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US Manufacturing Renaissance US Manufacturing Renaissance Presentation Transcript

  • U.S. Manufacturing Renaissance and Implications for Planners It’s Not Your Father’s Industrial Revolution
  • Kevin HivelyPresidentNinigret PartnersRussell J. Burke, AICPDirector of PlanningBSC Group
  • Manufacturing Renaissance and Its Implications ANIMATE Buildings Processes Labor
  • Manufacturing in Economic Context 4
  • Facts about manufacturing Did You Know...•The United States is the worlds largest manufacturing economy, producing 21 percentof global manufactured products. China is second at 15 percent and Japan is third at 12percent. 1•U.S. manufacturing produces $1.7 trillion of value each year, or 11.7 percent of U.S.GDP. For every $1.00 spent in manufacturing, another $1.35 is added to the economy. 2•Manufacturing supports an estimated 17 million jobs in the U.S.—about one in sixprivate sector jobs. 3 Nearly 12 million Americans (or 9 percent of the workforce) areemployed directly in manufacturing. 4•In 2010, the average U.S. manufacturing worker earned $77,186 annually, includingpay and benefits. The average worker in all industries earned $56,436 annually. 5•U.S. manufacturers are the most productive workers in the world—far surpassing theworker productivity of any other major manufacturing economy, leading to higherwages and living standards.•U.S. manufacturers perform two-thirds of all private sector R&D in the nation, drivingmore innovation than any other sector. 6•Taken alone, U.S. Manufacturing would be the 9th largest economy in the world. 7•1 United Nations, Statistics Division (2009).•2 U.S. Bureau of Economic Analysis, Industry Economic Accounts (2009).•3 The Facts About Modern Manufacturing(2009).•4 U.S. Bureau of Labor Statistics.•5 U.S. Bureau of Economic Analysis, Compensation of Employees by Industry and Full-Time Equivalent Employees by Industry.•6 National Science Foundation (2008).•7 U.S. Bureau of Economic Analysis, Industry Economic Accounts (2009) and nternational Monetary Fund (2009).
  • The death of manufacturing in the US is greatly overstatedManufacturing has stopped shedding jobs…. And contributed more than 500k jobs to the recoverySource: NP analysis of BLS data
  • The China Gap is closing
  • The China Gap is closing (continued) Advantage US Advantage ChinaSource: PWC, Alix Partners, Hackett Group; NP graphics
  • Logistical advantage could become a key differentiator has factor cost differentials shrink • Time, not only freight costs, are an increasingly important consideration • Transit alone from China can take 4-6 weeks – A client has a lead time of 7 months – Drives carrying excess inventory • Each day in transit equal to a .5% to 2.3% tax - NBER working paper • If a product is late to market by 6 months 33% of gross margins are already lost – McKinseySource: Journal of Commerce; Logistics Performance Indicator, World Bank
  • So what might this mean Most prognosticators believe movement will become more noticeable beginning in 2015 Boston Consulting Group estimates that another 600k-1 million direct manufacturing jobs with another 1 million in support jobs could be created by 2020 However, most analysts believe that the opportunities will principally be for the industrial south and selected areas in the midwestSource: Boston Consulting Group; Hackett Group
  • The Future of Manufacturing
  • A special note about “green” … “Green/Clean Industries” is a warm, fuzzy catch-phrase that is thrown around with great frequency that conjures up images of benign industrial uses.
