Auto/Aero Supplement to the Q3 2018 Issue of Area Development by Area Development

2018

Special Industry Report

3D PRINTING: A GAMECHANGER

THE E-COMMERCE EFFECT ON THE AUTO AFTERMARKET

DESIGNING THE AIRCRAFT MANUFACTURING FACILITY

AUTOMAKERS ENTER THE CIRCULAR ECONOMY

A Special Supplement to

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AS A DISTRIBUTION FIRM FOR REFRIGERATED PRODUCTS, THERE’S NO ROOM IN OUR BUSINESS FOR A

When your success depends upon storing and moving things that need to remain cold or frozen, you want the hottest names in the business. That’s why Interstate Warehousing turned to Johnson County REMC and Hoosier Energy for their operation in Franklin, Indiana. Not only did they get a key location, they also got a team that understands their need for 24/7 energy and the ability to adjust load demands as needed. And Hoosier Energy has been there every step of the way. Including four expansions. If you’re in logistics, we’re the logical call.

Grant Chapman Facility Engineer Interstate Warehousing hoosier energy rural electric cooperative is an equal opportunity employer.

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Editor’s Note As the NAFTA negotiations proceed, automakers are anxiously awaiting details of the agreement reached with Mexico. They’re also awaiting the conclusion of talks with the third party to NAFTA, Canada — not to mention tariff agreements with European and Asian nations as well, all of which affect the global supply chain in the automotive industry. The Trump administration’s rationale behind the tariffs on vehicles and parts is that these imports pose a threat to national security. However, the Organization for International Investment (OFII) would beg to differ. According to OFII President and CEO Nancy McLernon,1 international automakers support more than 500,000 U.S. jobs — with more than 400,000 being well-paying manufacturing jobs. Moreover, international automakers like Toyota, Hyundai, and Mercedes-Benz have helped to create even more highly skilled U.S. jobs through state-of-the-art training programs — with the latter automaker even partnering with the Department of Veterans Affairs to offer an apprenticeship program. McLernon believes the President’s new tariff policies are going to do more harm than good to the auto industry and the U.S. economy as a whole. Meanwhile, despite proposed easing of environmental regulations under the current administration, U.S. automakers are also at the forefront when it comes to sustainability programs. They are turning to “circular integration” of products, which also create jobs and lowers costs. In another attempt to cut costs, as well as shorter lead times, automakers and aerospace/aviation companies are adapting innovative technologies like 3D printing to transform their design, manufacturing, and distribution processes. As the auto and aero industries continue to evolve, insight can be gained from the articles contained in this special supplement, and the sponsoring organizations can also help your firm meet its facility needs. 1

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Table of Contents 4

Automakers Enter the Circular Economy

Industrial companies, including automotive firms, are among those reinventing how businesses find, use, and dispose of the resources and materials that make up global trade.

Is the Automotive Aftermarket Immune to E-Commerce?

Auto parts suppliers are responding to the growth in e-commerce with a multi-pronged strategy, from the expansion of retail locations to the addition of regional and “mega” distribution hubs.

Designing the Aircraft Manufacturing Facility

Everything about an aircraft manufacturing and assembly building must be driven by the manufacturing process.

21 3D Printing: A Game-Changer

for the Manufacturing Industry

3D printing has been experiencing phenomenal growth and is affecting the design, development, manufacturing, and distribution processes.

26 Sponsors Online Exclusive In Focus: Examining Commerce’s Misguided Auto Imports Investigation

PUBLISHED BY

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Automakers Enter the Circular Economy By Karen E. Thuermer

GM Global Manager of Waste Reduction John Bradburn demonstrates the Chevrolet Equinox engine insulation made from used water bottles from several GM facilities. (Photo by Santa Fabio for General Motors)

INDUSTRIAL COMPANIES, INCLUDING AUTOMOTIVE FIRMS, ARE AMONG THOSE REINVENTING HOW BUSINESSES FIND, USE, AND DISPOSE OF THE RESOURCES AND MATERIALS THAT MAKE UP GLOBAL TRADE.

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he auto industry has long been at the forefront of innovation, particularly when it comes to manufacturing processes and materials management. Back in the early 1900s, Henry Ford was famous for introducing vertical integration into manufacturing processes. Today, with concerns mounting over the environment and high materials costs, automakers are turning toward “circular integration” as a means to not only initiate sustainability programs, but also create jobs and save costs. In fact, global professional services company Accenture concluded in its 2016 report entitled “Automotive’s Latest Model: Redefining Competitiveness through the Circular Economy” that

automotive companies could realize $400 billion to $600 billion in revenue from circular business economy business models by 2030.1 While automakers have historically resisted utilizing recycled parts, the practice is catching on. For several years a wide host of car manufacturers like Subaru, Volvo, Audi, Mercedes-Benz, BMW, Nissan, Cadillac, Chrysler, Ford, and General Motors have been running sustainability programs to find ways to be more earth-friendly. An article that appeared in Edmunds in 2015 pointed to Nissan using recycled soft drink and water bottles in seat cover fabric for its Leaf model; Mercedes, using recycled plastics in 52 components including wheel well liners, bumpers, and air and water baffles; Cadillac using recycled tires in its under-hood air and water baffles; and GM using employee recycled water bottles for noisereducing fabric insulation for the Chevrolet Equinox V-6 engine.2 “There’s a tremendous amount of opportunity in the circular economy, which means the utilizing of materials in a better way,” says John Bradburn, former GM Global Manager of Waste Reduction. “It’s not just about traditional recycling, but taking a byproduct and repurposing or reusing it in a way that helps targeted applications, particularly if materials are generated locally and processed in a way that helps the community.” The World Business Council for Sustainable Development (WBCSD), which promotes sustainability

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through its Factor10 circular economy initiative, sees the overall global circular economy as a $4.5 trillion opportunity.3 Factor 10, a CEO-led organization, brings companies together to reinvent how businesses find, use, and dispose of the resources and materials that make up global trade. The BMW Group, Ford, Honda, Volkswagen, Renault, and tire manufacturers Goodyear, Bridgestone, Continental, Kumho Tire, Hankook, Michelin, Pirelli, Yokohama Tires, and Toyo Tires are among the leading private companies that support the effort.

