Thank you to our sponsorJoin the Conversation #MassEconAC
Barry BluestoneDirectorDukakis Center for Urban and Regional PolicyMassEcon Annual Conference“Manufacturing Transformed”Ju...
Massachusetts Manufacturing Employment(in thousands) January 2007–December 2009Source: U.S. Bureau of Labor Statistics298....
Massachusetts Manufacturing Employment(in thousands, seasonally adjusted)January 2008-June 2012Source: U.S. Bureau of Labo...
Massachusetts Employment by Sector(in thousands) June 2012Source: Massachusetts Executive Officer of Labor and Workforce D...
Share of Massachusetts Payroll (2011:3rd Quarter)Top 4 SectorsEmploymentSectorTotalEmploymentPercent ofMassachusettsWorkfo...
Top Ten Manufacturing Industries inMassachusetts (2010)4-Digit Industry (2010) EmployeesNavigation, measuring, medical, an...
Productivity in MassachusettsAll Industries vs. ManufacturingProductivity1997-2007Annual GrowthRate2007-2011Annual GrowthR...
Proportion of WorkforceAge 45 or Older40.5%49.6%53.9%36.1%41.4%44.6%0.00%10.00%20.00%30.00%40.00%50.00%60.00%2000 2006 201...
Expected Production Levels of Massachusetts ManufacturingFirms over the Next Five Years (2012 - 2017)Source: Dukakis Cente...
5 Year Employment Projections of MassachusettsManufacturing Firms (2012 – 2017)Source: Dukakis Center Manufacturing Survey...
Conclusions• Manufacturing is alive and well in theCommonwealth and has a healthy future• Closer cooperation between train...
2013 MassEcon ConferenceDavid GarrisonChief Financial Officer
Brief History• Founded in 1972 to coat plastics with Silver.• 90’s World leader in EP Sensors for use inMedical Devices (o...
Providing Manufacturing Solutions Innovative Custom Plastic Injection Molding Contract manufacturing in the Medical, Def...
Made in the USA Export to 36 countries Manufacturing withsupply, and researchpartnerships across the globe. Over 1,300 ...
Our VisionProvide an integrated manufacturing solution that exceeds thecomplex needs of the global economy.Provide an inte...
© 2012 Kiva Systems, Inc.MassEcon Annual ConferenceJune 21, 2013Kiva Systems
Company Background Founded 2003 in Woburn, MA First commercial customer in 2006 (Staples) Focused on fulfillment and di...
Manufacturing at KivaKiva Systems, Inc. - Confidential6/21/2013 20 All final assembly takes place on site Scaling to mas...
 Talent pool is strong for fast growing companies Local suppliers take a true partnership approach Manufacturing in MA ...
Thank You!6/21/2013 Kiva Systems, Inc. - Confidential 22
MASSECONANNUALCONFERENCEJUNE 2013CHRISTOPHER PERLEYSENIOR VICE PRESIDENT DYAX CORP.JUNE 21, 2013
Two Pillars of Dyax Corp.24KALBITOR® (ecallantide)DX-2930Biomarker assaysLibrary LicensesClinical Stage Product Candidates...
Hereditary Angioedema Profile25• Rare, genetic disease characterized by unpredictableepisodes of severe, painful swelling•...
Dawn of Biotech ManufacturingProduction of recombinant DNA therapeutic proteinsAutomobileAspirinPenicillinIntegrated Circu...
Biotech ManufacturingThe Past 30 Years• Nascent industry characterized by rapid learning and evolution (processtechnology,...
What’s Next for Biotech Manufacturing?• Biotech manufacturing industry is maturing• Technology converging and stabilizing•...
Production in the Innovation Economy:Findings and OverviewMassEconAnnual ConferenceJune 21, 2013Elisabeth B. ReynoldsDirec...
From Made in America to Made All Over1980s TODAYVertically-integrated firmsIntegrateresearch, development, design, product...
PIE Summary Findings• Manufacturing matters for innovation• Innovation is not just about patents; a hidden wealth ofinnova...
Critical Case of 150 Production FirmsStarted with MIT Licensed Technology (1997-2008)10%39%21%3%17%10%AdvancedMaterials an...
Scaling Innovative Companies in the US:Robust Innovation Ecosystem at the Early Stages• Capital Available for Up to 10 Yea...
