CALIFORNIA MANUFACTURING IMPACT FACT SHEET

In the face of a disruptive and unprecedented year of health mandated shutdowns across the manufacturing industry, California Manufacturing Technology Consulting® (CMTC), the Manufacturing Extension Partnership (MEP) Center in California, continued to help firms in the state grow their revenues, retain jobs, and increase cost savings. Amid industry losses on a macroeconomic scale due to the COVID-19 pandemic, CMTC remarkably still supplied hundreds of California manufacturing businesses with services that boosted their annual performance in 2020, according to a newly released economic impact analysis.

The report, produced by Beacon Economics and commissioned by CMTC, found that impacts stemming directly from their MEP-related work included over $159 million in increased sales and over $441 million in retained sales in 2020. The program also directly resulted in the creation of 1,777 manufacturing jobs in the state and the retention of more than 6,000 jobs.

“Manufacturing plays a vital role in California’s larger economy which makes these results and CMTC’s overall function so welcome and so critical,” said Mazen Bou Zeineddine, a Research Manager at Beacon Economics and the report’s lead author. “The success CMTC had in supporting the state’s manufacturing businesses during an immensely challenging year is a true testament to the MEP program’s ingenuity and long-term effectiveness.”

Given the workforce challenges, ever-evolving technological advances and changes in capital investment, CMTC has enabled small and medium-sized manufacturers to successfully cope with the changing manufacturing landscape, according to Bou Zeineddine.

Other key impacts stemming from the California MEP in 2020 includes a significant contribution to the California economy with client impacts generating $5.9B in total economic output. CMTC’s client impacts not only supported manufacturing jobs but the multiplier effect created or retained another 11,665 non-manufacturing jobs.

“Given all that manufacturing was faced with in 2020, CMTC was able to find ways to assist manufacturers during an extreme time of need,” said Bou Zeineddine. 

For more information and findings from the report, download CMTC’s California manufacturing impact fact sheet.

October is National Manufacturing Month, a time to recognize the innovations of the manufacturing industry – which plays a significant economic and jobs role in the Inland Empire.

OPINION

By: Anthony Turner, Greater Los Angeles and Inland Empire Market Executive of Global Commercial Banking at Bank of America

With manufacturers of every size and across every industry weathering unforeseen economic forces rising from the coronavirus pandemic, it seems timely to address these challenges and how the industry can overcome them.

Demand for products has been upended, relationships with suppliers and customers are being tested and liquidity issues have multiplied.  Some manufacturers have had to rapidly increase the production of goods, such as grocery items, household products and essential medical and protective equipment. Other industries, like aerospace, automotive and energy, have seen a sharp decline in demand. As of August 2020, manufacturing jobs were down 11.1 percent compared to August 2019 due to ongoing shutdowns and an overall decrease in demand.

While employment in the region remains below pre-pandemic levels, health-mandated countermeasures also continue to restrict many businesses’ ability to operate at capacity, especially those in industries that require workers to operate in close proximity, including the manufacturing industry.

In addition to the economic toll, manufacturers must consider the health and safety of their people. They need to find a balance between keeping factories running and not subjecting employees to unnecessary health risks. The pandemic has highlighted the need for manufacturers to prioritize public health, including employee health, in addition to taking forward-looking measures such as retooling technology systems to handle supply chain issues, inventory management and shifts in production processes.

There are three essential areas manufacturers should address while navigating the current crisis[1]: 

Employee Health and Well-Being 

To protect employees from health risks, manufacturers should consider leaving extended periods between shifts and conducting remote handoffs, which helps reduce unnecessary face-to-face interactions. Some are monitoring employees’ health by checking temperatures, setting up temporary health centers and even hiring onsite medical professionals to test employees.

Because these decisions are both critical and unprecedented, sharing experiences is key. Industry leaders should engage in continuing, open dialogue to address shared issues, like frequency of employee health screenings, steps to take if an outbreak occurs and best practices for addressing other employee-centric issues. These considerations are vital and working with industry colleagues can help companies identify and implement the best solutions.

Manufacturers should also consider the economic health of employees. While short-term challenges can be acute, manufacturers should think about how they want to be positioned as a business in the long-term and consider the importance of their employees. Given how challenging it can be to acquire good talent, many are looking at how to maintain their workforce, by temporarily freezing or cutting pay rather than laying off employees. This can help to build loyalty and retain talent, putting companies in a stronger position when conditions improve.   