SOARING TO NEW HEIGHTS

Case in Point But there’s a good example here in the United States. Bradburn, who worked as GM’s environmental guru for 40 years, points to the Flint, Mich., water crisis that came to a head in late 2015 and how carmakers, OEMs, and other manufacturers came together to rethink manufacturing processes, participate in today’s circular economy, and help the local economy. During the Flint crisis, the community consumed water in millions of plastic bottles, all of which would have most likely ended up in a landfill if it weren’t for Schupan Recycling, one of the largest independent processors of used beverage containers in the country. Schupan supported the cause by installing collection points in Flint for used water bottles where the bottled water was being distributed. “Schupan collects the bottles from deposit boxes located near water distribution points in Flint,” explains Schupan Sustainable Projects Manager Roger Cargill. Since Schupan began the program, recycling has quickly increased in Flint. GM, which operates a manufacturing plant in Flint (although downsized substantially due to automation), partnered with Schupan Recycling and has since used millions of recycled water bottles from

WHILE AUTOMAKERS HAVE HISTORICALLY RESISTED UTILIZING RECYCLED PARTS, THE PRACTICE IS CATCHING ON.

Every day, Mississippi’s highly skilled workforce assembles aerospace products used all over the world, including Airbus Helicopters which support the nation’s largest public safety organizations. Locate to Mississippi, and see your company’s potential take off.

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Flint in three of its products: Chevrolet Equinox V-6 engine covers, air filters for 10 GM plants to clean air inside its factories, as well as insulation for The Empowerment Plan coats for the homeless. “The goal was to put together a team that included GM and Schupan to process the water bottles from that Flint community into other products,” Bradburn says. Sixty percent of the material comes from deposit boxes in Flint. “And since the plastic is not mixed with trash or other things, our product comes out flawlessly clean,” Cargill comments. GM calls the project “Do Your Part.” “It’s one example of keeping things local, generating jobs, and utilizing available resources,” Bradburn says. “The alternative to these water bottles, which are quickly becoming a symbol of waste worldwide, is to put

them in a recycling container and ship them to who knows where — probably overseas.”

Broader Efforts When discussing the use of materials, most companies refer to supply chain management. But Bradburn maintains there’s more value to a supply web since it involves building and interconnecting business relationships, jobs, and economic activity. “We are trying to accomplish this with the Materials Marketplace and others — introducing companies for providing ideas for sustainability.” The Materials Marketplace operates as a cloudbased platform where traditional and nontraditional industrial waste streams are matched with new product and revenue opportunities. The goal is

I-81/I-77 Companies’ Partner With Colleges to Design Customized Training Programs Virginia’s I-81/I-77 Crossroads region is composed of ﬁve counties and one city in the southwestern region of the Commonwealth, with one of the leading trucking routes traversing the region; interstates 81 and 77 intersect in the region. The strategic East Coast location is a driving force in the resurgence of manufacturing. With access to three fourths of the U.S. population within a day’s truck drive, the region is primed for companies that need quick access to their customer base. The region’s manufacturing base includes automotiverelated companies using

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sophisticated technology to make precision parts for the world’s leading automakers, as well as high-tech companies in the plastics and aerospace/defense industries. To attract and support companies in these sectors, the region must provide a workforce that is skilled in these trades. This is where unique partnerships provide an advantage. “The ability to mobilize and customize workforce development programs to meet the needs of both incoming projects and existing employers positions the region to increase the productivity and efficiency

of our employers,” Community college student training says Josh Lewis, on HAAS Machines executive director of Virginia’s Indussigniﬁcant capital investment trial Advancement Alliance. in new machinery and pro“Top tier suppliers in the auduction in the region, Somic tomotive sector rely heavily has worked with the college on our college workforce to provide CERT training on development directors new Fanuc robotics. to respond to changes in technical skills required by “This is absolutely critical to advances in new CNC and the success of Somic and to robotic machinery.” our ability to provide an area where they can compete Companies like Somic and grow organically,” Lewis America, a leading automoexplains. tive components manufacCopy supplied by Virginia’s turer and Tier 1 supplier to Industrial Advancement Toyota, have worked closely Alliance with Wytheville Community College on customized programs. Since making

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to enable a culture shift to a circular, closed-loop economy in which waste is diverted from landfills and generates significant cost and energy savings, as well as creating new jobs and business opportunities. It maintains that, on a global scale, the circular economy has the potential to create 100,000 new jobs by 2019.4 Over the past 20 years, Materials Marketplace projects, spearheaded by the United States Business Council for Sustainable Development (US BCSD) and scale-up partner Pathway21, have engaged hundreds of companies, including large and small academic institutions, nonprofits, and entrepreneurs around the world. The group has many projects in the works that address ecological issues such as wildlife preservation, soil erosion and control, jobs, as well as economic development. “This should resonate with any company that wants to operate into the future,” says Bradburn, who now serves as chief materials officer for Pathway21. “Companies will do their best when they participate in these sorts of projects.”

IT SEEMS THAT STATES WITH SUBSTANTIAL AUTO MANUFACTURING SECTORS ARE EMBRACING THE CIRCULAR ECONOMY CONCEPT.

DRIVEN TO SUCCEED

State Efforts

It seems that states with substantial auto manufacturing sectors are embracing the circular economy concept. In April 2017, Ohio EPA’s Division of Environmental & Financial Assistance (DEFA) launched a new online platform that allows continuous reuse of products and materials that might otherwise be destined for disposal in landfills. The platform is the result of a partnership with the Materials Marketplace. “With statewide access to thousands of Ohio’s businesses, communities, and other organizations, DEFA is well positioned to bring members together in this modern online marketplace,” commented Ohio EPA Director Craig W. Butler in a press release.5 He described the service as positioning Ohio as a leader in the circular economy, helping remove materials from the waste stream, promoting jobs, and allowing for better efficiency and savings in the processes of creating goods and services. Ohio was the first state in the nation to adopt a circular economy program of this scope and scale. Tennessee joined in August 2017. The only U.S. city to do so to date, Austin, Texas, joined in 2014. Andrew Mangan, founder and executive director of the US BCSD, reported in a press release, “Many businesses and organizations in

Automotive manufacturers know Mississippians can efficiently make automotive products. Educational institutions work hand in hand with companies like Toyota and Nissan to ensure the best workforce is available to make quality automobiles. Discover how Mississippi Works.

