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Graphicast Receives International Recognition for its “Big Data” Project

Jaffrey, NH – Global business consulting firm Frost & Sullivan’s Manufacturing Leadership Council honored 100 world class manufacturing companies and individual leaders, including Graphicast of Jaffrey, New Hampshire, as winners of the 2014 Manufacturing Leadership Awards (ML Awards).

In a world of intensifying global competition and accelerating change, recipients of the ML Awards have distinguished themselves by embracing breakthrough innovation and enabling their companies to anticipate and respond to customers with unmatched agility.

Now in their tenth year, the Manufacturing Leadership Awards honor companies and individuals that are shaping the future of global manufacturing. Nominations were in nine categories for outstanding projects undertaken and completed by a manufacturing company, and were evaluated and scored by a panel of expert judges. Two categories recognized the achievements of individual manufacturing leaders.

Although a small company by industrial standards, Graphicast has been a pioneer in the use of detailed analysis of manufacturing and operations data to improve revenue and reduce costs. “Big data” refers to the massive amounts of information that many companies have collected on their operations that, until recently, was difficult to analyze effectively. New data analysis software, now available to even the smallest companies, makes this data come alive, providing rich and meaningful insight into the company’s operational trends and direction. Graphicast coupled data analysis with business optimization software, which allows the company to determine the most profitable path to grow the company and improve performance. The mathematics of optimization methods grew out of the necessities of World War II and garnered a Nobel Prize in Economics for their developer.

Graphicast also won an ML100 award in 2009 for its work on improving shop floor scheduling and work flow.

Manufacturing Leadership Award winners and their technology partners will be honored on June 5 at a gala celebration that follows the tenth annual Manufacturing Leadership Summit in Palm Beach, FL, a unique gathering of manufacturing leaders from around the world. The theme for the 2014 Summit is “The Next Industrial Revolution: What Will Your Company Look Like in 2030?”

Global Success – a tale of innovation and rebirth in Indian manufacturing

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

I had the great pleasure of spending most of the last two weeks in India. My wife and I were invited to attend the wedding of the son of a former work colleague. Besides the chance to spend time with an old friend and to absorb the fantastic cultural experience of an Indian wedding, we also toured many of the famous sites throughout the country. An added treat was a plant tour of my friend’s company, Pradeep Metals, Ltd. Started with his father over 30 years ago, the company has evolved from humble beginnings to become a world class supplier of nuclear grade steel forgings. This journey involved a dramatic change in markets served, additions of many quality standards, an ongoing lean manufacturing effort, constant reinvestment in new equipment and methods, investment in his employees, and a commitment to social responsibility. You could tell this story in any industrialized country and instantly identify the type of company this is – a modern, progressive manufacturing company committed to customer service and employee empowerment.  This level of sophistication is not unique in Indian manufacturing. This level of energy is also not unique.

Throughout India, in addition to the many palaces, forts, and monuments such as the Taj Mahal, you can feel an incredible energy. You see the little stores packed on top of each other in the crowded cities and in the smallest towns. A whole nation of entrepreneurs at work, with few breaks or downtime.  The roads are packed with trucks, cars, scooters, camel carts, bicycles, pedestrians, and the occasional cow or monkey. You’ll see a hand operated water pump next to a bank of solar cells. Universities advertise their degree programs on billboards along the highways. While you can’t escape the broad contrasts of luxury hotels located next to people living in the streets, there is a surging economy gradually making life better for many in this country of over 1 billion people. There are challenges of bureaucracy and corruption working against growth, but not enough to stop it. With a well educated work force, a familiarity with western business practices, and the rule of law prevailing, this seems like a country well positioned to be a focal point for expanding global businesses. I saw a huge difference in the country since my last visit of twenty years ago. I left feeling that even greater changes are at work and India is poised to be a major player in the global economy.

Musings on the Election

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

Being a manufacturer and the owner of a company, I should be in the perfect demographic category for being a Republican. The Republicans lost me a decade ago. The Republicans went from being pragmatic problem solvers, with a Main Street business mentality and little concern about what you did in your personal relationships, to fiscally reckless moralists who want to control your personal life. They say they want smaller, less intrusive government, but want to legislatively impose a morality at odds with most of the country. Increasingly, they cannot put forth a message that resonates with the country in national elections, are having trouble in statewide elections, and are only able to capture voters in isolated congressional districts. Hence, they lost the Presidential election, lost Senate seats, and lost some congressional seats, only able to keep control of the House through gerrymandered congressional districts. It’s not that I am a through and through Democrat, I just find the current day Democrats more realistic problem solvers than the current day Republicans.