  • Clean-tech is a really large and diverse field Source: Cleantech Group LLC
  • So if you are going to create a “greentech / cleantech zone” make sure youunderstand what it means… Because it may not be what you think…. Pelamis Wave Energy Ostara Nutrient Recovery
  • Moreover initiatives such as Product Lifecycle Management are challenging the definition of “green” industries• "PLM” or Product Life cycle Management is a process to consider the lifecycle of a product from its conception through its manufacture, to its retirement and disposal.• It has emerged from a series of interlocking initiatives and pressures – Environmental disposal liability – Green movement – ISO 14001 Source: Toyota
  • By product synergy networks are an example of lifecycle management putinto practice
  • Advanced Manufacturing• A recent survey of advanced manufacturing definitions by the White House states: “A concise definition of advanced manufacturing offered by some is manufacturing that entails rapid transfer of science and technology (S&T) into manufacturing products and processes.” (PCAST, April 2010.) Source: New England Council
  • And then there is the future of manufacturing Additive Molecular / Nano Personal / Bespoke Manufacturing Manufacturing Production  Creating products by  Creating products  Creating small batch layering materials through assembly at or custom products rather than the molecular level  Typically found in subtracting materials  Nano products jewelry, food  Technologies  Carbon products, textiles,  3 D printing nanotubes clothing, furniture  Laser sintering  Synthetic biology  Examples of current products  High speed gearboxes  Jet engine ducts  Dental implants  Future products  Biomaterials  Precision parts
  • Demonstrating Additive Manufacturing• You Tube 3 D • You Tube DLMS Printing Sintering• http://www.youtube.com/watch?v=0zwy8mX1UQ • http:// www.youtube.com/watc
  • Projected growth rates Additive Molecular / Nano Personal Production Manufacturing Manufacturing  Equipment sales  Consumer nano-  Unknown but as growing an average based products have examples 26.4% per year increased from 54 in  Nike custom  Projected global sales 2005 to 1317 in 2010 shoe business of $6.9 billion by  Silver represents 25% is now $100 2019 of the involved million  For perspective material annually Chinese Plastics  Makerbot sold 10000 Injection Machine 3-D printers in 2011 market is $3.9 billion  Zazzle, an online mass custom retailer, web traffic has increased from 1 million per month to 4 million per month Source: Wohlers Associates; Source: Project on Emerging Research and Markets Nanotechnologies
  • Where Nanotech is Happening in the USSource: Project on Emerging Nanotechnologies
  • Manufacturing and Economic Development
  • Factors to consider to seize the opportunities• Taking advantage of the reshoring and domestic expansion of manufacturing in the US is more complicated than hanging out a shingle or sending a brochure• Planners and development officials need to take into consideration a series of factors and think not about just a site but about the ability to provide the full requirements of a manufacturer – Labor force (location and training) – Suppliers (components, subassemblies, and waste stream management) – Logistics – Sites• Successful communities will be able to mesh each of these factors into a compelling product
  • Planners may want to consider adding workforce information into their localcomprehensive plans economic development sections to elevate the issue
  • The big question for planners Do you have the right type of product?
  • Throughout New England there is a high availability of industrial real estate– but most of it won’t work for contemporary uses Example of Assessment of Viability of Vintage Industrial Building Challenges •Low ceiling heights place limits on its functionality for companies that require air handling systems or seek to maximize floor utilization by “cubing out” (stacking pallets vertically) finished goods, work in progress (WIP) or raw materials •Narrow column structure (8 foot distances between columns) essentially eliminates any type of facility that uses wider flow thru capacity equipment or cellular manufacturing techniques •Narrow and small floor plates with limited ability to maximize the length of the building due to the center stem of the building •The bulk of the square footage is vertical rather than horizontal creating the need to add additional moves between components of the manufacturing process between floors and lengthening the cycle time of the manufacturing process
  • Contemporary Building Typology
  • Pharma/Biomed
  • Typical building requirements for life science companies Note significant process development work is underway to reduce the amount of water consumed through single use technologies Single Floor Water Use Sewer Natural Gas Footprint Some pretreatment, 10-20ksft minimum use of neutralizationBasic Research with expansion 8-20000 gpd Required tanks capacity 10 to 20ksft minimumProcess Development Typically able to 20000 gpd Same as above Required expand to pilot plant Adequate public sewer capacity. Discharges Higher volume thanPilot Manufacturing 10 to 35ksft 2400 gph per 1000sft require kill systems and process development pH pretreatment Varies by process but planning model 1.5 million gpd per 100ksft Same as pilot withManufacturing At least 100ksft High volume manufacturing larger scale Also requires standby water system Much less thanFill & Finish 20ksft minimum Required manufacturingSource: MassBio
  • Prime industrial means the land is well located and viable for industry and is not easily replicable.• Net, contiguous, developable acreage in large, flat and symmetrical configurations;• Minimal or no development constraints present;• Access to an available workforce for a specific industry type;• Sufficient capacity in the local transportation system;• Proximity to interstate highways, rail, marine ports and/or airports;• Convenient access to water, sewer, gas, electricity and telecommunications;• Special considerations such as being free from encroachment of incompatible uses or needing high volumes of water and sewer or needing significant local transportation infrastructure;• Proximity to suppliers, customers, markets and related uses;• Location within a functioning industrial district;• The land is viable for the targeted industrial use.
  • Zoning by Use Categories• The Standard Industrial Classification (abbreviated SIC) is a United States government system for classifying industries by a four-digit code. Established in 1937, it is being supplanted by the six-digit North American Industry Classification System (NAICS code), which was released in 1997; however certain government departments and agencies, such as the U.S. Securities and Exchange Commission (SEC), still use the SIC codes.