Short- and Long-term Business Transformations

In response to declining demand for certain products, some manufacturers have quickly pivoted to meet new demands. Hockey mask companies are making face shields, fashion designers are selling masks and distilleries are producing hand sanitizer. This is a smart short-term strategy for those who can retool existing facilities, and it allows manufacturers to reallocate resources toward most pressing needs. It also enables them to consider longer-term objectives in an environment where future demand is uncertain.

To guide business strategy and gain a window into future demand, it’s also essential that manufacturers carefully track orders, inventory and other internal data. For some companies, this will require upgrading or acquiring analytics systems that can deliver more robust predictive models. Manufacturers should also closely watch indicators including national retail sales numbers, housing stocks, building permit numbers and consumer confidence levels.

Financial Stability

With fluctuations in demand, inventory challenges and sharply reduced production, many businesses are facing liquidity issues and other financial concerns. As they navigate the path forward, manufacturers can consider implementing more systematic credit checks to ensure customers can pay for orders or requesting advance payment terms. Banking partners can offer insights into best practices for credit management, working capital and cash management. Some of these practices include running sensitivity models and stress tests to project how long cash will last. While companies may not need relief immediately, setting thresholds can be helpful for knowing when it’s time to seek assistance.

While manufacturers currently face a host of challenges, with this industry as a key driver of the region’s economy, there are opportunities we should consider now, which can benefit companies in the long term. Policies that retain top talent and build loyalty; technology and process changes that make companies nimbler and more adaptive; and financial practices that lend greater insight into risk can help manufacturers develop a stronger business foundation for the long-term.

Company adapts annual event to virtual format, invites entrepreneurs to pitch new, niche and innovative products via virtual meetings scheduled for October 1, 2020

July 20, 2020 – The application process for Walmart’s seventh annual Open Call is open and the company invites entrepreneurs dreaming of landing their U.S.-manufactured products on Walmart shelves to apply for the opportunity to meet with Walmart buyers on October 1, 2020 via virtual pitch meetings. 

The deadline to apply to participate in this year’s Open Call for U.S.-manufactured products is August 10.  The application and additional information about the event are available via Walmart-jump.com.

The event, scheduled for October 1, kicks off Walmart’s celebration of U.S. Manufacturing Month and will include similar programming to previous years.  In addition to one-on-one pitch meetings with Walmart buyers, participants will have an opportunity to hear directly from Walmart executives and learn from company leaders during smaller breakout sessions designed to inform, empower and encourage supplier-hopefuls.

“During this year of unprecedented challenges for U.S. businesses, Walmart remains committed to sourcing products made, grown, or assembled in the U.S. By Investing in products that support American jobs, we are able to bring new exciting products to our customers, support new jobs in our local communities and invest in small business across the country.” said Laura Phillips, Walmart senior vice president for Global Sourcing & US Manufacturing. “Walmart’s Annual Open Call event gives us a unique occasion to identify new suppliers who can meet our customers’ needs with unique and innovative products manufactured or produced in the U.S. For the first time, this year’s Open Call event will be virtual, enabling even broader participation from potential new suppliers. We know how important this opportunity is for many small businesses, especially this year, and we are looking forward to seeing the new product submissions and meeting potential new suppliers.”

This year’s Open Call attendees could secure deals ranging from a handful of stores in local markets to supplying hundreds, even thousands of stores, Sam’s Clubs and on Walmart.com.

“Walmart took a chance on us last year and gave us a huge opportunity,” said Sean Lee, General Manager of Sweety’s Ice Cream, based in Monterey Park. “No other retailer does an event like Open Call, and it has been an awesome experience for our small business. We just had our business review and we were told our mochi ice cream is selling very well. We look forward to continuing to work with Walmart and plan to present new products at this year’s virtual Open Call.”

Sweety’s products recently hit Walmart stores and the company is applying to pitch new products that this year’s virtual open Call.

In January 2013, Walmart announced its commitment to help boost job creation and U.S. manufacturing through buying an additional $250 billion in products supporting American jobs by 2023. Walmart’s Open Call is one way in which the company continues to invest in this commitment.  

Apply for Open Call today and join the conversation on your social channels by using #WalmartOpenCall