Publisher’s note: CompanyWeek's regional coverage of the manufacturing economy will continue to expand in the coming months with particular emphasis on Utah. Recently we interviewed Todd Bingham, President of the Utah Manufacturers Association, to discuss Utah's manufacturing community and his efforts to facilitate connections among member companies.
Q: Describe the state of Utah manufacturing: is the sector poised for growth?
Yes. In the past ten years Utah manufacturing output has more than doubled, from around $8 billion in 2001 to nearly $20 billion now. We're bullish on growth here across several industry sectors.
Q: You've invested considerable time and energy in building the Utah Capabilities Assessment Network, or CAN, a tool to help connect manufacturers. What's happening in the sector that led to the effort?
Utah manufacturers have expressed interest and a willingness to source more of their contracts locally. I think we’re seeing the same thing here as we are nationally – companies eager to determine whether they can reduce costs, shorten lead times, and increase quality in their supply chains through more local partnerships.
The challenge is actually finding local, even regional, manufacturers or suppliers. What we find here is that many small and midsized manufacturers simply have limited networking channels to connect with larger companies.
As a result we believe CAN will be a useful tool to connect the community – especially as favorable market conditions bring more manufacturing onshore.
Q: How does the system work?
CAN’s a secure, online portal database system, which connects and aligns manufacturers by identifying capabilities, certifications, capacities and much more. The platform has the ability to fully search this information by any of these data elements, key words, industry segments or regions, NAICS codes, capacities, machinery, equipment certifications, etc.
This allows each manufacturer to search for in-state manufacturers who are looking for parts, components, processes, and sub-assemblies including specific processes, capacities, products, certifications, equipment, and key contacts.
Importantly, CAN also provides the ability to upload bids, communicate with other manufacturers as well as manage and track the bid process.
Q: For manufacturers, how much time is involved?
A company can literally input their data onto the site including processes, NAICS codes, equipment etc. in about an hour. Obviously, the more data they enter the more searchable they are to the other companies in the CAN. The companies can then simply update the data as needed. There is also a metric page being developed to assist the company in knowing who has hit their page and requested information about their company.
Q: Colorado's manufacturing trade is pursuing similar initiatives. One challenge has been to convince manufacturers of a return on the investment in time. Are you seeing positive outcomes?
We’ve certainly seen the concept in action. In our meetings to develop the CAN system, one of our large manufacturers was discussing a challenge about the lack of a local supplier for defense related antenna arrays. In the strategy and portal development meeting, a structural steel company said, ‘Hey, we can do that.' A $70M contract was the result.
At another meeting, another large defense contractor talked about their difficulty finding a local cable company. One of the team members said, 'wait, I know an outfit that does exactly that and has the necessary AS 9001 and NADCAP certifications.’ A substantial contract was the result.
To answer your question, yes, companies are beginning to input bids on the site as a means of locating companies capable of meeting their needs. I believe we’re starting to see the results we’d anticipated.
Q: How do you intend to keep the CAN initiative a priority for members?
Demonstrating success is key, but we’re confident we’ve developed a tool that will meet a need. Many companies are simply using firms elsewhere because they can’t identify or locate companies with the specific set of skills and qualifications to work with. They know the companies exist locally; they just don’t know where to find them.
Initially we thought that mostly smaller companies would want the system as way of pushing their company out to larger manufacturers. What we found was the large companies wanted the system as a pull type of system to locate suppliers and contractors locally.
Todd R. Bingham joined the Utah Manufacturers Association in May of 2012. Prior to UMA, he was the President of the Utah Mining Association. Reach him at firstname.lastname@example.org.