Start making sense

New Jersey is home to 287 companies that make some type of personal protective equipment, or PPE. New Jersey Manufacturing Extension Program CEO John Kennedy shared that with panel members and attendees of NJBIZ’s manufacturing panel discussion. Panel members, including Gillian Bleimann Boucard, executive vice president at Carteret fragrance manufacturer Berje Inc.; Mazars CPA Alisha Jernack, and Mark Howe, vice president of sales and marketing at Berkeley Heights industrial equipment supplier The Knotts Co., told Kennedy that they didn’t know about the state’s PPE manufacturing presence.

“Neither did I before [the pandemic], and that’s part of our problem: we don’t understand our supply chain,” Kennedy said. He’s working with U.S. Sen. Bob Menendez on legislation to support a national supply chain database, so MEPs around the country and the manufacturers they serve can source materials from places around the country they may not have known existed.

The panelists addressed several issues critical to the manufacturing sector during the Oct. 26 virtual event, including supply chain problems, raw material costs, labor challenges and how to attract young talent.

“We often hear [that bringing manufacturing] back to the U.S. [would] be more costly. However, I would argue the point of you’re going to have faster turn times and you are likely missing out on revenue today as a manufacturer or distributor if you’re getting stuff from overseas and you’re unable to get that inventory,” Jernack said. “If you’re not able to get the inventory or you’re not able to receive it timely, then you don’t have a sale. So you can offset the increased costs by having your inventory, your raw materials, your goods closer to you. And by understanding the consumer and the patterns better and being able to have that predictability, you’re able to turn faster and the outcome of that is you’re going to have increased sales, which should offset any increase that you’ll have for additional labor costs.”

Howe said one of the manufacturers that Knotts works with has an average run size of three items, and that having local suppliers with the right inventory in stock is important. “To manage that level of supply chain, it could be something as simple as a bearing could hold up an entire order for months because it’s stuck on a boat somewhere. With our local customers that we work with it really comes down to ‘can we look at a different part within the system? Can we substitute it with with something else?’ [Asking] ‘what is your lead time you promised to the customer?’ so we can have a better understanding what you need, [and figuring out] how we look at our portfolio of what we offer to get you where you need to be.”

It comes down to flexibility, he said, and Knotts has had manufacturers it works with change material requirements and even certifications due to that. But having something that works in inventory is “mission critical right now,” he said.

“Inventory’s king, so if you have enough in your facility to answer some orders then you’re gonna win that top spot in that instance,” Howe said.

Bleimann Boucard noted that in some instances, sourcing domestically isn’t a possibility. Roughly 40% of Birje’s materials are produced in China, and it’s Mother Nature’s doing.

“Eucalyptus oil—there’s not the land, there’s not the environment … to allow a lot of those products. [That puts] us at a severe disadvantage that we’re still struggling with,” Bleimann Boucard said. “Because of those factors mark, either the regulatory landscape, or people, [there’s no way for] many of those products be made here, and there are formulas that are reliant on those products that we supply and produce here.”

Labor costs, as mentioned by Jernack, are one thing, but a constant issue in U.S. manufacturing is staffing in general.

Replay: Manufacturing, a NJBIZ panel discussion

Click through to register to watch the full panel discussion!

Knotts has been involved with FIRST Robotics, a nationwide program that introduces grade school and high school students to robotics and engineering. “I think one thing we as manufacturers can do is we could potentially develop more partnerships, not at the college level, but with the middle school and high school levels, and give them tours give them opportunities to see what see some of the high value jobs. Manufacturing gets this this bad rap of being all dirty and dangerous, when the reality of it is manufacturing has advanced tremendously. There’s a lot of technology and a lot of thought process that goes into the floors,” Howe said.

“If you don’t start building a pool now, again, with the amount of individuals retiring and the generational shift, we’re just making manufacturing a lot harder to get … future needs,” he added.

The pervasive negative perception of manufacturing sector work keeps people out of the pursuing jobs in the sector, and the responsibility of changing that perception, Jernack said, falls on industry leaders.

Kennedy noted that 33,000 manufacturing jobs were open in New Jersey pre-pandemic, and now 45,000 positions must be filled. Some of these jobs don’t require degrees, and some do.

“Cost accountants are in that top five, because if you can’t make money making it, don’t make it. Engineers, we’re not producing engineers, we’re just not. Others, CNC machinists, we can’t find them, welders … but the one that comes out on top that surprises me is technical sales. Because, look, if you can’t sell it, what are you building?” he asked.

Younger people need to be informed about these jobs, Kennedy explained, but they also have to learn that a manufacturing job is like a job anywhere else: “We also have to educate our young people that you don’t start at the top. I’ve worked with a lot of young people, and they get disappointed if they don’t get a raise and promotion in six months.”

Bleimann Boucard said Berje noticed that dynamic when the company had a training program for people right out of college. She said the company “wanted to be people’s second job, not first job,” because executives found that “a lot of expectations that people had for their first job were difficult to live up to or unrealistic.”

To stay competitive, Berje heightened its focus on retention. “We’ve changed our shifts I think over three times, really listening to people, saying ‘OK, what works for families? What works for working [parents]? Constantly being flexible,” she said.

Despite challenges, panelists agreed that making things here in America and sourcing more materials domestically would be a good thing. “You know 95% of our blood pressure medicine is made in China; 50% of the American adults are on blood pressure medicine. How is that good business?” Kennedy said.

Kennedy later tied in the blood pressure medication with commentary on tariffs and on made-in-America requirements. When the machine shop he owned was doing an installation in China, Kennedy said he was required to do 50% of the manufacturing within the province or he wouldn’t get the job.

“That was China’s rule. I’m not saying we should have the same, but we certainly should control some of that,” he said.