Tag Archive: California

Which State Has the Most Manufacturing? The Answer Might Surprise You…

September 25th, 2019

According to an Industry Week article on the US 500: Top Manufacturing States, which state is #1 in terms of having the most manufacturing headquarters? California! Certainly, CA is not a manufacturing-friendly state in most places (although there is an initiative to create an advanced manufacturing consortium of excellence in the Inland Empire which is gaining support across the board). Manufacturers account for 10.93% of total output in the state and employ 7.2% of the workforce. Neither of these figures is #1 but the total output of $300 billion with an average of 1.3 million manufacturing employees does! #2 is Texas, followed by Illinois, Ohio and New York.

One of the reasons manufacturing is bucking the trends so far is that there are a vast number of consumers and companies in California, and in today’s Amazonian environment, rapid, customized deliveries are the norm. Thus, proximity matters. California is larger than all but 6 countries! The powerhouse of manufacturing is Southern CA. Additionally, California and specifically the Inland Empire is #1 in logistics in the U.S. According to research by a University of Redlands professor, logistics is at the center of what’s called an onion structure. It is the lifeline of the economy. Manufacturing co-locates or locates next to the logistics lifeline. Supporting services form the next layer of the onion, followed by all others such as retail, construction, leisure and hospitality.

What Should We Consider and/or What Impacts Could Arise?
For one, all this talk about “manufacturing being dead and gone to Asia” is obviously an exaggeration. In fact, we are starting to see executives look at reshoring as rapid delivery is of paramount importance. After all, everyone is scrambling to provide one-day delivery to keep up with Amazon, and B2B customers are expecting B2C service as well!

Further, we are seeing a SHARP increase in concern over high inventory levels to support these service levels. Some clients are concerned about the cost impact of tariffs and inventory levels and others are just becoming more focused on managing cash so they can better utilize existing resources to launch new products and services, invest in the business and more.

Since manufacturing is directly correlated to logistics, trusted advisors and other industries, it is worth paying attention. Start thinking about potential impacts such as the following:

  • Will your supply base change or move with the changing times?
  • Will capacity be available? Suppliers, transportation partners, manufacturing operations, equipment, skilled resources etc.
  • Are you agile so that you can meet changing conditions rapidly and without a significant hit to your customer experience or bottom line?
  • Do you have a skills gap? Please take our brief survey.

If there ever was a topic related to the resilient supply chain, this would be it! We have recently upgraded and added content to our resilient supply chain series.



It’s a Small World & the Customer Experience

September 7th, 2018

A few weeks ago, my brothers and nephew were in town and we did a whirlwind tour of Southern California hot spots.  We went to Universal Studios, Oceanside beach, a day-trip to San Diego for various food hot spots (a few favorites for the Arizona contingent) and to Disneyland/California Adventure.  While there, we went on my favorite ride: It’s a Small World.  What a great job they do at making the total customer experience!

Disney does a fabulous job of creating a complete experience.  In the case of It’s a Small World, you’ll notice their use of color and sound.  Interestingly, if you look at the boat ahead of us, the guests are wearing Mickey Mouse ears.  Other than sporting events, I’m not sure I can think of another place where people proudly wear hats (and certainly not odd ear hats).  As you go through the ride, there is an underwater scene where the song sounds like it is sung underwater.  Disney always goes the extra mile to fill out the customer experience.  On some rides, they add breezes, smells and more.  When walking between rides, you’ll always find people dressed in costume picking up trash so that the park is in great shape. Are you paying as much attention to your customers’ complete experience?

                             

One great way to get started is to “shop your business”.  No matter your position, try experiencing your company as a customer would.  Are you able to call whoever you might need to talk to without annoying phone system automation?  There was a brief period of time when I called my financial advisor where I was consistently lost in a phone system maze and didn’t receive a return call.  It was amazing how such a responsive and service oriented company could turn into a nightmare with a mere phone system transition.  (Thank goodness he threw it out!)

How easy is it to place an order?  Does your customer service representative have to call you back if you have questions about old orders or does he/she seem to have information at his fingertips?  Can you get information on-line if you happen to need status in the middle of the night?  Do you receive product on-time and in-full (OTIF)?  When you receive your product or service, how does it look?  Are you proud of it or do you see room for improvement?

