The Comeback of American Manufacturing by 2015

American Manufacturing has been leading the country out of the recession. Now every political leader is talking about the importance of the resurgence of American Manufacturing. But is the global environment already creating the circumstances for a resurgence in American Manufacturing? The answer is a resounding YES!!!!

In the Boston Consulting Group report, Why Manufacturing Will Return to the US (Aug 2011), they concluded that "around 2015 for many goods destined for North American consumers - manufacturing in some parts of the U.S. will be just as economical as manufacturing in China."

Here are the facts:

1. Wages: China’s wages rose 150% from 1999 - 2006, and 19% per year from 2006-2010. US worker’s fully loaded costs rose only 4% per year2)
2. Productivity: Manufacturing output per worker in China has improved by 10% a year over the last decade. Maintaining that growth over the next few years, China’s productivity would reach 40% of U.S. productivity by 2015: not enough to compensate for rising wages
3. Shipping: Transpacific shipping rates are going up
4. Currency: There’s been a steady appreciation of the Chinese renminbi against the U.S. dollar
5. Supply Chain Threats: Costs of relying on extended supply chains: quality control problems, the threat of supply disruptions, trades disputes, IP theft…

This is part of the balancing equation I reference in my book " The Consumer’s Workshop: The Future of American Manufacturing." Manufacturing will undergo a balancing equation settling on the optimal location between raw materials and customers.

The Information Technology & Innovation Foundation (ITIF) has developed The Charter for Revitalizing American Manufacturing built on four T's: technology, taxes, trade and talent.

• Technology is the key determinant of progress in today's world. We have a strong lead in R&D, but our competitors are chipping away at that lead, and our investment in R&D is declining.
• Our corporate tax system needs to be overhauled to reward long term investments in manufacturing and exports.
• Talent/Workforce needs to be trained to work in modern high-tech manufacturing.

But although some manufacturing may return to the United States, some of the jobs won’t be returning due to automation. Although 404,000 manufacturing jobs have been added since January 2010, there still are 5.5 million fewer manufacturing jobs than in July 2000 and 12 million fewer than in 1990. The long-term trend is fewer and fewer factory jobs, but a more productive manufacturing sector within the United States.

Thanks,

Ben Moore

President

Agent Technologies, Inc.

Planning for 2012

As 2011 comes to an end, it is time to begin planning for 2012. Currently the economy has added about 1.5 MM jobs n 2011 and the manufacturing sector has been growing for over 24
months. US manufacturers are cautiously optimistic.

Some of you won’t be planning for 2012… but hoping for 2012. The reason why I say HOPING is because some organizations will NOT put systems in place to get improved results and will do
the same things they did in 2011 but HOPE for different results.

If you want improved sales year after year, you need to put a system in place like a sales
contact management system/customer relationship management (CRM) system.

These systems allow you to:

• Track all of your Prospects in your Sales Pipeline
• Track Every Time One of Your Sales People Contacts a
  Prospect/Customer
• Track all Follow Up Tasks so Nothing Falls Through the
  Cracks

This allows your organization to:

• Sell More
• Shorten Your Sales Cycle
• Increase Your Average Sale

= INCREASED REVENUES !!!!

From the diagram above, companies with a CRM system average $256,087 per employee while companies without a CRM system average $178,542 per employee. That is 43% MORE SALES PER EMPLOYEE. Also, companies with a CRM system average $5,831,710 in annual revenue compared to $2,221,061 for companies without one. That is over 260% MORE SALES.

But one of the major takeaways is that a CRM system can help you increase your sales consistently year after year by as much as 43% per employee, if you fully leverage it.
Although we have our own CRM product, xRP, that we offer a FREE 30 day trial for, the best CRM system for any company...IS THE CRM SYSTEM YOU ACTUALLY USE.

Thanks,
Ben Moore
Agent Technologies, Inc.

US Manufacturing & the Debt Ceiling

On August 2, 2011 the United States is going to hit its debt ceiling of 14.3 Trillion dollars. However, there has been a good amount of political posturing in the Legislative Branch on a compromise of the spending cuts and revenue increases before the House of Representatives and Senate will pass an increase to the US debt limit. Without raising the US debt ceiling, the US would have to default on some of its obligations for the first time in history.

Treasury Secretary Timothy Geithner wrote: “A default would inflict catastrophic, far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment.”

The National Association of Manufacturers sent Congressional leaders a letter urging action to raise the federal debt limit. The letter stated, "With economic growth slowly picking up we cannot afford to jeopardize that growth with the massive spike in borrowing costs that would result if we defaulted on our obligations."

