San Diego Celebrates Manufacturing Week, not Just Manufacturing Day

To highlight the importance of manufacturing to the economy of the San Diego region, the Mayor and City Council declared the week of September 30 – October 5, 2014 to be Manufacturing Week instead of only Manufacturing Day on October 3^rd.

One of the highlights of the week was an all day Workforce Conference held on October 2nd put on by the San Diego Workforce Partnership and the San Diego and Imperial Counties Community Colleges Association Regional Consortium. The conference presented a summary of a detailed research report conducted by these two organizations of each of the sectors that are vital to the regional economy. San Diego’s five priority sectors are:

Life Sciences
Health Care
Clean Energy
Information & Communication Technologies
Advanced Manufacturing

More than 250 businesses were surveyed for the report, and industry associations and organizations with industry expertise also contributed to the study. The results of the study can be used to help these priority sectors, which are experiencing rapid growth and projected skills shortages, conduct workforce planning and management of resources. The conference presentations included an overview of the research findings and panel discussions with industry experts and employers.

Since my interest in these sectors is limited to manufacturing, I only attended the session on advanced manufacturing, presented by Dr. Mary Walshok, dean of UC San Diego Extension. Describing San Diego's manufacturing industry, she said, "It ain’t your old assembly line manufacturing. It’s about a network of suppliers. It’s about organizations that are prototyping and doing R & D on site…I think the moniker for San Diego should be drones, phones and genomes ... Let’s add to that surfboards, skateboards, and golf equipment."

Key data presented was the fact that "The advanced manufacturing sector accounts for 10% of all establishments, 15% of all paid employment and 22% of all annual payrolls" in San Diego County. The fact that the "sector is dominated by small-to-medium-sized businesses with 82% of firms employing less than 20 employees" confirmed my more than 30 years experience in San Diego's manufacturing industry.

Utilizing a broader definition of what constitutes manufacturing, the report listed the manufacturing employment at 170,800 in contrast to the California Economic Development Department total of 96,900 manufacturing jobs in San Diego in August 2014, an increase of 2,200 manufacturing jobs since August 2013. The report projects a 6% increase in manufacturing jobs by 2018 for a total of 180,700 jobs.

The advanced manufacturing sector is no longer dominated by any one industry like it was 20 years ago when aerospace/defense was the dominant industry. Now, it is comprised of diverse industries in which no industry has more than 13% (electronic equipment and components). Aerospace/defense has dropped to 11%, and the fabricated metal products industry comes in a close third at 10%. Industrial/commercial machinery and computer equipment represents 8% of the industry, and signs and advertising specialties represents 6% of the sector. I was surprised that biotechnology only represents 5%, when San Diego is ranked third in the nation as a center of the life science industry sector after Greater Boston and the San Francisco Bay area.

Advanced Manufacturing's Workforce Challenges

The report states, "Most advanced manufacturing occupations require high school education at a minimum. Moving up the career ladder requires on-the-job experience or more academic credentials, some are provided by 2-year or 4-year colleges. Many occupations require a specific set of skills for their workers, which can be acquired with an education credential. There are certain educational credentials that can be applied to multiple occupations."

The study revealed the four occupational clusters that are most commonly employed in advanced manufacturing:

Engineers
Computer/Software
Drafters and technicians
Production

The drafter category has morphed into people with expertise in Computer-Aided Design and 3D modeling skills instead of traditional hand-drawn drafting skills.

The top five occupations that have a gap in the supply of workers produced by the region’s educational institutions compared with the number of available job openings are:

Software developers, applications and systems software
Assemblers and fabricators
Aerospace engineers
Computer user support specialists
Machinists

The report goes into specific detail about the skill sets needed for each of the above occupations. To address this gap in the supply of workers with the requisite skills, the following recommendation are made:

“Inform the public about the skills and levels of compensation in the advanced manufacturing sector.
Develop an advanced manufacturing talent pipeline.
Increase employer knowledge about business assistance programs for workforce training.
Add an internship and/or work experience requirements to education and training programs.
Encourage critical thinking and real world application in education and training programs.
Standardize certifications and articulation agreements.”

Dr. Trudy Gerald, deputy sector navigator for Advanced Manufacturing at San Diego City College, moderated a panel that included two manufacturing representatives: Nancy Boessow, HR manager for Johnson Matthey Medical Components and Rick Urban, COO and CFO of Quality Controlled Manufacturing, Inc., a leading precision machining manufacturer of complex components and assemblies for the aerospace, defense and energy industries.

Joining the panel was Jo Marie Diamond, president and CEO of the East County Economic Development Council and newly appointed as the region's representative on the executive board for the Advanced Manufacturing Partnership – Southern California, one of only 12 federally designated Investing in Manufacturing Community Partnership (IMCP) consortia and the only one west of the Mississippi. Diamond said the advanced manufacturing sector has an aging workforce so, "We're going to have to fill that pipeline [with training and education]."