Search for Complementary AssetsLeads Firms Overseas• Significant influx of new capital required to reachcommercial scale– ...
Implications of this Shift Abroad• Critical moment in firm’s growth– “Inflection band” of 2-3 years– Knowledge is loosely ...
TraditionalManufacturing(20th century)raw materialsfrom natureparts finishedproductsFabrication AssemblyAdvancedManufactur...
Seven key manufacturing technology categorieswill dramatically affect advanced manufacturingproducts and processesMaterial...
Thank you to our sponsorJoin the Conversation #MassEconAC
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Annual Conference: Manufacturing Transformed 6/21

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Panelists in order of presentation:
Barry Bluestone, Founding Director, Dukakis Center, Northeastern University
David Garrison, CFO, Micron Products
Amy Villeneuve, President and COO
Chris Perley, Senior Vice President, Dyax Corp.
Elisabeth Reynolds, Executive Director, MIT Industrial Performance Center


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  • Figure 1.1
  • Figure 1.2
  • Figure 1.4
  • Table 1.12
  • Table 1.4A
  • Table 1.7, continued
  • Table 1.15 turned into bar chart
  • Figure 6.1
  • Figure 6.2
  • Would like a. advice, and b. support
  • This chart summarizes the status of PIE and what we intend to do in the near future. We expect a final report and book in June 2013.
  • Complex technologiesMore likely to succeed
  • The insights we are gaining in module 1 lead us to a much broader definition of what we mean by advanced manufacturing. Traditional manufacturing is shown above and consists of fabrication and assembly and the making of physical artifacts. A broader definition of advanced manufacturing allows us to categorize the promising technologies into 4 areas: material design and synthesis, blurring the boundary between fabrication and assembly, not just for discrete products but also in chemicals and pharmaceuticals. Smart automation also affects this step greatly. Thirdly the products is often not just a physical artifact or widget but an integrated solution that involves bundling of physical products with services and software. Finally the 4th trend is the reuse of recycled materials back to fabrication or even material synthesis. This is a much enhanced vision of what we mean by advanced manufacturing. Read the definition in the red box.
  • Annual Conference: Manufacturing Transformed 6/21

    1. 1. Thank you to our sponsorJoin the Conversation #MassEconAC
    2. 2. Barry BluestoneDirectorDukakis Center for Urban and Regional PolicyMassEcon Annual Conference“Manufacturing Transformed”June 21, 2013
    3. 3. Massachusetts Manufacturing Employment(in thousands) January 2007–December 2009Source: U.S. Bureau of Labor Statistics298.2291.6289.2252.7220230240250260270280290300310Jan-07Feb-07Mar-07Apr-07May-07Jun-07Jul-07Aug-07Sep-07Oct-07Nov-07Dec-07Jan-08Feb-08Mar-08Apr-08May-08Jun-08Jul-08Aug-08Sep-08Oct-08Nov-08Dec-08Jan-09Feb-09Mar-09Apr-09May-09Jun-09Jul-09Aug-09Sep-09Oct-09Nov-09Dec-09-36,500 jobs
    4. 4. Massachusetts Manufacturing Employment(in thousands, seasonally adjusted)January 2008-June 2012Source: U.S. Bureau of Labor Statistics290.8252.7250.4220230240250260270280290300Stable employment sinceNovember 2009 … despiteGreat RecessionDecember 2012: 249.3April 2013: 250.0
    5. 5. Massachusetts Employment by Sector(in thousands) June 2012Source: Massachusetts Executive Officer of Labor and Workforce Development, CurrentEmployment Statistics (CES 790 Series), July 2012.38.242.646.758.485.985.9102.2121.4123.5125.1158.2165.8172.1250.4260.4267.6269.3350.6514.90 100 200 300 400 500 600Real Estate and Rental & LeasingArts, Entertainment, and RecreationFederal GovernmentManagement of Companies and EnterprisesTransportation, Warehousing, & UtilitiesInformation ServicesConstructionOther ServicesState GovernmentWholesale TradeEducation ServicesFinance & InsuranceAdministration & Support ServicesManufacturingLocal GovernmentAccommodation and Food ServicesProfessional, Scientific and Technical ServicessRetail TradeHealth Care & Social Assistance6th Largest Employer inthe Commonwealth