LORD Corporation, a US Manufacturer said, “America cannot afford to renege on its commitments, and LORD would not be in a position to add jobs if our country were to default on its loans. Assuming that there is a last-minute deal to raise the debt limit and avoid default, the terms of this deal will also have a direct impact on our ability to add jobs and remain competitive in the future.”

Larry Sloan, president of the Society of Chemical Manufacturers and Affiliates (SOCMA) stated “A less than stellar credit rating on our sovereign debt will trickle down to higher interest rates on everything from capital improvement loans to revolving credit." As a consequence, chemical companies and other industrial firms that depend on outside funding for capital improvements or major equipment purchases “could feel the brunt. Among other consequences, a US default or even a credit rating downgrade would put downward pressure on the US dollar. That might make US exports more competitive in foreign markets, Sloan noted, but it also would increase the cost of US imports, including for raw materials that many US chemical companies need. “The cost of raw material imports could far outpace any export boost resulting from a cheaper dollar, and profitability would suffer,” Sloan said.

Not raising the US debt ceiling would harm US Manufacturing, which has been leading the US Recovery out of the Great Recession.

Thanks,
Ben Moore
President
Agent Technologies, Inc.

CRM for Manufacturers (Part 2)

Last month we defined Customer Relationship Management (CRM) as a company wide strategy for delivering HIGHER PROFITS to your organization by:

1) Increasing Sales - Finding, attracting, and winning new clients
2) Increasing Sales - Nurturing and retaining existing clients
3) Increasing Sales - Enticing former clients back into the fold
4) Lowering Costs - By reducing the costs of marketing and client service

The promise of Higher Profits and Increased Sales is nice, but can we quantify that increase in sales?



From the diagram above, companies with a CRM system average $256,087 per employee while companies without a CRM system average $178,542 per employee. That is 43% MORE SALES PER EMPLOYEE. Also, companies with a CRM system average $5,831,710 in annual revenue compared to $2,221,061 for companies without one. That is over 260% MORE SALES.

When evaluating a CRM System, below are a couple of items to consider:

1) Contact Management - Tracking and Managing Every Contact and Its Information
2) Lead Management - Tracking Leads and Contacts through the Sales Process
3) Forecasting - Forecasting Potential Sales
4) Task Management - Managing Follow Up Tasks and To Do Items
5) Reporting - Automatic Reporting of Customer, Order and Management Metrics
6) Alerts - Alert Users of Tasks, Activities, etc.
7) Campaign Management - Creating and Managing Leads and Prospects Through Campaigns
8) Quota Management - Managing Sales Team to Individual Quotas/Territories
9) System Integration - Integrating with Other Business Systems (Financial, Operational, etc.)
10) Hosted/On-Premise - Is Solution Hosted (Off-Site) or On-Premise

These are just some of the items covered in my CRM for Manufacturers Seminar. For a copy of the handouts, just reply to this email requesting a copy.

But one of the major takeaways is that a CRM system can help you increase your sales consistently year after year by as much as 43% per employee, if you fully leverage it.
Although we have our own CRM product, xRP, that we offer a FREE 30 day trial for, the best CRM system for any company...IS THE CRM SYSTEM YOU ACTUALLY USE.

Thanks,
Ben Moore
Agent Technologies, Inc.

CRM for Manufacturers

CRM stands for Customer Relationship Management and is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments (Wikipedia Definition).

What does that mean? CRM means HIGHER PROFITS by:

1) Increasing Sales - Finding, attracting, and winning new clients
2) Increasing Sales - Nurturing and retaining existing clients
3) Increasing Sales - Enticing former clients back into the fold
4) Lowering Costs - By reducing the costs of marketing and client service

Why it is so important for manufacturing...because manufacturing in many cases has a complex sales process.



From the figure above, it shows the manufacturing sales process involving:

1) Understanding Customer Requirements
2) Developing a Solution
3) Incorporating Engineering
4) Developing a Manufacturing Process
5) Finishing with a Proposal as the Output

The proposal MAY or MAY NOT turn into an actual sale. This makes it critical to document all of the requirements, all learnings from interactions with the potential client, concerns in the engineering and manufacturing processes, any customer insight gathered over the months to years of the sales process and follow-up task reminders to give your organization the best chance of winning this project in a global environment.

Want to find our more about CRM for Manufacturers?Attend one of the FREE CRM for Manufacturers Seminars to learn:

1) Why manufacturing companies need CRM systems
2) How to evaluate CRM systems and learn what technology will be important for your company
3) How to fully leverage a CRM system in your organization

Date: 5/26/2011
Time: 9:00AM - 11:00AM
Location:
TechSolve
6705 Steger Drive
Cincinnati, OH 45237
Fee: Free
Register: Register

Date: 6/14/2011
Time: 8:30AM - 10:30AM
Location:
The Entreprenuers Center
714 East Monument Ave.
Dayton, OH 45402
Fee: Free
Register: Register

Thanks,
Ben Moore
President
Agent Technologies, Inc.

