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A Low Tech Approach Shows A High Tech Industry Is Alive And Well

Mon, 08/15/2011 - 10:28am
Rob Akers

In the age of email, websites, Twitter and Facebook, it’s easy to forget that, in sales, there is no real substitute for the personal touch.  This personal connection has never been more important to U.S. suppliers, who are seeing an upswing in orders from both U.S. and overseas manufacturers.  The 25 year history of the National Tooling and Machining Association’s (NTMA) Contract Manufacturing Purchasing Fair is proof that face to face contact results in business, with thousands of new business relationships established between Original Equipment Manufacturers (OEMS) and other large companies, and small and medium sized suppliers.

This year’s Fair, to be held at the InterContinental Chicago O’Hare Hotel on September 8, will serve as a showcase for the changes that are currently taking place in U.S. manufacturing.  The manufacturing sector is the one bright spot in the slow and spotty economic recovery now underway in America.  Manufacturers are in better shape today than they were over the last few years and are seeing a rise in orders.  Two reasons for this improvement are an increase in orders from overseas, and U.S. OEMs reconsidering their move to overseas suppliers.  Because of favorable exchange rates, the desire for shorter supply lines, quality issues from sourcing in Asia and other factors, large domestic and foreign manufacturers are turning to U.S. small and medium sized manufacturers for their sourcing needs.

Harold Sirkin of The Boston Consulting Group has been quoted in numerous media publications for his prediction that overall costs in the U.S. and China are likely to converge around 2015, “ushering in a ‘renaissance’ for U.S. manufacturing.”  Sirkin based his prediction on the fact that Chinese labor costs are rising at a 15-20% rate each year.  The narrowing of labor costs between the U.S. and China will tip the balance for many companies when choosing a supplier, given the benefits of sourcing in the U.S.

In fact, the move to source in the U.S. is already underway.  According to a March MFG.com survey, one-fourth of more than 850 companies surveyed returned work to North America from overseas in the last quarter of 2010.

While “reshoring” (bringing jobs back to the U.S.) may still be in its infancy, the upcoming Purchasing Fair offers proof that domestic OEM’s are taking a second look at U.S. suppliers, and foreign companies are starting to take notice of the competitiveness of U.S. shops.  Large OEMs including Alcoa, GE, and Kimberly Clark plan to attend the NTMA Fairas along with foreign OEMs such as Canada’s Espar Products and Ecuador’s Smelektronik CIA LTDA.  In addition, the defense industry will be well represented with the participation of the US Army Aviation & Missile Life Cycle Mgmt and the US Army Sustainment Command & Joint Munitions Command.

The format of the Purchasing Fair is unique, efficient, and decidedly personal.  Approximately 150 customers of the contract special tooling, machining and metal forming industry will participate.  The high tech part takes place before and after the Fair.  The OEM’s are able to review the suppliers who will be attending the Fair so that NTMA can better match their needs with supplier attendees.  Large OEMs represented by supply chain specialists, buyers, engineers, and production specialists will have the opportunity to talk with suppliers who meet their parameters about their needs for special tooling, precision metal stampings and fabrications, and precision machined parts.  After the Fair, NTMA provides the OEMs tools to issue RFQ’s to suppliers of their choice to begin taking advantage of the new resources found at the Fair.

For small and medium machine shops that aren’t sure how to take the first steps in contacting large OEMs and foreign manufacturing, the Fair offers a great place to start.  One OEM recently wrote NTMA that they had met with 81 different potential pre-qualified suppliers, something that would have taken a year or more to accomplish using normal business channels.

Despite predictions of doom and gloom from the pundits earlier this decade, U.S. manufacturing is in fact alive and well, and gaining momentum against overseas competitors as evidenced by the popularity of the NTMA purchasing fair. 

Rob Akers is Vice President and Chief Operating Officer at the Cleveland-based National Tooling and Machining Association.  The NTMA Contract Manufacturing Purchasing Fair will take place on September 8, 2011 at the Intercontinental O’Hare Hotel in Chicago, IL.  For additional information and to register, visit www.purchasingfair.com.

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