  • Technology has made how to define manufacturing for purposes ofland use and zoning more interesting
  • New Industrialism• Impractical to list every Examples of Emerging Concepts and manufacturing use type Districts where Traditional Zoning May• Manufacturing operations to be Be Limiting multiple use clusters (Admin, Economic Strategies warehouse, distribution, laydown, inventory, research and Local food movement development Product design and development• One size fits all approach doesn’t Targeted Districts & Zones work Creative/arts districts – Does not accommodate technological changes Adaptive reuse districts – Discourages creative development Meds & Eds – Can hinder Economic Development – Overlooks performance attributes
  • Industrial Activity Transect• Traditional Heavy Industry that is transportation dependant• Warehouse , Distribution, and Fulfillment Centers• New and Emerging Manufacturing and R & D Uses• Vintage Industrial Areas
  • Industrial Performance Standards • Air Quality • Odor and Emissions (VOC’s, particulates) • Electro Magnetic • Lighting/Glare • Noise and Vibration • Water Usage available capacity • Wastewater generation (quantity and quality) treatment • Storm water Management • Energy • Carbon Generation • Bio Waste • Radiation • Solid Waste • Municipal special services • Traffic roadway impacts • Viewsheds • Sensitive abutters (residential, watershed, protected natural resources, acquifers/water supplies)
  • Green Buildings• Up to 90% of GHG from non stationary sources• Building Considerations – Insulation - point of diminishing returns – High Efficiency HVAC/Building Systems – Fenestration – Reflective Roofing – Solar Photo Voltaics – Roof water irrigation – Water saving plumbing fixtures – Motion activated lighting
  • Sustainable Site Planning Considerations• Realistic Parking Requirements - maximums as opposed to minimums• Low Impact Development techniques• Landscaping/Green space to break up “sea of pavement”• Waste Stream Management• Building Orientation• Transportation Demand Management• LED lighting• Native, drought tolerant landscaping materials
  • Workforce Challenges in Advanced ManufacturingThe workforce challenges are:Challenge 1: Increasing firm/facility competitiveness and employee employmentsecurity through incumbent workers’ skills upgrading:.Challenge 2: Responding to small and medium size firms’ and/or facilities’ (thosewith less than 500 employees) recruitment and training needs:Challenge 3: Meeting employer demand while minimizing the deleterious effects oflayoffs:Challenge 4: Assuring a pipeline of specialty-skilled workers:.Challenge 5: Integrating workers with limited English proficiency:Challenge 6: Maintaining the pipeline that channels young workers intomanufacturing:
  • Workforce Development and Training•Workforce training programs should be consolidated and coordinated into acomprehensive and adaptive system centered on the needs of regionaleconomic development and accountable for results. The workforce systemshould be easily understandable, accessible and responsive to the needs ofboth the business community and job seekers. Increased outreach andinvolvement of local communities and governments should be encouragedand supported.•Partnerships between government agencies, business, training providersand institutions of higher education should be strengthened andadministrative burdens and complexities reduced. In addition, the workforcesystem should continue to be led by the business community.•The expenditure of public funds supporting educational programs of studyand job training/workforce development for students in career and technicaleducation, unemployed workers, dislocated workers, trade-impactedworkers and separating military personnel should ensure such education andjob training result in attainment of nationally portable, industry-recognizedskills certifications as postsecondary credentials with value in the workplace.Source: National Association of Manufacturers
  • Industrial Land Conversion• Lack of suitable industrial land• Often converted to retail, commercial or multifamily residential• Inclusive (pyramid) zoning schemes versus exclusive zoning schemes
  • Adaptive Reuse Candidate
  • Demolition Candidate
  • Industrial Builidng Conversions
  • Automated Fulfillment Centers http://www.youtube.com/watch?NR=1&v= http://wiredbusinessconference.com/med
  • City of Portland, OR Industrial Sanctuaries• Industrial Sanctuaries limit uses to those that support manufacturing function and workforce – Use will not adversely affect industry or freight movement – Transportation system is capable of supporting proposed use in addition to existing uses – Proposed use will not alter the industrial character of the area – Proposed use needs to be located in an industrial area or building or because industrial firms or employees are primary market
  • Infill Brownfield Redevelopment South Worcester Industrial Park
  • Greenfield Development North Hatfield Technology Park
  • Alternative Energy/Landbanking