future employees have to understand that when you take this job, it’s continuous learning for the rest of your life. The employees are probably going to be coming to the employer and saying, ‘I need this class,’ so you can do this, and you can sell that to someone else, your customer. The employee is going to be much more needed; there’s just not going to be as many of them.

Jon, in the Grand Traverse region, what are the biggest workforce/talent challenges that area manufacturers face?

DREHER: A typical response to that question would be that manufacturers need machinists. And that’s a true statement. But I think the talent challenges are becoming more widespread than we realize. Yes, machinists are important, but we also have the fact of manufacturing beyond the shop floor: people from accountants, to engineers, marketing … the list goes on and on.

Are there things that manufacturers or the council are doing to help address this?

DREHER: There are a lot of organizations in town. Where does the council fit in, is the question. If we can be a voice to the parents, and a voice to the kids, and ultimately make an impact on career choices and embracing local institutions such as the TBAISD … that is the biggest thing that we’re working on right now, as a group to try to figure out. … I think part of the responsibility is being that awareness voice to motivate upcoming kids and generations to make this a career path.

In the area of talent and workforce, a number of bills were passed by the legislature in June and signed into law. They included: grants to K-12 schools and intermediate school districts to provide stipends to industry mentors to assist teaching classes in high-demand fields; allowing non-certified individuals with professional experience to teach an industrial technology or career and technical education program for a period; increased focus on career guidance and preparation; and revising the Michigan Skilled Trades Training Program. Chuck, how do you see these measures helping manufacturing?

HADDEN: We were in favor of all of those moving forward, because they all have a piece that we thought was needed. I think these are all things that are going to help the workforce and help people.

The change to allow non-certified individuals to teach was important to the MMA?

HADDEN: It was. We know we are going to lose a mountain of talent because of the age of baby boomers … they’re going to be retiring soon. And we didn’t want to lose that knowledge if they can continue to work and find a way to pass that knowledge on.

At the state and federal level, building a new lock for freighters at the Soo Locks in Sault Ste. Marie is seeing new momentum. How important is this to manufacturers?

HADDEN: Vital. And it’s not just for us, it’s for the farmers and the grain, it’s for Consumers [Energy] and [Detroit] Edison for coal coming in … it’s absolutely vital that we upgrade the locks, so that large freighters … can go through these locks.

DREHER: It’s something we can’t take for granted. This is something that helps ensure our future so that we can continue to produce American-made products, from raw to finished goods in our supply chain.

What’s ahead for Manufacturing Day on Oct. 5 in the Grand Traverse region?

DREHER: That’s our annual opportunity to expose kids to probably their very first touch point and their parents about a career in manufacturing. This year we are expecting to have 40 manufacturers and over 800 seventh and eighth grade students participate.

Anything new this year?

DREHER: Not specifically for our region. We have begun to work with the Northwest Michigan Industrial Association, which is the council for the Petoskey region, [and] help them launch a Manufacturing Day for their region … in 2019.  It’s a great way to just spread the word about manufacturing when we can take some lessons learned from our region and growth and help another region employ Manufacturing Day.

Anything to mention about the state of manufacturing?

HADDEN: Right now the state of manufacturing has been really good. A lot of us are thinking it will be good next year; not sure after that. Right now, everybody is working as many people as they can, as many shifts as they can. I don’t know anybody that’s not busy, busy, busy.

DREHER: I think manufacturing is healthy. We’re at an exciting point … and small- to medium-sized companies like we have many of in the Traverse region, [are] really the backbone of the manufacturing industry. Behind the scenes, there’s a lot of effort being made in this region to support growth. We have some exciting times ahead of us.

Amy Lane is a freelance journalist and former reporter for Crain’s Detroit Business, where she covered business, state government, energy and utilities for nearly 25 years.