Now, think about it – all of these items are baseline requirements.  Are you going beyond to provide a superior customer experience?  Are you predicting what your customers’ might need and prompting them?  Are you managing inventory for them?

What else are you doing to stand out from the crowd?

 

 



Manufacturing & California are on Fire!

August 1st, 2018

According to Industry Week and the National Association of Manufacturers, manufacturing is on fire!  

Manufacturers’ optimism registered 95.1% – the highest level EVER recorded! Manufacturers are projecting historic growth in investments (4.1%), hiring (3.1%) and wages (2.7%).  Projected wage growth is the fastest in 17 years.

The bottom line – manufacturing is on fire!

 

 

 

 

 

Now to turn general perceptions on its head, Industry Week did a study of the top states for manufacturing jobs and California was #1! Clearly, this was accomplished in a state that doesn’t favor manufacturing jobs (even though they pay well).  Manufacturing accounts for 11% of the total output of the state, and the state is larger than all but 5 countries (if it were a country). Why aren’t we singing this from the rooftops?!? Are you thinking of ways to leverage this advantage?

What Should We Consider and/or What Impacts Could Arise?
It is our passion that not only is Southern CA #1 in terms of manufacturing but it is “THE place to be”!  You are probably wondering if I had too many Mai Tai’s in Hawaii. Yet, there is a compelling story behind this passion:

  • Customers and consumers –  Southern California is the epicenter of manufacturing and can supply consumers and customers of what would be the 5th largest country in the world same-day
  • Mass customization – The ability to meet changing customer expectations rapidly and customized on the fly
  • More than 40% of imports come in through the Los Angeles ports – Many of these are raw materials and components to supply manufacturers
  • Access to a significant talent pool in Southern California
  • Access to high tech, automation, robotics and more
  • Access to logistics networks
  • Additive manufacturing changes the game
  • Innovation is prevalent – just to overcome the environmental standards, we have to be better!  Imagine if we can get some help with our laws….
  • With wages increasing in Asia, freight costs going up and customers demanding immediate deliveries and frequent changes, manufacturers are seriously considering bringing non-commodity manufacturing back to the U.S.  Why not Southern CA?

Think about how to leverage this massive opportunity and blaze a trail.  If you’d like to strategize with us about how to achieve scalable, profitable growth and maximize your manufacturing power, contact us.

 



Sunny California & a Positive State of Mind

March 1st, 2018

Earlier this week, I attended a conference for a day in Carmel, California.  The rolling hills, green grass and inviting outdoor eating (sometimes with amazing ocean views) can be quite majestic!  Also, the last few days in Claremont have been absolutely sunny and beautiful, even while running errands driving around town.  It certainly lifted my spirits to take notice of what surrounds me.  

Do you think this type of view can give you a push towards a positive state of mind?  And, have you noticed that those team members with a positive state of mind are more successful – and more importantly – enjoy life more!

       

 

 

 

 

One tip to implement this week:
I realize we all do not live in an idyllic setting like this one; however, we are all surrounded by beauty of different types.  Have you opened your eyes to see what’s around you?  

Even in the opposite of sunny California, we can find settings and people to help put us in a positive frame of mind!  For example, I’ve learned that people who live in Seattle love rain, and so my guess is that they would consider a picture of rain and mountains an idyllic setting.  However, even if they don’t love rain, I can’t imagine how they wouldn’t see the beauty of Mt. Rainier and the surrounding area!  But, if that occurred, find a beautiful picture to hang in your office or something that puts you in that positive frame of mind.  Similarly, in Chicago (where I lived when I was a child), it is probably cold, windy and snowy; however, Lake Michigan is likely to provide a great setting.  No matter the place, I’m sure you can find something – or someone – that is interesting, different or beautiful.

While indoors at work, there will not be these types of settings – you could put a few screen savers on your computer of any place from around the world as one of my clients did.  At a minimum, you undoubtedly have an interesting co-worker.  If you don’t, look harder.  I have yet to work with a client without at least someone who added spice into the day.  

Sometimes you have to be looking for the interesting setting, co-worker or customer to see them.  Have you walked through your facility and not even noticed who you walked by?  I admit; I’ve done it before.  Why not pay close attention tomorrow?