How a New Partnership Can Help Smaller Firms Win
For Jeco Plastic Products, 2011 was a landmark year. Since 1979, the manufacturer has employed a 25-person staff, designing and producing highly-durable plastic molding at its Plainfield, Indiana facility. Yet, in the 33 years since its founding, international competition — a rising challenge to domestic manufacturers across the country — has threatened to erode the company’s core business. So when CEO Craig Carson learned that Jeco Plastics could win a multi-year, multi-million-dollar contract producing plastic pallets for a major European automobile manufacturer if it could successfully innovate the design, the company knew it had to try.
Jeco Plastic Products won the contract, expanded its staff, and was soon exporting its products. In short, business for this small American manufacturer was booming.
Jeco Plastics’ story paints a picture incongruous with the often-cited depictions of a crumbling American manufacturing base. In an age when domestic manufacturers are losing ground to mounting global competition, Jeco Plastics is regaining the lead. And it’s not alone.
It is no coincidence that small- to medium-sized manufacturers like Jeco Plastics are experiencing a resurgence. Two years ago, at the request of the Obama Administration, the Council on Competitiveness designed a public-private partnership to equip American manufacturers with the high performance computing technology needed to out-innovate and out-compete foreign competition. The partnership — later named the National Digital Engineering and Manufacturing Consortium, or NDEMC — would revolutionize how America’s manufacturing supply chain does business.
In 2011, NDEMC selected CEO Lary Rosenboom of Rosenboom Machine Tool Inc. as a partner, as well as Jeco Plastic Products and five other small- to medium-sized companies to engage under the NDEMC Midwest pilot. Rosenboom and his staff, who produce custom hydraulic cylinders, would now gain access to Deere & Company’s cutting edge modeling, simulation and analysis tools. It was a tremendous opportunity.
Rosenboom, who described his experience with NDEMC at the Council’s December 2011 National Manufacturing Competitiveness Summit, would now be able to transfer the technology to his company to rapidly test and develop improved parts. For both companies, the story is a classic win-win: Rosenboom — a supplier to Deere — can leverage its new capacity to increase sales in adjacent markets; and Deere gets a better product in its supply chain.
Without assistance through partnerships like NDEMC, many companies cannot afford to take on such technologies, putting them — and America at large — at risk for losing out on major business opportunities to foreign manufacturers employing sophisticated computer techniques.
Eventually, with the support of Deere & Company, the Lockheed Martin Corporation, the General Electric Company, and the Procter & Gamble Company, a framework was developed that would evolve into NDEMC, bringing together various public and private partners to meet a grand challenge in a creative, innovative, pro-business and pro-growth way.
For many of the manufacturing Fortune 50 original equipment manufacturers, access to powerful computer tools has provided a competitive advantage. Yet their suppliers, constrained by tighter resources, are often lagging in the same technologies — undercutting the ability across the entire manufacturing supply chain to compete with foreign competitors equipped with these tools. The recently released report, Make: An American Manufacturing Movement, underscores the need to bolster collaboration with SMEs on the use of advanced MS&A manufacturing as a means to ensure the U.S. remains at the forefront of international manufacturing and innovation.
Each of NDEMC’s four founding original equipment manufacturer partners understood these challenges. And when presented with NDEMC, each recognized the potential that a more efficient and capable supplier base could have for accelerating innovation, productivity and profits throughout all levels of the supply chain.
And so in March 2011, each signed on to create NDEMC to strengthen America’s domestic manufacturing supply chain and increase the global competitiveness of American SMEs. The first large-scale public-private initiative of its kind, NDEMC is a collaboration of the U.S. government, big companies, state and university computing centers, and other non-governmental organizations.
With $2.5 million in private sector funds and in-kind contributions, matched by $2 million in funding through the Economic Development Administration, the White House and the Council on Competitiveness are leading the effort. Today, NDEMC is the initial project of President Obama’s Advanced Manufacturing Partnership (AMP) and is launched as a pilot focused on the Midwest, in America’s industrial heartland.
Perhaps most importantly, NDEMC exemplifies the potential for public-private partnerships to play a pivotal role in the growth of the U.S. economy, as well as the role that non-profits can play in catalyzing such opportunities.
This post is part of the HBR Insight Center on American Competitiveness.