I have a suggestion for the Republicans – split the party and come back to your roots. Let the radical wing nuts form their own party. They can call it the Tea Party, the Arrogant Know it All Party, or whatever suits them. They will be happier and the moderate Republicans won’t agonize over trying to coddle the vocal minority. The new Republican party will actually recognize problems, not ignore them, and offer prudent,  moderate, rational, pragmatic solutions to problems.  Many independents will join them. Many moderate Democrats will join them. Many lapsed Republicans will join them. They will offer real alternatives to our nation’s issues. They will stay out of our bedrooms and doctor’s offices. They will start to win elections and begin to rebuild themselves as a respected voice in the national dialogue.

Without some change to the tone and substance of their message, I think the Republicans will become increasingly irrelevant. I, for one, do not want a one party monopoly. Please come back.

Go Big or Go Home!

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

Go Big or Go Home. This was the title of an article by machine tool builder Mori Seiki about one of their customer’s decisions to buy some large pieces of equipment to give them a competitive advantage. The concept relates to much more than machine tool size.

In manufacturing, continuous improvement is a mantra of the Lean Manufacturing crowd. Small, steady steps in improving your day to day activities can lead to increased productivity, elimination of waste, and improved profitability. However, making a decision to employ these concepts in your company is not a small step. It is a big decision. It is a major cultural  transformation and a multi-year, if not a permanent commitment to a new operating philosophy. Going Lean is going big. The same could be said about committing to an ISO 9001 quality system. Or employing Theory of Constraints. Or adopting Quick Response Manufacturing.

Going big also relates to capital investments, new facilities, acquisitions, developing new products, or entering new markets. Although business people are  characterized as conservative by nature, making big decisions often requires bold risk taking and an audaciousness not present in the ranks of most corporate managers. Business dynasties aren’t created by just crunching numbers and analyzing data.  Mixing number crunching with guts and vision is what it takes to  make things happen. To paraphrase New Hampshire native son, newspaper editor Horace Greeley, “Go big, young man, go big”.


Something Good is Happening in Manufacturing

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

Graphicast just closed the books on the incredible month of November 2011. Our shipments were among the five best months in the last 10 years, and our bookings exceeded our previous best month by over 35%! Our backlog is at its highest level in five years and we’re running 7 days per week. We’re planning a plant expansion, and we can’t get equipment in fast enough as far as we’re concerned.

We’re hearing similar stories from other companies in the state. Although unemployment remains high and the overall economy is slowing growing, there is a major expansion underway in some parallel economy that’s not showing up in the normal data. One explanation is that the manufacturing economy is driven by global economics, not national economics. As there are parts of the world nicely expanding, those of us in manufacturing are expanding as well. I wonder what things would be like if the US economy really took off?

What Would Small Manufacturers Occupy?

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

We have the Tea Partiers occupying Congress (or at least a part of it) to protest intrusive government. We also have the 99 Percenters occupying Wall Street to protest an intrusive banking and financial services industry.  Although some of us in manufacturing may sympathize with these other protest movements, if we formed a coalition unique to small manufacturing, what would we protest? Government regulations? Government gridlock? Ineffective public education? Predatory banking? Labor unions? Red tape at all levels of government? Globalization? Is there one issue we could all rally around that would help us, or are we too regionalized and diverse to have a common gripe? I certainly don’t have the answer, but you may. Let’s hear from you.

Ugly, but Profitable

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

In the February issue of Modern Casting, Dan Marcus comments that some of the oldest, ugliest foundries in the metalcasting business are also among the most profitable foundries in the metalcasting business. His argument is that equipment has little to do with how profitable metalcasters can be.  Good management has everything to do with how profitable metalcasters can be. Knowing your markets and focusing your business toward them is a more potent profit generator than the newest, most efficient piece of production equipment. Many companies fall into the costly trap of thinking they will be more profitable if  they could only acquire the latest bit of high productivity equipment, never recognizing that unless they do things differently, they will just have more debt, lower cash flow, and fewer profits. His argument is similar to one I read a few weeks ago about machine shops profitably growing relying on older equipment. It’s also my experience in New Hampshire – more companies fail due to poor management than from poor workers or foreign competition. Ugly and wealthy, or pretty and poor. Which would you choose?

The Pain and Promise of US Manufacturing

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

NADCA, the North American Die Casting Association, has just published a great synopsis of the path, and promise, of US manufacturing.  Here it is, in its entirety:

“The common wisdom emerging from the national media frequently notes that the American economy has lost its ability to “make things”…that we lost most of our manufacturing capability to China and to Mexico. The common wisdom notes that we have simply become a nation of hamburger flippers, as well as a nation where we merely trade information with each other.

