A 1-year-old alliance designed to fill an advocacy and support gap for second-stage manufacturers in Michigan is finding its footing amid the disruption of 2020.
Jennifer Deamud, executive director of the Benton Harbor-based nonprofit business association Manufacturing Growth Alliance (MGA), spoke to the Business Journal earlier this month about the needs, opportunities and challenges for Michigan’s small manufacturers.
MGA was founded in October 2019 as a subsidiary of the nonprofit Kinexus Group — parent organization of the Michigan Works! office overseeing Berrien, Cass and Van Buren counties, as well as of other workforce and economic development groups. MGA’s statewide mission is to champion, serve and advocate for manufacturers with 100 employees or fewer, with the goal of making Michigan’s manufacturing sector the most competitive and prosperous in the nation.
Deamud was hired as MGA’s executive director in April 2020 after a 12-year career at the Michigan Small Business Development Center, most recently as associate state director and COO. She is now responsible for MGA’s strategic planning, visioning, building the board of directors, etc.
She said MGA’s primary function — which intensified after COVID-19 hit — is to give small manufacturers a voice in Lansing, help accelerate their growth, connect them with service partners to build smart and lead strong, and support them with their talent needs.
“A second stage company typically needs support with building the team and growing it to last, so that’s really what MGA was focused on prior to COVID-19,” she said.
After coronavirus struck, Deamud and the MGA shifted into resource-gathering mode to help “put out fires” and connect manufacturers with the information they needed about applying for Paycheck Protection Program (PPP) loans and other state and federal assistance programs, as well as helping them locate the personal protective equipment (PPE) they needed to safely continue operations and/or restart when the time came.
When a manufacturer in southeast Michigan needed capital to continue filling tier one orders during the shutdown, Deamud was able to connect the business with a private equity firm that ended up investing in the business.
As the pandemic entered its fourth month in Michigan, Deamud said MGA switched into more of a listening mode, helping manufacturers think critically about the problems accelerated by COVID-19 and how to solve them.
The trends MGA uncovered in its listening phase, which continues today, include:
- Automation — small manufacturers were aware of Industry 4.0 before this, and many are now getting serious about adopting automation and training employees in it, because the opportunities it brings can streamline their operations, help them better allocate talent and financial resources in their facilities, and support their operations during the pandemic.
- Supply chain diversification — small manufacturers see the tier ones’ move toward adding more suppliers as an opportunity for growth in their business.
- Reshoring — small manufacturers are watching to see how to position their business for opportunities as many large companies look to bring their production back to the U.S.
- Talent — small manufacturers need talent. Many manufacturers were in need of talent prior to the pandemic, and many of them still need it.
- Health care — small manufacturers are seeing the need to offer mental health services to their workforce. Individuals are dealing with significant changes in their lives, as well as the possible loss of a loved one from COVID-19, and often, small manufacturers’ health plans do not include mental health coverage. In light of that, MGA has been working with organizations such as the Small Business Association of Michigan (SBAM), which provides human resource solutions, to connect small companies with better coverage levels.
“Some of these manufacturers are starting to look at, ‘All right, how do I build a strategy? How do I pivot permanently so that I can access these opportunities in 2021 and 2022?’” Deamud said.
On the automation front, MGA is working to solidify a partnership with Automation Alley that would help educate manufacturers and position them to adopt automation, including capabilities such as artificial intelligence, robots and autonomous off-road vehicles that can be used in manufacturing plants.
“Many of our small manufacturers, they’re not even leveraging sensors on their production line,” Deamud said. “It’s very low cost to add sensors to a production line so that you can start accessing that data (about the line).”
Sensors can help predict when a certain piece of equipment will break down, so maintenance crews know when to do preventive work to avoid a potential production shutdown, Deamud said.
Additionally, adopting automation could include harnessing tools like “cobots,” or collaborative robots that work alongside humans. A small Muskegon manufacturer bought one for $40,000 and is using it to perform “critically important” tasks, such as quality control and data-keeping.
“Humans can do (quality control). They absolutely can. But what this manufacturer found is that there’s a significant decrease in the number of defects that go on to the customer when you can use a cobot and use artificial intelligence that’s programmed to assess each part that leaves the facility,” Deamud said.
She added that while automation is not intended to take over human jobs, it can streamline the operations of plants that are struggling to find the requisite talent to fill jobs.
“I know a lot of manufacturers right now that can’t get a full workforce to deliver on orders,” she said, noting this is for various reasons related to COVID-19, such as health risks, child care and virtual schooling and the lack of incentive to return to work when people can sometimes make more money collecting unemployment.
Some manufacturers are trying to solve the talent gap by “hiring for attitude” instead of skills and experience, but this is an expensive approach at a time when talent training dollars in the state of Michigan have been cut way back, Deamud said. She said prior to her arrival at MGA, the organization formed a partnership with the Michigan Manufacturing Technology Center to train workers, which is still in effect.
She said MGA is advocating with state lawmakers for additional training dollars for the Going PRO Talent Fund, as well as raising awareness of the need to incentivize individuals to get back to work.
“We’re concerned, just like the state, about families being able to pay their mortgage, to pay their light bill and their heat bill, but at some point, we need to look at how are we going to get all of our workforce back to work. We’re creating awareness of that need — MGA is, Kinexus Group is — but until we have a vaccine that’s accepted by communities, we really don’t see that happening this year,” she said.
“We’re still advocating for it. We want to have those conversations and identify the needs of small manufacturers with the governor and with her team from an advocacy standpoint. But we also understand that it’s a real balance right now, and we need to have empathy and compassion for all the situations our workforce is in right now. You can’t say anyone is doing anything absolutely wrong. You can’t say anyone is doing anything absolutely right. It’s a pandemic. So, we’re learning, we’re listening and we’re supporting at that advocacy level when appropriate.”