There has been a shortage of skilled machinists, especially lathe operators for the past 15 years, and since I have discussed this issue with Urban, I am aware of what his company is doing with regard to training. The company’s website states, "QCMI needed to establish an Education / Training Competitive Workforce Initiative. The QCMI WEA winning initiative includes: a mentoring program for entry-level employees; promotion and training from within; partnering with high schools and colleges; and the creation of a nonprofit academy." The academy training and apprenticeship program began earlier this year with a curriculum that took a year to develop.

At the conference, he stated, "We’re going to do a lot of training…The people that come in at an entry level position are allowed to stay there for six months. They have to move up or it doesn’t make sense because we have to keep that pipeline going."

The conference was well attended by people within the five industry sectors, as well as those seeking to make career transitions or improve their skills, career counselors, trainers and educators. The presentations and panelists provided a complete picture of what employers are looking for in the current and future labor force and set the stage for the events that followed on Manufacturing Day.

Manufacturing Day began with a breakfast at the new central library in downtown San Diego organized by the San Diego Regional Economic Development Corporation. President and CEO Mark Cafferty and Congressional Representatives Susan Davis and Scott Peters gave introductory remarks welcoming attendees, and then Jack Stewart, president of the California Manufacturers and Technology Association, moderated the following panel of local manufacturers that represent a cross-section of San Diego's diverse industries:

Bob Cassidy, senior director of Operations, ViaSat – producer of satellite and other digital communication products for the commercial and government sectors
Guillermo Romero, general manager, 3D Robotics' plant in Tijuana – producer of miniature commercial unmanned aerial vehicles (drones)
Kevin Graney, vice president and general manager, General Dynamics NASSCO – shipbuilding of Naval and commercial ships and tankers
Carlos Nunez, COO, Care Fusion – producer of infusion, interventional procedures, medication and medical supply management, respiratory care and surgical products.
Dave Klimkiewicz, co-founder of Sector 9 skateboards

Education Must Retool for Manufacturing

Stewart remarked: "Manufacturing was the industry on the outs. Service industries aren't creating the good paying jobs…This isn't your father's factory floor anymore…Now manufacturing is new, high tech, and robotic…Just as manufacturers have retooled their operations to be more efficient, more clean, more innovative, the universities, community colleges, the high schools must retool their education systems." He added, "Advanced manufacturers in California have to be the cleanest, the best, cut costs, and improve productivity."

Each panelist gave a brief overview of their company's products and services, and then took turns answering questions posed by the moderator. With regard to finding qualified workers, their comments corroborated the comments of the panelists the previous day at the Workforce Partnership conference.

Cassidy said: "We have a very stable workforce with very low turnover, but it's an aging population, especially on the electro-mechanical team…We need more with solder training and wireless technician certificates."

Graney said they have the largest backlog in their history and are hiring anyone who can fit or weld. "We end up training everybody that basically comes in the gate," he said. "We’ve got eight weeks to develop a fitter or welder, before they're out on the production run. We have had really only frankly limited success doing it any other way." He added that they are making data available electronically to their welders at their workstations, and their painting process has reduced 90% of emissions.

All of the panelists made comments about how high schools need to get back to basics, including computer skills and technical training in wood shop, auto shop, and metal shop for those not going to college. Mr. Nunez said that STEM education needs to be supplemented with hands-on projects, such as ones using a Raspberry Pi [A breadboard device for prototyping circuits].

In answer to the moderator's question about what are the benefits of bi-national manufacturing, Nunez said that the majority of the manufacturing for their infusion pumps and tubing takes place in Tijuana and Mexicali. Romero said that most of their SKUs are made in Tijuana, and the close proximity allows their engineers to visit the plant in the morning. He said, "It's important to buy the right equipment and hire the right people.”

The panelists touted San Diego's collaborative effort among businesses and organizations, as well as opportunities created by the region's proximity to Mexico. They also commented on the higher costs of doing business in California compared with other regions.

After the breakfast ended, I went on three tours out of the more than 25 tours offered in the San Diego region's manufacturers. First, I visited D & K Engineering in Rancho Bernardo. D&K Engineering was started in 1999 by Scott Dennis and Alex Kunczynski as an engineering design and product development firm that evolved into providing contract manufacturing services for such companies as ecoATM and Retail Inkjet. D & K offered tours every half hour from 11 AM – 3 PM and 10 people were allowed on each tour. Besides business people, there were one mother and her pre-teen, home-schooled son and daughter on my tour.

Next, I visited Alphatec Spine in Carlsbad that makes implants made from PEEK and Titanium used in spinal surgery and reconstruction. My last stop was a mixer sponsored by the California Manufacturing Technology Consulting and the City of Santee at one of our many microbreweries, BNS Brewing & Distilling Company in Santee. The guest of honor at the mixer was Sid Voorakkara, a senior business development specialist from the Office of Gov. Brown. He provided the attendees with a brief overview of the new California Competes Tax Credit and the Manufacturing and R&D equipment sales and use tax exemption (for details go to http://www.business.ca.gov/

The producers of Manufacturing Day 2014 have bragged that, "This year’s Manufacturing Day set another record with almost twice as many events as last year. The final count was over 1,650 events in all 50 U.S. states, three Canadian provinces, and Puerto Rico." However, until we get more educators, parents, and students to attend these tours, we will not achieve our goal of attracting more youth to manufacturing and other STEM careers.