The common wisdom largely adds the U.S. to other formerly powerful nations on the scrap heap of history, a nation whose best days are behind us. The facts are a bit different.
Job Losses
There is no question that employment losses within the U.S. manufacturing sector over the past 30 years have been massive. We all know a neighbor, a friend, or family member who lost their job in manufacturing, particularly in the industrial Midwest.
Total U.S. manufacturing employment peaked in 1979 at 19.6 million people. That total has fallen consistently and painfully to 11.6 million now…a loss of eight million jobs…a loss of 40% of all manufacturing positions.
The common wisdom notes that most of these jobs left in search of less costly havens, initially Mexico and then China. This is certainly true for a share of the jobs. However, the most important factor leading to lesser employment was major gains in worker productivity…we simply make more goods with fewer bodies. While overall U.S. worker productivity gains have run just under 3.0% annually over the past 10 years, productivity gains in manufacturing have run 2-3 times higher.

U.S. Ranking
It might surprise you that the U.S. continues to lead the world in manufacturing output. We produce more than the Chinese, the Japanese, the Germans, etc. U.S. output exceeds that of China by 40%

It might surprise you that the U.S. share of global manufacturing output, at 20%-25%, is essentially the same as it was 40 years ago

It might surprise you that output per U.S. worker is three times what it was in 1980 and twice as high as it was in 1990

Making a Comeback?
U.S. manufacturing employment actually rose by 136,000 net new jobs during 2010, the first annual increase since 1997. Moreover, the weather-distorted January 2011 employment data saw an estimated jump of another 49,000 jobs, the largest monthly gain in 12 years.

Various estimates suggest that the American economy will add 300,000-350,000 net new manufacturing jobs this year, a rise of roughly 3.0%. Longer-term estimates suggest the manufacturing sector could add one million jobs over the next 4-5 years. Such a rise clearly won’t make up for the loss of two million manufacturing jobs in the Great Recession, but it helps.

U.S. manufacturers have largely thrown in the towel on lower cost, lower skill, lesser profit margin manufactured products such as toys and electronics. At the same time, U.S. manufacturers have moved aggressively toward more complex and expensive goods requiring specialized labor, including health care products, jet fighters, computer chips, and industrial machinery (The Associated Press).

Outsourcing of Jobs
American companies have continued the exodus of former American jobs to other less costly parts of the world, although the pace has slowed. The rationale has also changed somewhat.

Hundreds of American firms had sent production and jobs to China, with products then shipped back to the U.S. to be sold. The current environment finds more and more of that production sold within China, or within other Asian nations. This change is identical to that of major foreign automakers who build billion dollar facilities in various communities within the U.S., with the intent of selling those cars not back home, but within the U.S. market.

“Onshoring” of Jobs
One very favorable development within the U.S. manufacturing sector involves decisions by more and more American companies to bring back production and jobs previously sent to China, Mexico, and other low cost production locations. Companies such as Ford, General Electric, and dozens of others have seen the costs of operations, particularly wages, climb dramatically across China while shipping costs have surged.

Issues of shoddy products and the theft of intellectual property have blackened the eye of outsourcing. The reality of too many midnight telephone calls and frequent trips halfway around the world to deal with problems has also taken its toll.

Another painful reality faces companies within the U.S. and from around the world with an interest in setting up production in China. The unspoken but understood fact that a company must typically give up its most sensitive trade and technological secrets to the Chinese in order to get in the door, as one might expect, muddies the water as well.

Many foreign companies have set up shop in China, only to then see products nearly identical to their own soon marketed by Chinese competitors, at substantially lower prices. The laundry list above has provided solid incentive for additional onshoring of jobs in coming years. Drug cartel violence across Mexico has also led hundreds of American firms to reconsider doing business south of the border.

Similar issues are at play in the white collar world of back office operations and call centers, where the American job shift to India has drawn great concern. Sharply higher wage costs and higher levels of worker turnover (note: these people are working during their nights to handle our daytime phone calls) have also led to some jobs coming back home. The emerging issue of cloud computing will also impact white collar outsourcing decisions.

“Rural” Outsourcing
More American companies based in large metropolitan areas are taking advantage of “outsourcing” some of their business operations to rural American communities, especially those where a university might be located. The rationale? Access to talented people with lower wage and housing costs, similar operating hours, and a common language come to mind.

Down the Road
The U.S. still accounts for 40% of total world R&D spending. We lead the world in science and technology, although that lead is slipping, according to the Rand Corporation.

Despite more recent successes, major challenges remain. Millions of lost jobs will never return. At the same time, ninety percent of manufacturers report having difficulty in finding skilled production workers. In addition, a large share of the manufacturing workforce will retire sooner rather than later, with the average U.S. manufacturing worker being 50 years old (The Agurban).

Greater cooperation between local universities, community colleges, and high schools to provide quality training for local manufacturers remains a challenge largely unmet. Parents and educators need to promote a career in manufacturing as a highly desirable outcome for tens of thousands of new graduates.”

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Taking Innovative Casting Technology to Your Bottom Line™

Graphicast Inc.

PO Box 430 36 Knight Street,
Jaffrey, NH 03452
phone: 603-532-4481
fax: 603-532-4261