Population Growth and Globalization are two very important determinants or drivers of your precision machine shop business.
Are you paying attention?

We think that the population growth is one of the most important determinants of demand for our products- after all, our products are bought and used by people.

Population growth = more customers
Population growth = more customers

But it goes further than that.

More people means more energy is needed. that means equipment to harvest, recover, refine and transport.

More people means that we need to use smaller amounts of materials to do an equivalent amount of work. This is called ephemeralization, and it is why we seldom see the 4″ Acme running round the clock, while all of our smaller diameter swiss machines are booked solid across multiple shifts.

Ephemeralization is why I can now watch TV on my hand held device, in contrast to the 75 pound “portable ” TV I had back in the 1970’s with a steel chassis and case.

Portable! Not quite...
Portable! Not quite…

Maybe the population isn’t growing where you live- but globally, globally we are adding 82,000,000 more people each year.

If they are to have the same standard of living, that means more energy, more appliances and plumbing, more transportation, more healthcare.

Global Population growth is the “Driver of Drivers.” it is what drives the change in the other market areas that affect our shops: Mobility, Communication, Health, etc.

So how can a shop owner look at these two megatrends of population growth and increasing globalization for planning purposes?

Population growth means

  • Increasing demand-Automatic machines to economically handle production volumes
  • Market demand following demographics
  • Low mass devices- Stronger more difficult to machine materials
  • Low mass devices- Smaller parts requiring greater precision
  • Smaller rather than larger size machines

Globalization means

  • Worldwide markets but needing localized products
  • Small batches for local markets
  • Greater competition moderated mostly by freight costs
  • Skills gaps can be solved “over there” if we don’t solve it here
  • Costs of raw materials reflect worldwide rather than local economic conditions.

One of the failings of Soviet style central planning was well, central planning.

One of the weaknesses that we have as small entrepreneurial shops is failure to see the big picture.

Population growth means more, smaller, and more difficult to machine and produce materials and products.

Globalization means larger markets but must be localized products, more expense for raw materials and energy, and greater competition.

What is it that your shop does better than anyone else in the world?

If it is making big parts in large volumes, from easy to machine materials, we would not be terribly optimistic.

If you say it is making batches of complex things with high value from difficult to machine materials in small to tiny sizes. if it is for critical parts used to collect or use energy, we think that you might be playing these megatrends just right.

Post inspired by presentation by Horn: Tools for Today and Tomorrow

Population Photo

Portable TV

Is now the right time for you to start your career in U.S. Manufacturing?

The phrase "get in on the ground floor" comes to mind...

I found this chart on Global Macro Monitor Blog on WordPress.  They look at it for their purposes. Lets look at it for ours.

I started my manufacturing career in September 1973, near the bottom of the “Nixon Decline.” It wasn’t easy- I had plenty of layoffs- but there was plenty of upside and I went from laborer in a sintering plant through a series of jobs to become, senior plant metallurgist, quality director, plant manager, division director for quality and technology.

Being in the right place at the right time (manufacturing) from 1973 to 1977  allowed me to take advantage of the upside in manufacturing that  gave me the momentum to grow my career.

Looking at the chart above, 2012 looks like the exact same opportunity, only better.

Global Macro Monitor lists some of the factors which influenced the chart above:

  1. Strengthening of the dollar during the 1980′s;
  2. Globalization;
  3. Entry of China and India into the global labor force;
  4. The internet;
  5. Improved productivity; 
  6. Technological innovation; 
  7. Demographics and worker preferences;
  8. All of the above.

I speak and meet with precision machining company managers and owners daily.

All are looking for people with skills and talent.

All are investing in training for their proven performers.

Our National Technical Conference last week  had over 102 first time attendees.

Twice as many companies offerred internships as there were  students in our first Right Skills Now class.

A comment I received yesterday on Linked In: “I teach Precision Machining and our students are all getting jobs now and the starting pay is getting better… ”

These are some very strong indicators that now is a great time to start a career in manufacturing.

 If you can do the math and solve problems based on your experiences, we’d love to have you in our precision machining industry.

P.S. And even though I characterized it as the “Nixon Decline,” I am not at all holding any president responsible for these.

There are far more important factors at play in this chart than whether or not there is a Donkey or an Elephant in the oval office.