MISSISSIPPI

AUTOMOTIVE

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Competitive R&D Ecosystems, Quality Workforce Draw Auto Companies Toyota Motor Manufacturing Canada Inc. recently announced plans to invest $1.4 billion in Ontario, Canada, at its Cambridge and Woodstock assembly plants. This investment is expected to create 450 direct new jobs and an additional 1,000 spinoff positions. This venture supports the already more than 8,000 jobs in Southwestern Ontario. In support of Toyota’s investment, the provincial and federal government have committed $110 million to assist with the upgrade of the north plant in Cambridge and the west plant in Woodstock, further supporting the production of the next generation of RAV4s, including new hybrids, as well as research and development over the next decade. The automotive sector is a signiﬁcant part of Ontario’s economy and is the country’s largest export industry. Automotive production accounts for more than

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500,000 jobs and contributes $18 billion annually to the economy. Ontario’s commitment to supporting further advancement in this sector is evidenced in the various endeavors that support the growth and innovation of the automotive industry. “There’s been a lot of talk about Canada’s auto sector in recent years, and it’s no secret the industry has gone through a great deal of change,” said Prime Minister Justin Trudeau. “Agreements like this one are key to creating good, well-paying jobs for the middle class and for people working hard to join it.” Once upgrades are complete, the Cambridge plant will join the Woodstock facility in producing the RAV4, one of Toyota’s best-selling vehicles. The company sold more than 450,000 in North America in the past year. The $1.4 billion investment is on top of the company’s

previous investment of about $1 Toyota Motor Manufacturing Canada Inc. billion over the past three years, said Fred Volf, president of drive down R&D costs by Toyota Motor Manufacturing as much as 40–50 percent. Canada. The company will These programs have no spend about $200 million of caps and can be carried this newest investment on back or forward to reduce research and development companies’ corporate tax over 10 years and will inpositions. clude everything from basic research to cutting-edge Ontario’s 44 colleges and technology and high-quality universities have fostered product advancement. a workforce that is highly educated and committed Companies like Toyota have to upgrading their skills. The been choosing Ontario for result of Ontario’s education new investments for a variety system is a highly trained, of compelling reasons. well-educated workforce Among the motivating that is adept at problemfactors are the quality of solving and managing Ontario’s workforce and a complexity. Compared to very favorable tax treatment its North American counterof R&D activities. Ontario parts, 67 percent of Ontario’s provides one of the most workforce has a postsecondcompetitive R&D ecosysary education, compared tems in North America. For to 45 percent in the United quite some time, Ontario has States and 16 percent in offered some of the most Mexico. generous R&D tax credits Copy supplied by City of in the industrialized world. Woodstock Economic The combined Ontario and Development Ofﬁce Canada R&D tax credits can

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Tennessee are challenging the traditional take-make-dispose model; the Materials Marketplace is an important enabler to move this new circular thinking into action.”6 The automotive sector is one of the most prolific user groups on the Tennessee Materials Marketplace, and includes GM; Volkswagen; Nissan North America, Inc.; Bridgestone Americas Tire Operations; and major automotive suppliers. According to the program’s website, “The Tennessee Materials Marketplace is an ideal platform for the automotive sector in Tennessee to actively engage in the circular economy and discover reuse, remanufacturing, and recycling solutions for waste and byproduct materials.” And this year, Michigan launched its Re:Source program, an initiative that promotes the use of recycled materials in economic and business opportunities across the state. “Its purpose is to connect businesses looking to recycle with businesses that can process those materials through a Recycled Materials Market Directory,” explains Matt Flechter, a recycling market development specialist at the Michigan Department of Environmental Quality. Flechter explains that the Department of Environmental Quality has been working on the project for a number of years. “The Governor’s Office has challenged us to triple the recycling rate in Michigan by making sure companies have increased access for participation and to businesses to recycle,” Flechter says. “We want to make sure people know how and where to recycle and also make sure there are markets for those materials.” The goal is to develop those markets either regionally or locally by creating partnerships. The department has a contract with the US BCSD to help implement the Materials Marketplace, which is scheduled to launch in September. The effort could take on an even greater significance given President Trump’s recent tariffs on steel and aluminum that observers say will impact the U.S. automakers — big buyers of such materials. Flechter points out that material being buried in landfills can be turned into new materials right in Michigan. “We, as the Department of Environmental Quality, are working with recyclers to talk about hauling materials and composting facilities,” he says. ”We have a direct connection to those users through environmental regulatory space and technical assistance.” To connect with manufacturers looking to expand, the department also has created a partnership with the Michigan Economic Development Corp. “We recognized that to be successful, we needed to connect the two pieces of the puzzle.” <> 1

https://www.accenture.com/t20161216T034331__w__/us-en/_acnmedia/PDF-27/Accenture-POV-CE-Automotive.pdf https://www.edmunds.com/car-technology/renewable-and-recycled-materials-help-make-cars-green.html https://www.wbcsd.org/Programs/Energy-Circular-Economy/Factor-10/News/The-hottest-business-trends-are-circular 4 http://materialsmarketplace.org/#the-pilot 5 http://epa.ohio.gov/News/Online-News-Room/News-Releases/articleid/1113/ohio-epa-announces-new-onlinematerials-marketplace 6 http://materialsmarketplace.org/news/2017/8/14/announcing-the-launch-of-the-tennessee-materials-marketplace 2 3

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Is the Automotive Aftermarket Immune to E-Commerce? By Jeff Green, Managing Director, Global Occupier Services, and Practice Leader, Automotive Advisory Group; and Ben Conwell, Senior Managing Director and Practice Leader, E-Commerce Advisory Group; Cushman & Wakefield

that is experiencing a counternarrative. In 2018, these companies have announced plans to expand their retail footprints while embracing e-commerce, despite the attempts of competitors like Amazon and Walmart to encroach on this $130 billion market.

Why the Retail Expansion?

AUTO PARTS SUPPLIERS ARE RESPONDING TO THE GROWTH IN E-COMMERCE WITH A MULTI-PRONGED STRATEGY, FROM THE EXPANSION OF RETAIL LOCATIONS TO THE ADDITION OF REGIONAL AND “MEGA” DISTRIBUTION HUBS.