The Future of General Motors (GM)

Before we talk about the future of General Motors, we need to talk about the past. GM lost over 103 billion over the previous five (5) years.

On Friday July 10, 2009 a new company GMGMQ.PK arose from the GM bankruptcy proceedings with:

- U.S. Treasury owning 60.8%
- The Canadian and Ontario governments owning 11.7%
- The Union Retirees Healthcare Trust (VEBA) owning 17.5%
- Current Debt Holders could get as much as 10%

Below is the comparison from the OLD GM to the NEW GM.

OLD GM NEW GM
Debt 172.81 billion 11 billion
Brands
Chevrolet, Cadillac, Chevrolet, Cadillac,
Buick, GMC, Pontiac, Buick and GMC
Saab, Saturn and Hummer

Employees 91,000 (end of 2008) 64,000

Dealerships 6,000 (end of 2008) 3,600 (end of 2010)

US Factories 47 34 (end of 2010)


Through the bankruptcy proceedings GM received about $50 billion in tax payer funds, but now GM had its first profitable quarter in a while last year and had an Initial Public Offering (IPO) of the new company at $33 per share in Nov 2010. Although the share price went up to $40/share, it has since dropped to under $30/share. The US Treasury is considering selling its 500 million shares at a loss because in order to break even the sell price needs to be $53/share.

On the car front, although the Chevrolet Volt, GM’s electric hybrid vehicle, will cost nearly $40,000/unit and only expected to sell 10,000 units this year GM plans to double car sales in China by 2015.

In 2010, GM sold 2.35 million vehicles in China. They plan to sell 5 million vehicles in China by 2015.

China’s auto market is now the world’s largest with 13.7 million vehicles being purchased in 2010 compared to the 10-11 million vehicles being sold in the US in 2010.

GM also plans to roll out 60 new and upgraded models in China in the next five years, almost half of them Chevrolets and Buicks, GM China President Kevin Wale said.

Although the US tax payers may not recoup the $50 billion provided to GM nor the tens of billions in tax exemptions for the next 20 years, the future of GM is very, very bright.

Thanks,
Ben Moore
Agent Technologies, Inc.

Made in America

ABC News recently did a Made in America segment where they worked with a family to furnish three rooms (Kitchen, Bathroom and Living Room) exclusively with products that are Made in America. The findings were almost all items could be sourced from American companies at comparable prices to foreign competitors, except televisions; televisions were no longer manufactured in the US. Also, the findings were only high end Refrigerators and Stoves are still Made in America.

http://abcnews.go.com/WNT/video/world-news-made-america-challenge-groundbreaking-project-american-made-goods-12772486

Here are some of the facts:

• In 1960, foreign goods made up just 8 percent of Americans' purchases. Today, nearly 60 percent of everything we buy is made overseas
  
• 2010 US Imports were 1.935 trillion while 2010 US Exports were 1.3 trillion. This equates to $695.04/month per American Adults (232 million American Adults). While goods and services exports total about $517/month per American Adult. (Made in the USA Certified made the claim if each American Adult reduced their spending on foreign made products by $180/month we could eliminate our trade deficit)
  
• If every American spent an extra $3.33 on U.S.-made goods, it would create almost 10,000 new jobs in this country
  

Chart from Made in the USA Certified

These facts are spurring a new spirit of Economic Nationalism where Americans are seeing the current US trade deficit as unsustainable and the need to create more jobs in the US by purchasing more items Made in America and exporting these goods to the emerging middle classes all around the world.

Also, other trends positively impacting American Manufacturing are:

• Increase in Cost of Foreign Workforces while American Workforce Cost are Flat
  
• Companies Desire to be more responsive to customers (long lead times of manufacturing overseas)
  
• Cash Management – overseas orders have to be paid for before they are shipped and it may be 30 days before the products arrive in the US
  
• American Productivity – American Manufacturing has been able to produce more output with fewer workers due to automation and work processes.
  

For more on Reshoring – bringing Manufacturing Jobs back to the US: http://www.agenttech.com/newsletter/201008_Reshoring.html

For companies that are looking for ways to become even more productive, feel free to read my book – The Consumer’s Workshop: The Future of American Manufacturing or contact us to see if we can help.

Thanks,
Ben Moore
President
Agent Technologies, Inc.