This July, the Pikes Peak Manufacturing Partnership officially became the Southern Colorado chapter of CAMA, the Colorado Advanced Manufacturing Alliance.
CAMA was formed in 2012 at the direction of Gov. John Hickenlooper. Its mission is to grow manufacturing in the state and to increase the competitiveness of Colorado manufacturing, leveraging relationships and technology.
Why join CAMA?
The answer really lies in leveraging resources and connecting the entire state. Manufacturing is a highly connected industry — suppliers and customers and many times competitors are located strategically for efficiency. For example, the trend in automotive manufacturing has been to build large campuses where all suppliers are located as close to the production line as possible. Leaning out the supply chain reduces inventory, cost and lead time. (For information about CAMA’s annual forum, see page 10.)
FUSE IMPACT CENTER
A recent additional resource to Southern Colorado manufacturing is the Southern Colorado FourFront Fuse Impact Center. First and foremost, it is in place to be a commons for all manufacturers. It provides a state-of-the-art venue for digitally connecting manufacturers throughout the state, as well as throughout the nation. This Fuse Impact Center also serves as the general office for the Southern Colorado Chapter of CAMA. You can learn more about the Fuse Impact Center, its mission and activities at fourfrontco.com. CAMA stood up this Southern Colorado Center with its strategic partners, the Southern Colorado Technology Alliance and Catalyst Campus.
One thing you can certainly say about our economy, it is in a constant state of flux and less predictable than we would like. The drop in the oil and gas sector, along with a very soft global economy, has created quite a ripple effect. Low-cost natural gas has created a major problem for the coal industry, with winners and losers (there are always winners and losers with shifting demand and technology). On one hand, we have lower-cost energy, which puts more money in our pockets; on the other hand we are in a global industrial recession and there is currently more capacity for building industrial equipment than there is demand for it.
Result — less demand for ore, metals, steel, heavy equipment and transportation. All these are linked together. The result is winners, losers and a flat gross domestic product.
At the same time, several area industries are flourishing. Auto production is up, home building and commercial construction are on the rise, aerospace and medical industries are strong and the tech sector (however you define it) is always exciting. New products in all markets are being introduced so fast it is impossible to keep up. The trick to succeeding is quickly identifying these trends and positioning your company to take advantage of the leading side of the demand curve. Keep in mind you will likely find someone else at your heels, or perhaps neck and neck with you.
As we are all aware, a significant portion of production has shifted from the United States to low-cost producers, such as China. Some of this work is coming back, but much of it will likely never come back. The infrastructure to support globalization has leveled the playing field, but the field is anything but level. I had an interesting conversation with a colleague from China the other day. He was in the area discussing the possibility of setting up a U.S. operation to supply the growing demand for industrial products. When he told me what he was paying for labor and how his integrated supply chain costs are very low, it hit me; China is 40 years behind the U.S. in employee compensation and nearly on equal ground with us in manufacturing technology. What they can’t create they often copy, and at some point they will figure out that quality really matters.
In the natural evolution of business — particularly in manufacturing — innovation, technology, vision and timing rule the day. The need for change has never been greater. The need for speed and collaboration has never been greater. The life cycle of just about any product continues to fall; we are living in a much more disposable society than ever before, which means the need for new, exciting, efficient and low-cost products and methods of producing those products is growing.
Our job is to capitalize on the opportunities.
Tom Neppl is CEO of Springs Fabrication Inc. For more information about CAMA, go to coloradomanufacturing.org.