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here has undoubtedly been a dramatic shift in the retail industry over the past several years. Driven by the growth of e-commerce, it seems no industry has been untouched by the impact of online sales, same-day deliveries, and evolving supply chains. For some legacy retailers, this shift has been a challenge, and in 2018 alone, we’ve seen some major downsizing, layoffs, and closures afflict retailers across the industry. Some longstanding companies, however, are experiencing an entirely different reality. AutoZone, O’Reilly Auto Parts, and Advance Auto Parts are automotive aftermarket suppliers that were founded decades ago and represent a market

Institutional auto parts retailers are becoming more strategic about what differentiates them from their aspiring competitors. Expanding retail locations is just one strategy to remain in the lead, in addition to prioritizing better service, housing comprehensive inventory, maintaining strategic supply chains, and securing quick and reliable deliveries. Over the last several years, AutoZone has continued to expand its footprint with more than 5,500 stores across the U.S., the District of Columbia, and Puerto Rico. By the end of 2018 alone, it will open 26 new stores in the U.S., and over the next three years, it plans to open additional regional hubs and up to 40 additional mega hubs. It was in 2002 when AutoZone first began experimenting with a distribution hub strategy. Regional hubs can store up to 50,000 different items at a given time, and for AutoZone, this has proven to be an effective way to adequately stock its retail stores across the country.

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Mega hubs have followed, which are even larger distribution centers designed to keep regional hubs fully stocked with deliveries of inventory arriving multiple times a day. Ultimately, regional hubs and mega hubs have allowed AutoZone to complement its retail stores and build up an immense stock of inventory that ensures surrounding stores and commercial mechanics can quickly access a diverse and comprehensive range of auto parts. O’Reilly Auto Parts has pursued a similar model. Last year, the company opened 190 new retail stores, and by the end of 2018, it is projecting the addition of 200 new stores. Overall, the company has 27 regional distribution centers that supply 331 hubs. Those hubs ensure consumers can quickly and easily access thousands of specialty auto parts at its growing number of retail stores, which is nearing 5,000 locations. Advance Auto Parts also maintains a network of 54 regional distribution centers that support a similar store base of over 5,000 retail locations, and in 2018, it is also looking to expand. More store fronts have translated into more distribution centers, and this is where institutional leaders like AutoZone, O’Reilly Auto Parts, and Advance Auto Parts have a strong foothold over their competitors. The leaders have developed extensive networks complete with distribution facilities and advanced supply chains, and their continued expansion is a clear effort to maintain a competitive advantage as new players enter the market.

The DIY customer E-commerce has also driven the buy online, pick up in store (BOPIS) trend that is allowing auto parts retailers to capitalize on online sales at their physical locations. In late 2017, AutoZone’s BOPIS sales actually outperformed ship-to-home sales. Customers can select from thousands of items online, and thanks to strategically and well-organized supply chains, AutoZone is able to ensure a seamless in-store pick-up experience that satisfies customer demand. These customers are typically doit-yourself (DIY) consumers who are making repairs to their own vehicles. DIY sales constitute approximately 80

percent of AutoZone’s business, 60 percent of O’Reilly Auto Parts’ business, and 40 percent of Advance Auto Parts’ business. By investing in regional and mega hubs, auto parts retailers can stock more inventory than a regular warehouse and quickly supply stores with customers’ in-store pick-up deliveries across thousands of locations. The sheer demand for auto parts is also driving the decisions of auto parts suppliers. U.S. automotive aftermarket sales within the DIY segment have increased an estimated $15 billion over the last 10 years. What’s driving that growth? Our aging American auto fleet. In fact, in 2017, the average car on the road was 11.6 years old. Further, Advance Auto Parts is embracing the ride-sharing market in an attempt to bolster its DIY customer base. In 2018, the company announced a new partnership with Uber to support the Uber Visa Debit Card program. The goal of the partnership is to incentivize the fast-growing population of ride-share drivers to complete their DIY retail needs at a discount and exclusively with Advance Auto Parts.

Looking to the Future Traditional auto parts retailers know, however, that DIY consumers may be the first share of the market attracted away by competitors like Amazon and Walmart, which means ensuring a steady business with commercial retailers and mechanics is an additional strategy to remain competitive. While the rising number of aging cars on the road may stoke immediate demand from DIY, as cars undoubtedly become more complex, DIY repairs will become equally as difficult. Today’s cars are equipped with sensors to detect lane changes, 360-degree cameras, and technology that requires professional support. Consumers with these types of vehicles are likely to become reliant on auto repair shops and mechanics in a trend that is known as do-itfor-me (DIFM). As auto parts retailers look to prioritize commercial business sales, companies will need to evaluate future demand with a forward-

WHAT’S DRIVING THE DEMAND FOR AUTO PARTS? OUR AGING AMERICAN AUTO FLEET — THE AVERAGE CAR ON THE ROAD IS 11.6 YEARS OLD.

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looking strategy. For the top automotive aftermarket retailers, profits from DIY consumers still make up a majority of business profits today, but directing attention to commercial repair shops and mechanics may be another preemptive strategy in order to remain competitive. Advance Auto Parts is creatively capitalizing on e-commerce to target this segment of the market. To enhance its B2B (business-to-business) revenue, this year, the company has worked to roll out Advance

Pro, which it describes as an e-commerce engine for professional customers. Since its launch, the platform has been used by nearly 20,000 professional Advance customers to order auto parts inventory. Investing in online B2B sales is a long-term priority for Advance moving forward, and the retailer is looking at online efficiencies to improve user experience. To do this, Advance recently implemented “cross-banner visibility,” an initiative to streamline the inventory search online for both professional

Building a Framework for Automotive Success Companies seeking locations for new and/or expanded facilities look for places that can provide a skilled workforce, low taxes and operating costs, and incentives to sweeten the deal. When it comes to these location advantages, Mississippi has perfected the formula for success for companies large and small. From a skilled and productive workforce to the state’s low corporate tax rate, Mississippi’s pro-business environment fosters growth and attracts new investment. State and local leaders work hand-in-hand with Mississippi’s corporate partners to create new career opportunities for generations. Thanks to the state’s highly efﬁcient economic environment, industries thrive, especially those in the state’s automotive sector. In April, Toyota announced plans to invest in new production lines

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at its automotive manufacturing plant in Blue Springs. The expansion represents a $170 million investment and creates 400 jobs over the next 12 months, bringing total employment to 1,900. Since 2007, Toyota has invested more than $1 billion in the Mississippi facility. The latest investment supports production of the 12th-generation Corolla using Toyota New Global Architecture. TNGA improves performance of all models, including providing more responsive handling and a more enjoyable feel while driving. It also shortens the development cycle for vehicle improvements and new vehicles. The plant currently employs 1,500 direct workers with 2,000 workers total on site. Production of the 12th-generation Corolla is slated to begin the ﬁrst quarter of 2019.