    6. 6. Share of Massachusetts Payroll (2011:3rd Quarter)Top 4 SectorsEmploymentSectorTotalEmploymentPercent ofMassachusettsWorkforcePercent ofMassachusetts TotalPayrollHealth Care 532,934 16.6% 15.3%Retail Trade 344,751 10.8% 5.3%Education 282,818 8.8% 8.7%Manufacturing 254,300 8.0% 10.1%Source: Massachusetts Office of Labor and Workforce Development, Employment and Wageshttp://lmi2.detma.org/lmi/lmi_es_asp#IND_LOCATION
    7. 7. Top Ten Manufacturing Industries inMassachusetts (2010)4-Digit Industry (2010) EmployeesNavigation, measuring, medical, and control instruments 26,139Semiconductor and other electronic components 17,022Printing and related support activities 12.532Computer and peripheral equipment 12,253Aerospace product and parts 11,978Plastics products 11,309Medical equipment and supplies 10,759Machine shops, turned product and screw, nut & bolt 9,957Bakeries and tortilla 9,356Pharmaceutical and medicine 9,136Source: Massachusetts Department of Labor and Workforce Development, ES-202 Employmentand Wage Statistics
    8. 8. Productivity in MassachusettsAll Industries vs. ManufacturingProductivity1997-2007Annual GrowthRate2007-2011Annual GrowthRateGSP/Worker – Private Sector +2.3% +1.7%GSP/Worker - Manufacturing +9.7% +8.7%Source: U.S. Bureau of Economic Analysis (Updated June 5, 2012 with revised estimates for 1997-2010) (Gross State Product (GSP) is in $millions of chained (real) 2005 dollars)
    9. 9. Proportion of WorkforceAge 45 or Older40.5%49.6%53.9%36.1%41.4%44.6%0.00%10.00%20.00%30.00%40.00%50.00%60.00%2000 2006 2010Manufacturing All other industriesSource: American Community Survey, Public Use Files, 2006, 2010, Tabulations by Center for Labor MarketStudies and Dukakis Center for Urban and Regional Policy, Northeastern University
    10. 10. Expected Production Levels of Massachusetts ManufacturingFirms over the Next Five Years (2012 - 2017)Source: Dukakis Center Manufacturing Survey, 2012Continuedproduction atincreased levels65.4%Continued productionat currentlevels, 24.4%Continued productionbut at reducedlevels, 7.7%Cessation ofproduction inMassachusetts, 2.5%
    11. 11. 5 Year Employment Projections of MassachusettsManufacturing Firms (2012 – 2017)Source: Dukakis Center Manufacturing Survey, 2012Expansion ofMassachusettsEmployment by >25%13%Expansion ofMassachusettsEmployment by 11-25%22%Expansion ofMassachusettsEmployment by 1-10%35%Maintenance of CurrentEmployment Levels23%Reduction ofMassachusettsEmployment by 1-10%4%Reduction ofMassachusettsEmployment by 11-25%1%Reduction ofMassachusettsEmployment by >25%2%70% of manufacturersexpect to increaseemployment over the next5 years
    12. 12. Conclusions• Manufacturing is alive and well in theCommonwealth and has a healthy future• Closer cooperation between traininginstitutions and manufacturing can fulfill thesector’s need to replace an aging workforce• Continuing to promote the industry will helpsecure the Commonwealth’s prosperity foryears to come
    13. 13. 2013 MassEcon ConferenceDavid GarrisonChief Financial Officer
    14. 14. Brief History• Founded in 1972 to coat plastics with Silver.• 90’s World leader in EP Sensors for use inMedical Devices (over 1.5 Billion annually)• 2000’s Diversified through acquisition– Custom Injection Molding– Manufacture of Molding Tools• 2008 Expanded into Orthopedic Implants
    15. 15. Providing Manufacturing Solutions Innovative Custom Plastic Injection Molding Contract manufacturing in the Medical, Defense, & Automotiveindustries using the latest in automation and robotics. Specializing in highly complex products and materials. Mass Customization of Patient Specific Orthopedic Implants Full cycle production of cobalt-chrome, titanium, and plastic kneeimplants. Patient specific implants – each implant is one of a kind. Design & Engineering Services On-site Production of Tooling for the manufacturing processes. Rapid Prototyping & 3D Printing – Plastic or Wax for Metal Casting
    16. 16. Made in the USA Export to 36 countries Manufacturing withsupply, and researchpartnerships across the globe. Over 1,300 partners &customers worldwide. All operations at ourFitchburg, Mass headquartersSelling Solutions WorldwideMicron’s shop floor has a flagrepresenting each country we sell to.
