Succeeding in a Tough Market

Though experienced in the world of metal-cutting production, my entrance into the world of die mold and EDM technologies has been an eye-opening adventure, primarily due to the things I’ve learned about this fascinating market.

Recently, I have been visiting Makino’s local technical centers, distributors, and customers all over North America in an effort to understand the dynamics of a market that has been shrinking for the last 10 years. Taking customers to Japan twice allowed for some valuable one-on-one conversation, identifying needs, wants, goals, and concerns.

It is true the traditional die mold and EDM markets have been shrinking due to outsourcing to low-cost manufacturing countries. North American die mold companies that have diversified and specialized into fields that require expert knowledge, manufacturing to close tolerances, and processes that cannot easily be duplicated are the ones that have survived the exodus. These shops have found ways to be more efficient by streamlining their processes and have often implemented lights-out manufacturing with automation and production planning. In a nutshell, they have invested in state-of-the-art technology, even when times were tough, and as a result do well in today’s market.

What Does Today’s Market Look Like?

The media has been talking about a recession for almost two years, and we see every day what happens in the housing market, with oil prices, and with the car makers. But what about the die mold and EDM industry? What about the manufacturing sector in general?

Let’s shine some light on some factors that influence our business, starting with the U.S. dollar at an all-time low for several years, compared to foreign currencies. This makes the United States a low-cost manufacturing country with a highly skilled workforce, strong manufacturing infrastructure, a stable government, and a culture that is easy to do business with. Our customers are reporting increased quoting activities to European companies. Companies that have invested in Asian manufacturing sites before are now forced to manufacture in North America in order to sell their products here.

The second factor that is driving our local manufacturing recovery in the die mold and EDM market is high oil prices, and subsequently the logistics cost of transporting goods for import into North America. Container shipping cost has more than doubled in the last five years. We might complain about high gas prices today, but the future could hold higher overall prices due to this factor.

Looking at the glass half full, I say we have great opportunities in manufacturing—to be part of the next generation of fuel-efficient vehicles and airplanes—with new, super-efficient power trains—all translating to more work for the die mold and EDM markets.

The last factor I would like to discuss is our North American workforce. Wherever I traveled over the last year the common complaint is: “We would like to hire but we can’t find good people.” Everything I’ve seen gives me the impression that we have many highly educated people with hands-on experience already in our business, yet the need is for more. This tells me that our market is growing, providing us the opportunity to take the bull by the horns to promote this fascinating industry with the next generation, giving these newcomers the opportunity to learn about it.

If we don’t fill the trade-school funnel now, we will still be complaining in 10 years, and the situation will only get worse as baby boomers retire. To do this, we must change the perceived “sweatshop” image of manufacturing to what it really is today—state-of-the-art manufacturing that utilizes technologies such as CNC machining, CAD/CAM systems, clean rooms, metallurgy, tooling, and robotics.

I walked my kids through one of Makino’s technical centers recently and showed them parts ranging from automotive lenses to medical implants, micro parts that they can hardly see, and hundreds of other parts that made their eyes light up with curiosity. What we do is interesting to young minds, and we must do our part for history by taking on the challenge of developing the next generation of manufacturers.

In summary—yes, we have hard times in various sectors of the financial market, we have higher energy prices, higher logistics cost, regionally high unemployment rates—but I don’t believe we have a recession in the manufacturing sector. And rather than being frozen due to the media frenzy and what the future might bring, I suggest we take the opportunity that presents itself now and work together to be a state-of-the-art technology leader.

Profile: Andre Ey

Andre Ey (pictured at top right) has served the manufacturing industry for 18 years, taking on various positions ranging from global sales and marketing to senior executive. He earned his MBA from Michigan State University in 1996, and holds a BS in mechanical and manufacturing engineering.

“I’m excited to work with Makino’s world-renowned engineers and technology,” said Ey. “In the coming years, I hope to further Makino’s strength in the die/mold market, bringing a hands-on approach to the business.”

With executive positions held in two top 10 global companies, Ey’s performance has demonstrated an ability to create and execute strategic plans and drive business growth. Previous employers have praised him for leading by example, helping in team decision-making, and achieving high organizational performance.

“We were impressed with Andre’s strong visionary, organizational, and analytical skills,” said Don Lane, CEO of Makino. “His experience and abilities with broad international sales, marketing, strategic planning, and program management experience will serve Makino well.”