Another automotive company experiencing success in Mississippi is Toyota produced its one-millionth Corolla December 2017 at its Blue Springs, Miss., German automoproduction facility. In April 2018, the comtive supplier, hago pany announced plans for a major expansion, investing $170 million and creating Automotive. Hago 400 new jobs. is doubling its footprint in Iuka, Miss., to accomalready strong collaborative modate a new contract with efforts between postsecondBMW. The project represents ary education institutions a $4 million corporate investand companies. It also joins ment in new equipment and a long list of state incentives creates 60 jobs over the next to create a skilled workforce four years. and thriving business climate. With strong incentives, a Mississippi is able to help business-friendly environthese and other manufacturment, low operating costs, ers meet and exceed their robust infrastructure, and a production goals by enhancskilled workforce, Mississippi ing its workforce. The Missisdoesn’t take the foot off sippi Works Fund commits the gas when it comes to $50 million to train the next maintaining its reputation of generation of skilled workers. a powerhouse automotive The fund supports training manufacturer. through the state’s network of 15 community colleges Copy supplied by the and workforce partners. Mississippi Development The initiative enhances the Authority

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Industry is at a Crossroads. It’s called Woodstock, Ontario, Canada The City of Woodstock is a rapidly growing, industry based community, centrally located in Southwestern Ontario’s manufacturing corridor. Uniquely positioned at the crossroads of super-highways 401 and 403, Woodstock boasts one of the most optimal ground transportation systems in the province. Quick and easy access to international airports, shipping ports and rail systems, further add to Woodstock’s logistical excellence.

With these attributes Woodstock has attracted more than $2 billion in new investment and created more than 4500 private sector jobs over the last decade. At the intersections of industry, productivity and sustainability, it’s not surprising why economic powerhouses such as Toyota, Sysco & General Motors continue to invest in the City of Woodstock. (519) 539 2382 x2115 information@cityofwoodstock.ca

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customers and store associates alike. The goal of the strategy is to save time and resources on both sides of a transaction.

The Takeaway In the wake of technological advances, many retailers are experiencing improved supply chains. However, for traditional brick and mortar retailers without a strong online strategy, new Internet channels and buying habits have come at a cost. Ultimate-

ly, the auto parts sector has managed to remain more immune to these undesirable effects. As competitors continue to target this lucrative market, the automotive aftermarket industry should continue to leverage physical stores, digital B2C (business-to-consumer) and B2B, and the evolving supply chains that enable these marketplaces. By doing so, the industry may prove to be more resilient in the e-commerce revolution than others. <>

Automotive Manufacturers Thrive in Central, Southern Indiana and Southeastern Illinois Regional strength has already been established for the automotive industry to thrive in central and southern Indiana and southeastern Illinois thanks to a business-friendly climate, an able and ready workforce, and infrastructure to support growth for new and existing businesses.

ongoing efforts of the 18 electric distribution cooperatives of Hoosier Energy, and their community and economic development partners. Hoosier Energy’s economic development team is focused on the continued growth of the region’s automotive cluster.

Automotive giants Cummins, General Motors, Honda, and Toyota already call the region home and have found a recipe for success creating an industrial hotbed. According to Harold Gutzwiller, manager of Key Accounts and Economic Development at Hoosier Energy, “The combination of a skilled workforce, Midwest connectivity to leading automotive clusters, plus a business-friendly climate and affordable cost of living provides plentiful opportunities for businesses and their employees to thrive.”

An industry cluster analysis by Thomas P. Miller & Associates (TPMA) in April 2018 found several key competitive advantages of Hoosier Energy’s 59-county territory in central and southern Indiana and southeastern Illinois. From an economic climate ready to support automotive businesses and proximity to large industrial markets, there is already an established workforce in the industry and opportunities for new and expanding businesses to employ local residents.

This is due in part to the

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According to TPMA’s ﬁndings, the Hoosier Energy

region is within 250 miles of seven of the top 10 largest Honda Manufacturing of Indiana automotive cluster markets, based on total employment in the cluster. Altogether, 50 duction that is the Midwest. percent of U.S. automotive Because of this connectivity cluster jobs are in Indiana with other states, Indiana and Illinois or neighboring and Illinois rank highly in shipstates. ments of motorized vehicles. Indiana particularly is a The automotive strength of profitable place for automothe region does not hinge on tive production, as the state just one or two businesses as ranks high in both motor the majority of counties in the vehicle production and auHoosier Energy region have at tomotive job concentration. least two times the national rate of automotive workers. Gutzwiller noted, “It’s a Additionally, the region has credit to the vision and leadshown widespread growth ership of our electric coopover the past five years, adderatives that global automoing nearly 8,000 automotive tive leaders such as Honda cluster jobs since 2012. have chosen to invest in the Hoosier Energy region, and In addition to the workbased on TPMA’s findings, I force and business climate expect to see this trend carry strengths within the Hoosier on into the future.” Energy region, the area is a vital part of the regional Copy supplied by hotbed for automotive proHoosier Energy

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Designing the Aircraft Manufacturing Facility By Dan Wiegandt, Manager of Engineering, and Ken Stone, Vice President and Project Executive, The Austin Company

understood at a macro level by the facility planning and engineering team to ensure that an appropriate building concept is developed that is integrated with manufacturing needs. In addition, individual manufacturing areas within the building must be understood on a finite level to ensure that the facility and infrastructure supports manufacturing efficiently. Following are key considerations related to an assembly building that must be evaluated during planning to establish an appropriate building overall design: An aircraft in the paint bay ready for paint with man lifts in position

EVERYTHING ABOUT AN AIRCRAFT MANUFACTURING AND ASSEMBLY BUILDING MUST BE DRIVEN BY THE MANUFACTURING PROCESS.

ircraft manufacturers require costeffective, highquality, and often highly technical facilities. To address these objectives, this article provides an overview of several key considerations for the design and construction of plants for aircraft and associated components. .