    17. 17. Our VisionProvide an integrated manufacturing solution that exceeds thecomplex needs of the global economy.Provide an integratedproduct offering:• shorten lead times• lower costs• increased qualityEngineering expertise to driveour customer’s productinnovations with robustmanufacturing solutions.Industry Leadershipwith product innovationTo satisfy our customersbeyond expectationsStrategies Core Competencies Values
    18. 18. © 2012 Kiva Systems, Inc.MassEcon Annual ConferenceJune 21, 2013Kiva Systems
    19. 19. Company Background Founded 2003 in Woburn, MA First commercial customer in 2006 (Staples) Focused on fulfillment and distribution operations #6 Fastest Growing company in US (Inc. magazine) Installations in US, Canada, UK, and NetherlandsKiva Systems, Inc. - Confidential6/21/2013 19
    20. 20. Manufacturing at KivaKiva Systems, Inc. - Confidential6/21/2013 20 All final assembly takes place on site Scaling to mass production Our 5S+1 and lean approach areingrained into our culture Continuous improvements are partof the process Professional development is apriority
    21. 21.  Talent pool is strong for fast growing companies Local suppliers take a true partnership approach Manufacturing in MA has a cool factor Low cost country sourcing has its challengesKiva Systems, Inc. - Confidential6/21/2013 21The Benefits of Manufacturing in Massachusetts
    22. 22. Thank You!6/21/2013 Kiva Systems, Inc. - Confidential 22
    23. 23. MASSECONANNUALCONFERENCEJUNE 2013CHRISTOPHER PERLEYSENIOR VICE PRESIDENT DYAX CORP.JUNE 21, 2013
    24. 24. Two Pillars of Dyax Corp.24KALBITOR® (ecallantide)DX-2930Biomarker assaysLibrary LicensesClinical Stage Product CandidatesRoyalties/MilestonesANGIOEDEMA PORTFOLIO LICENSING PROGRAMDyaxs mission is to discover, develop, and commercializeinnovative biopharmaceuticals for unmet medical needs
    25. 25. Hereditary Angioedema Profile25• Rare, genetic disease characterized by unpredictableepisodes of severe, painful swelling• Attacks can affect abdomen, face, larynx and/orextremities• KALBITOR® (ecallantide): a treatment for acutehereditary angioedema (HAE) attacks• Expanding the KALBITOR business beyond the U.S.• Developing DX-2930 for prophylaxis• Advancing biomarker assays
    26. 26. Dawn of Biotech ManufacturingProduction of recombinant DNA therapeutic proteinsAutomobileAspirinPenicillinIntegrated CircuitBiotechYears1973: Cohen Boyer patent: first rDNA organism created1982: FDA approves first rDNA therapeutic protein: Insulin
    27. 27. Biotech ManufacturingThe Past 30 Years• Nascent industry characterized by rapid learning and evolution (processtechnology, production equipment and systems, qualitycontrol, government regulation)• Today, Massachusetts a top-tier Global Center of Excellence in biotechmanufacturing• Above companies joined by Amgen, BMS, Lonza, and Shire• Seven of the top ten selling drugs in 2012 were biotech, with combinedsales of > $50 Billion27• Massachusetts companies were among the early pioneers of biotechmanufacturing in the 1980’s• BASF, Worcester (acquired by Abbott, now spun off as AbbVie)• Biogen, Cambridge (now Biogen Idec)• Genetics Institute, Andover (acquired by Wyeth, now Pfizer)• Genzyme, Allston/Cambridge (acquired by Sanofi)
    28. 28. What’s Next for Biotech Manufacturing?• Biotech manufacturing industry is maturing• Technology converging and stabilizing• Biosimilars leading to commodities• Industry is beginning to move to low-cost regions of the globe• In the next decade, Massachusetts companies must move onto next generation of biotech products, where innovation iscritical• It’s happening. ~10 Massachusetts companies in each area:• Interference RNA• Gene therapy• Stem cell therapy28
    29. 29. Production in the Innovation Economy:Findings and OverviewMassEconAnnual ConferenceJune 21, 2013Elisabeth B. ReynoldsDirector, MIT Industrial Performance Center
