New federal legislation would expand support for small and mid-sized manufacturers across the country.
U.S. Sens. Gary Peters, D-Michigan, Chris Coons, D-Delaware, and Kelly Ayotte, R-New Hampshire, recently introduced the Manufacturing Extension Partnership Improvement Act, which would expand and improve the Hollings Manufacturing Extension Partnership, or MEP.
The MEP is the only public-private partnership dedicated to providing technical support and services to small and medium-sized manufacturers.
Michigan’s MEP affiliate, the Michigan Manufacturing Technology Center, or MMTC, has been working with small and medium-sized businesses across the state since 1991. It currently serves nearly 500 Michigan companies.
“The program helps small and medium-sized manufactures with information, training and technologies that help improve their productivity and profitability,” Peters said. “It provides services that a large manufacturing company is able to source in house but (that are) more difficult for a small to medium-sized manufacturer.”
Mike Coast, president of the MMTC, said the center takes on in-depth projects with companies, which often include lean-manufacturing programs and leadership training.
“We take waste out of the system, and we improve operations,” he said. “We do a lot of quality work. “We also do a lot of coaching and mentoring for the small companies to help them run their businesses.”
The MMTC also helps companies find new markets and new customers.
“We do a lot of growth services and market diversification kinds of things,” Coast said.
Peters said the program is particularly important in Michigan due to the state’s large advanced manufacturing base.
“It’s extremely important that we support our small and medium-sized manufacturers in Michigan,” he said. “They are employers of many people, and those are good-paying middle-class jobs in manufacturing.
“But to be competitive, they need to have access to some specialized services that can be very expensive for them. The MEP enables them to utilize those services, which means they can continue to employ people in Michigan.”
Under the current program, a company’s investment is matched one to one.
“For every 50 cents, they get a dollar’s worth of services,” Peters said. “We want to maintain the cost share.
“Right now it’s at 50 percent, but funding is at risk of reduction to 40 percent in 2018 and 33 percent in 2020. We want to … maintain the one-to-one relationship.”
The Manufacturing Extension Partnership Improvement Act would:
- Permanently set the federal MEP cost share at one to one.
- Strengthen and clarify the MEP Center review process and require re-competition of MEP Center awards every 10 years.
- Authorize MEP Centers to support the development of manufacturing-related apprenticeship, internship and industry-recognized certification programs.
- Increase the MEP program authorization level to $260 million per year through 2020.
- Require the MEP program to develop open-access resources describing best practices for America’s small manufacturers.
Michigan’s MMTC supports offices in Grand Rapids, Plymouth, Saginaw, Traverse City and Marquette.
Coast said from 2014-15, MEP in Michigan helped to create an additional $114.2 million in sales and retained $282.7 million in sales, helped save costs of $46.4 million, created or retained a total of 1,486 jobs and resulted in investments of $148.7 million.
Coast said those results make Michigan one of the leading centers in the country.
Of $128 million allotted to the MEP program, MMTC receives $4.23 million a year.
The organization also receives money from the Michigan Economic Development Corp. and from the companies participating in the program.
Coast said the one-to-one match is important to the success of the program because it influences how many companies the MMTC can work with annually.
“We’ll work with more companies, we’ll make them better, they’ll create more jobs and hire more people,” Coast said. “It’s better for overall economy.
“If the funding is reduced we’ll have to raise our prices for the companies, and we don’t want to do that.”
William Small, MMTC-West regional director, said the Grand Rapids office works with approximately 150 manufacturers each year and operates three councils:
- The supply chain management council, which includes about 40 companies.
- The manufacturers council, which includes 20 companies.
- A food processors council consisting of nearly 25 companies.
He said many small to mid-sized companies don’t have the resources on their own to focus on quality improvement and internal auditing for continuous improvement. They also often don’t have the training resources to support employees who have been promoted to leadership positions.
“We come in with the people skills to help make sure these people who have been promoted have the proper tools,” he said. “In this day and age, with workforce issues, companies don’t want to lose people, and that is one of the quickest ways to lose people, those people who don’t have the tools to be a manager.”
Peters said he expects to see the U.S. Senate act on the Manufacturing Extension Partnership Improvement Act this fall.