Manufacturing and Assembly Buildings Everything about an aircraft manufacturing and assembly building must be driven by the manufacturing process, including process flow, process rate, and process requirements. The building must fully support the process, in addition to “keeping the weather out.” The manufacturing process must be well

• Manufacturing process type and style — The manufacturing process type and style may include flow line, fixed position assembly, parallel assembly, subassembly shops, and fishbone assembly, all of which will determine the building’s size and layout. Different manufacturing process flows will likely be used for different components or steps within the overall process. • Assembly rate and work-inprocess — The assembly rate and work-in-process determine the total building size. The building’s designers and engineers will need to know how many aircraft will be built — in a week, a month, or a year (the rate). Also, how many units will be in production at one time and in how many assembly positions. • Methods of assembling components — Methods of assembling components may include bonding,

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ance may involve true vertical lift cranes, under-hung cranes, transfer bridge cranes, multiple hoist cranes, fixed jib crane assembly stations, wire guided vehicles, air bearing jigs on floors, carts, tugs, forklifts, and man lifts. The selected systems impact the overall building height, structural support requirements, floor quality, floor flatness, floor joint types, and floor finishes. • Aircraft materials — Since aluminum has a high coefficient of expansion, stable temperatures are critical for The assembly line for Boeing’s 767 aircraft at the Everett, Washington, production plant accurate assembly and tolerances. Space may need to be provided to acclimatize components or parts received riveting, fasteners, or even welding. These methods from outside or other buildings prior to assembly. determine the necessary support utilities and poIn addition, exposure to direct sunlight is usually tential hazards to assembly workers, defining which prohibited due to thermal issues. Composite composafety features will need to be incorporated into the nents may also require critical humidity and ventilabuilding design. tion control. Composite materials, when machined, can create hazardous dust and fibers. Composites, • Sizes of components — Sizes of major components when bonded, often need solvents for cleaning and including wings, vertical stabilizers, engines, main adhesives that can have strong odors or generate body, and wing joint components are critical. These hazardous fumes. Raw composite materials are often determine the overall size of the facility necessary stored in freezers to extend their expiration date. to accommodate the various components, as well as Corrosion control coatings on metals, such as alodine the types of doors, their speed, and staging space and chromium, are often considered hazardous, but requirements. may be necessary to apply or for touch up at assemblies, joints, or fasteners. • Manufacturing tooling, fixtures, and jigs — Manufacturing tooling, fixtures, and jigs are directly • Manufacturing utilities — Most aircraft manufacrelated to the manufacturing process, space requireturing has a high reliance on clean, dry compressed ments, and utilities. Determining how components air as a primary utility. Therefore, providing redunmove into the tooling or whether the tooling moves dancy, reliability, maintainability, and distribution to meet components are critical issues. If tooling is and access flexibility for compressed air is critical. “parked” out of the way during certain processes or if there are aircraft moves, this means that additional 400Hz aircraft power is often a critical test requirement. It needs to be close to the aircraft due to space is required. voltage loss. Also, exhaust air for fumes or heat processes is often necessary. • Materials conveyance — Materials conveyance includes getting the components into the building Additional utility considerations are as follows: and moving them around inside. Components may ~ Critical lighting levels and color are needed for arrive via aircraft, ship, train, or truck. Specialized some processes and inspections. fixtures are often used to transfer components into ~ Vacuum is necessary for composite materials assemthe assembly building. Once inside, material convey-

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bly and bonding. Housekeeping vacuums for chip collection and cleanup are often required. ~ Fuel test agents are often piped to critical testing locations during component or assembly testing. Keep in mind, fuel test agents are combustible oils with special requirements, as well. Code officials and insurance underwriters need to understand the fire-related issues with these materials. ~ Hydraulic systems provide aircraft power to function flaps, wings, doors, and landing gear. Hydraulic systems need to be filled, drained, and may operate at high pressures.

MIES VAN DEHR ROHR SAID, â&#x20AC;&#x153;GOD IS IN THE DETAILS,â&#x20AC;? AND FOR AIRCRAFT MANUFACTURING FACILITIES, THERE ARE A LOT OF DETAILS.

Care must be taken for personnel safety, avoiding leaks or spills and to ensure over-pressurization or damage does not occur to the aircraft. ~ High-volume, low-pressure compressed air is used for pneumatic testing, such as fuselage pressure testing. ~ Aircraft grounding is important. Static electricity can damage sensitive electronic components. ~ In an automated assembly factory, data communication is often necessary everywhere on the shop floor, including at the aircraft and all jigs and fixtures. High speed and wireless networks enable

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critical data to be available or sent directly from the shop floor. • Utility distribution — Getting each of the required utilities to the right assembly location in a flexible and adaptable method can be a challenge. The option of overhead utilities distribution is impacted by cranes, while in-floor trenches can impact rolling material handling systems or prevent air bearings from working effectively. Recessed in-floor boxes are an option but impact flexibility for future factory modifications. In-floor retractable pedestals are expensive but proving to be a functional alternative. Electrical cords, air hoses, pipes, and conduit

running across the floor are safety issues, but are often necessary. Each individual manufacturing position may need a different distribution method based on its specific manufacturing or workflow requirements. • Foreign object debris (FOD) — No building materials, condensation, water, manufacturing waste, fasteners, or other objects can fall on or into the aircraft during assembly. All potential sources of FOD must be well thought out and mitigated. Broken light bulbs, fireproofing fibers, paint chips, and other buildingrelated foreign debris need to be prevented from entering the manufacturing process.