    30. 30. From Made in America to Made All Over1980s TODAYVertically-integrated firmsIntegrateresearch, development, design, production and marketing to promoteinnovation, quality and efficiencyLocate core firm activities close tolead customers and best suppliersto promote JIT & mutual learningCore-competence firmsMassive fragmentation ofproduction systemsFunctions distributed between‘home’ societies and ‘host’ societies(globalization)Networks of production chains linkbrands, product definition anddesign, contractmanufacturers, assemblers, distributors, retailers30
    31. 31. PIE Summary Findings• Manufacturing matters for innovation• Innovation is not just about patents; a hidden wealth ofinnovation in product, process, and business organization• High-value manufacturing connects inseparably to services.• Where manufacturing locates matters: clusters and the“ecosystem” drive capabilities• “Not-invented-here” is a costly error: we can learn fromGermany and China• It takes collaboration between industry and schools to buildskills• There’s transformative manufacturing technology on thehorizon but technology in itself does not build capabilities 31
    32. 32. Critical Case of 150 Production FirmsStarted with MIT Licensed Technology (1997-2008)10%39%21%3%17%10%AdvancedMaterials andEnergyBiopharmaMedicalDevicesRoboticsSemiconductors andElectronicsBy Industry By Current Status59%20%21%Operating Closed32
    33. 33. Scaling Innovative Companies in the US:Robust Innovation Ecosystem at the Early Stages• Capital Available for Up to 10 Years• Thick Labor Markets:• Need access to diverse “high intellect” talent• Easy to find for prototyping and pilot phases• Networks Matter• Key individuals deliver resources• Thick Supplier Markets• Range of suppliers with an emphasis on speed and quality• “We kept eight machine shops busy for two weeks at fullcapacity getting a system ready.”33
    34. 34. Search for Complementary AssetsLeads Firms Overseas• Significant influx of new capital required to reachcommercial scale– $30 - 60 million– “VCs cannot make any money on something thatcosts $100 million and takes at least 10 years tobuild.”• Strategic partners and foreign governments providecomplementary assets– “When [the company] transitions from the normal VCmodel, there is no other model to jump to, so they goabroad.”34
    35. 35. Implications of this Shift Abroad• Critical moment in firm’s growth– “Inflection band” of 2-3 years– Knowledge is loosely codified;– Process of “learning by building” inmanufacturing for scale up• Financing, capabilities and customers/suppliers pulltechnology development abroad– Demand offers opportunity to iterate ontechnology– Reinforced by aggressive public policies35
    36. 36. TraditionalManufacturing(20th century)raw materialsfrom natureparts finishedproductsFabrication AssemblyAdvancedManufacturing(21th century)raw materialsfrom natureparts finishedproductsFabrication AssemblyMaterialDesignsyntheticmaterialsBundlingIntegratedsolutionsservicessoftwarecontinuousRecyclingrecoveredmaterialsWhat is Advanced Manufacturing?Advanced Manufacturing is the creation of integrated solutions that requirethe production of physical artifacts coupled with valued-added services andsoftware, while exploiting custom-designed and recycled materials usingultra-efficient processes.Source: Prof. Oli De Weck, PIE Commission36
    37. 37. Seven key manufacturing technology categorieswill dramatically affect advanced manufacturingproducts and processesMaterialDesignsyntheticmaterialsBundlingIntegratedsolutionsservicessoftwarecontinuousRecyclingrecoveredmaterialsraw materialsfrom natureparts finishedproductsFabrication AssemblyAdditive andPrecision MfgMaterials &Nano-TechnologyGreen / SustainableManufacturingRoboticsAutomationAdaptabilityAdvancedElectronicsSupply ChainDesignPharmaceuticalsBio-manufacturingSource: Prof. Oli De Weck, PIE Commission37
    38. 38. Thank you to our sponsorJoin the Conversation #MassEconAC

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