Growth in International Aerospace Markets Spurs Increased Production in New Hampshire CFM has just delivered the 1,000th LEAP engine with composite material fan blades and casings, and demand continues to climb as the company logs another $15.7 billion in orders from the Farnborough Airshow outside of London. The LEAP engine features composite engine components available since 2014, with the opening of a new SAFRAN

CFM International announced orders and commitments for just over 858 LEAP and CFM56 engines at the 2018 Farnborough Airshow, in addition to long-term services agreements, at a total value of $15.7 billion U.S. list price.1

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Aerospace Composites and Albany International co-locating in a 343,000-squarefoot facility located in Rochester, New Hampshire. The composite components have quickly become the preferred lightweight material as demonstrated by orders at the Farnborough Airshow, where 15 of the 16 orders were for the LEAP engines. This composite engine increases safety as well as provides significant energy savings over traditional engines. The LEAP engine is going through a massive ramp-up, “the fastest in the history of aviation,” says Brandon Wagner, executive plant leader at GE’s Hooksett Plant. “The LEAP-1B, which

goes to Boeing… we’re making 20 engines a week — that’s going to be 36 engines a week by the end of next year.”

CFM International workers examine a SAFRAN aircraft engine. SAFRAN works with Albany International to produce 3-D woven composite parts in Rochester, N.H.

Orders from the airshow were across all engine lines, servicing widebody, narrow-body, and regional jets. New Hampshire makes products for all of these engine platforms, so these orders go back directly to the Rochester and Hooksett, N.H., plants. In preparation for increased production, hiring is a priority, with more than 1,200 employed at the two plants. Rochester has 50 open positions and can provide customized training at the Advanced

Technology and Academic Center (ATAC). The ATAC is a satellite campus of Great Bay Community College, with a lab replicating the exact manufacturing experience as the actual plant floor at SAFRAN Aerospace Composites. Recruits are OSHA-certified and get a complete training in composites and nondestructive testing in six months. 1

https://www.safran-group.com/media/ cfm-logs-157-billion-orders-2018-farnboroughairshow-20180719

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VIRGINIA’S

• Exiting — Aircraft manufacturing facilities are often large buildings. Exit distances can often exceed code requirements. Exit egress from jigs or tooling platforms and around aircraft and materials must be well thought out. When exit distances become a problem, exit tunnels under the manufacturing floor can be used to create an exit path or an area of refuge. Emergency lighting is also a challenge in these large facilities. Designated marked exit paths are usually used.

CROSSROADS

• Noise — Some riveting systems are extremely loud and are a personnel safety issue. These manufacturing processes are often enclosed and isolated to prevent exposure to personnel and to limit hearing protection requirements within the overall assembly space. Often, components requiring these types of riveting are preassembled in controlled facilities outside the assembly building. Sometimes, these types of noisy or hazardous operations can be scheduled during off hours. • Fire protection — Typically, an aircraft assembly facility houses only unfueled aircraft. This limits the fire protection requirements, and wet sprinkler systems can be used. Early Suppression Fast Response (ESFR) sprinklers are often used. High Expansion Foam (HEF) is also an option. Aqueous Film-Forming Foam (AFFF) is now rarely used in assembly facilities, due to the potential environmental issues and requirements relating to disposal. It is important to note that the facility is a manufacturing facility — per code, it is not an aircraft hangar. The aircraft is not able to fly and is, therefore, not yet an airplane. This is a critical code and hazard distinction in selecting the appropriate fire protection and addressing other code requirements. Additional special attention must be understood and given to the unique requirements of final finish buildings. These types of facilities include paint and paint preparation, as well as final assembly, delivery center, and test facilities. Read about these considerations, including manufacturing process, environmental conditions, stripping, fire protection, and more, at http://theaustin.com/market-insights. <>

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3D Printing: A Game-Changer for the Manufacturing Industry BY Sharmistha Sarkar, Content Writer, Allied Market Research

3D design data described in a digital file is used to develop a component by depositing materials â&#x20AC;&#x201D; including metals, plastics, and composites â&#x20AC;&#x201D; in layers.

3D PRINTING HAS BEEN EXPERIENCING PHENOMENAL GROWTH AND IS AFFECTING THE DESIGN, DEVELOPMENT, MANUFACTURING, AND DISTRIBUTION PROCESSES.

echnology and innovation are reshaping industries across the world at a breathless and breakneck speed. 3D printing or additive manufacturing is one technology that has revolutionized the automotive industry. Significant advances in the field over the past decade have transformed the design, development, manufacturing, and distribution processes in the sector. They have made way for novel designs, lighter and safer products, shorter lead times, and lower costs. Hence, 3D printing has become the darling of the automotive world, enhancing the functionality and value of existing products in every way. The concept seems new but has been around for more than

30 years. It involves a process where 3D design data described in a digital file is used to develop a component by depositing materials in layers. The materials used in 3D printing include a wide range of metals, plastics, and composite materials. The market for automotive 3D printing has been experiencing phenomenal growth over the years since the advent of the technology. A report by Allied Market Research1 states that the automotive 3D printing industry is likely to reach $2.73 billion by 2023, growing at a CAGR of 19.7 percent from 2017 to 2023. The need for efficient management of logistics, as well as reduced manufacturing time and associated costs, is driving the demand for the industry. Therefore, 3D printing exhibits wide applications within the sector for prototyping and tooling, research and development, and product innovation. On the other hand, the market faces certain challenges such as high cost of 3D printing software and the dearth of skilled labor. The additive manufacturing field is highly competitive and, therefore, large and small players in the space focus on specific capabilities that can lead to greater competitiveness. Some of these capabilities include fewer design restrictions and direct production of final components by eliminating the need for new tooling. Currently, several developments are taking place in the industry as follows:

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Local Motors recently completed installation of a composite 3D printer at its Knoxville, Tenn., micro-factory that will be used to print components for the company’s Olli vehicle, an autonomous 3D printed shuttle bus.

• L ocal Motors installs world’s largest composite 3D printer Local Motors, a vehicle manufacturing company

based in Arizona, recently completed the installation of a composite 3D printer called the Thermwood LSAM at its Knoxville, Tenn., micro-factory. Considered the largest in the world and spanning 10 feet by 40 feet, the machine will be used to print components for the company’s innovative Olli vehicle, an autonomous 3D printed shuttle bus. The Thermwood LSAM system was developed with the intention of manufacturing large-scale structures and parts using composite materials and an additive approach.

• Audi adopts Stratasys 3D printing In June 2018, German automobile manufacturer Audi announced that its Pre-Series Center and Plastics 3D Printing Center in Ingolstadt, Germany, adopted

Proactively Working to Address Workforce Demands It’s no secret that there is a national shortage of skilled workers in the precision machining and advanced manufacturing industry. At the same time, there is a high rate of unemployment among veterans. Many communities are looking for solutions to this issue and the City of Lebanon, Indiana, is no different.

pool to choose from. City representatives contacted the Vincennes University to share their vision for workforce development and the idea grew from there. Officials from the City of Lebanon, machine-tool builder Haas Automation, and Vincennes University have opened their doors to a new advanced manufacturing Training Center. The 20,000-square-foot Gene Haas Training Center will offer CNC and robotics training programs using the latest state-of the-art machine tools and equipment.

Lebanon, Indiana, has a rich history of manufacturing, but after receiving encouragement from the business community, local officials wanted to ensure that the businesses have a strong workforce

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This center will address both Dan Flick, site director for the Vincennes/ issues, as well as Gene Haas Training Center, said in addition provide training for to its normal classes, the facility would also offer companies training sessions for their the general public. employees. Once a company decides A 16-week intensive what it needs for its employees, the training center will build a session around what is training program desired. According to Flick, it could be a will also be offered couple of days or a couple of weeks. for veterans. According to Doug City officials view this as a Bowman, director of VU’s game-changer for the comHaas Technical Education munity. Not only will it serve Center, “Indiana alone will as a resource for existing need 7,000 new machinists over the next five years. businesses, but they hope it Providing this high-quality will entice prospective businesses as well. training on state-of-the-art equipment will help bridge the advanced manufacturCopy supplied by IMPA ing skills gap.”

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Stratasys 3D printing methods. Stratasys’ J750 fullcolor, multi-material 3D printer is used to produce full-color physical models of automotive parts, reduce the time needed for prototyping, and accelerate the design verification process. The design verification process is crucial in automotive manufacturing as it determines the approval or denial of new design concepts before a new vehicle is developed. According to Audi, it has achieved prototyping lead time reductions by up to 50 percent for certain parts with full-color, multi-material print-

ing capabilities. One of the components that has benefitted from the printer is tail light covers of the vehicle. The covers were typically prototyped using milling or molding and had to be made in multiple parts.

• Wipro3D launches center for metal 3D printing In March 2018, Wipro3D, the additive manufacturing unit of Wipro Infrastructure Engineering, introduced a state-of-the-art solution and experience

Aluminum Supplier to the Auto and Aero Industries Teams with Local College to Develop a Skilled Workforce Northeastern Kentucky has an available workforce that is ready to get back to work. That was one of the major selling points of the region when its newest resident, Braidy Industries, announced plans in 2017 for a 2.5 millionsquare-foot aluminum mill in Ashland’s EastPark. On the heels of the facility’s groundbreaking this past June, the company is taking the necessary steps to ensure its workforce is equipped with the necessary skills upon opening in 2020. Braidy has partnered with Ashland Community and Technical College (ACTC) to offer the Advanced Integrated Technology (AIT) degree track to prepare students for potential employment at the company upon completion of the program. The ﬁrst semester of courses for the

track began on Aug. 13, with approximately 135 students enrolled in hopes of landing a position at the state-ofthe-art rolling mill two years from now. The idea for the degree track began with Braidy CEO Craig Bouchard, who immediately saw the signiﬁcance in developing a workforce with a wide range of skills. The model stands as an example of how other businesses in rural areas across the state could encourage and expedite workforce training efforts. Students will not only tackle subjects such as manufacturing principles, robotics, PLC programming, drive conﬁguration and advanced electric motor control, but also gain valuable soft skills along the way. Critical thinking,

communication skills, problem-solvStudents in ACTC’s Advanced Integrated ing strategies, and Technology (AIT) program met for the ﬁrst day of classes on Aug. 13. troubleshooting techniques for the latest high-tech equipment The degree track is a parwill be a substantial part of ticularly great opportunity for the AIT curriculum. the northeastern Kentucky region, where the decline Students also will gain handsof the coal industry and on experience with training closures and layoffs by other on equipment that will be local employers — such utilized at Braidy, in addition as AK Steel and Kentucky to three four-week internship Electric Steel — have left the opportunities that will help to workforce in search of new ensure a culture ﬁt for each opportunities. Even before potential employee. Braidy Industries opens its doors, the company is AIT graduates with a cumulashining a light on how to tive GPA of 3.0 or higher and embrace and expand comwho remain drug-free while munity resources to meet meeting other application local needs. process requirements will be considered for full-time emCopy supplied by the ployment at Braidy, where Kentucky Cabinet for starting wages are expected Economic Development to be in the range of $65,000 per year.

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center for metal 3D printing in Bengaluru, India. The first-of-its-kind center which measures 12,000 square feet was inaugurated by Wipro Chairman Azim Premji. Equipped with leading-edge build technology, post-processing, research, characterization, and validation facilities, the center is the country’s foremost fully integrated metal additive manufacturing facility, recommended with AS9100 Rev D certification.

• AMFG launches AI software platform for industrial 3D printing In June 2018, a novel software platform that employs artificial intelligence to automate additive manufacturing production was launched by AMFG, a leader of automation software for industrial 3D printing. The AI capabilities of the company provide manufacturers with complete production automation for end-use parts, including scheduling automation, printability analyses, and post-processing automation.

• Coherent acquires O.R. Lasertechnologie GmbH In May 2018, Coherent Inc., a leading provider of laser and laser-based solutions, acquired O.R. Lasertechnologie GmbH, a company that manufactures high-precision tools for laser additive manufacturing with the aim of increasing the former company’s product portfolio in additive manufacturing. The acquisition provides Coherent with a complementary product line that increases its solutions portfolio in additive manufacturing. Moreover, the deal allows the latter’s products to seamlessly integrate with the former’s current offering. O.R. mainly deals with direct metal deposition and selective layer-melting technologies and systems cutting, welding, marking, and engraving serving industries such as automotive, dental, aerospace, and others. <> 1

https://www.alliedmarketresearch.com/automotive-3d-printing-market

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