Manufacturing Extension Partnership

OVERVIEW

The MEP of Utah is a non-profit organization that provides assistance to manufacturers throughout the state with services to sustain and improve productivity, expand capacity, enhance growth and increase profitability. It assesses the individual needs of a manufacturer, identifies the roadblocks to success, opportunities for improvement and growth, and helps the company to leverage private/public resources and to access a consistent set of services to maximize their potential and grow their business.

The MEP is the nation’s champion of manufacturing. MEP Centers are located throughout the U.S. and are affiliates of the National Institute of Standards, U.S. Department of Commerce. Chartered to assist small and medium-sized manufacturers (those employing less than 500 workers), the MEP potential service base includes 99% of the 3,800 manufacturers in Utah. However, MEP has limited resources and less than 5% of the manufacturers have access to MEP in any given year. Those that are assisted by MEP report significant results.

A study of the economic impacts of MEP of Utah prepared by Utah State University shows that MEP served 494 total companies in 2008. Major projects assisted 72 companies reporting measurable impacts. The USU study concluded MEP’s impact on the economy in 2008 to be:

• Additional Wages- $122.5M • Additional Jobs- 2,992 • Additional Industrial Output- $659.4M • Additional Indirect Business Taxes- $14.7M

The nature of manufacturing in Utah is diverse, entrepreneurial, and falls under the classification of “small business”. Yet these small companies have large impacts on the state’s economy. Manufacturing provides significant employment with an industry payroll over $5.3 billion-the largest industry payroll in the state-and is one of only 3 industry sectors that employ more than 100,000 Utahns.

Year-to-year manufacturing employment continued to decline during the first 3 quarters of the fiscal year ending June 30. Data for Q4 show a slight rise in em-

ployment to 111,000. Whether the industry has truly hit its floor is yet to be determined. The U.S. economy shows some increased demand for manufactured goods, but it is still weak. Some sectors of the Utah manufacturing economy such as aerospace (especially NASA-linked) face uncertainty in the new fiscal year.

Further analysis raises areas of concern. Each of the following shows a small, but steady decline: • Utah’s manufacturing payroll as a percentage of total state covered payroll • The percentage of the average manufacturing wage rate above the average state salaried wage for all employment sectors • Utah’s manufacturing employment as a percentage of total state covered employment • The number of manufacturing firms is decreasing as a percentage of total firms, and is not keeping up with the pace of the overall economy.

Manufacturing Employment 20 month average: 121,549

Manufacturing lost 6,581 jobs during the first 3 quarters of FY ending June 2010 before gaining back 1,800 jobs in the last quarter.

IM Flash Technologies,

an Intel-Micron joint venture located in Lehi, Utah, is at the forefront of NAND manufacturing technology. In the three short years since the company was formed, IM Flash has produced the smallest memory chip in the industry, the fastest NAND on the market, and become the third largest manufacturer of NAND in the world. IM Flash was recognized by MEP Utah as the 2009 Manufacturer of the Year for Innovation and Technology Commercialization for processes.

MEP’s mission is to work with existing Utah manufacturers to sustain and improve their productivity, growth and profitability. Profitable Manufacturing Growth has 5 focus areas: 1) Technology Acceleration; 2) Continuous Improvement; 3) Sustainability; 4) Workforce; and 5) Supplier Development. MEP continues to improve and expand its capabilities to serve Utah’s manufacturers. GOED utilizes MEP to promote the economic strength of manufacturing by its inclusion in state, regional, local seminars and conferences, as well as one-on-one referrals to companies seeking assistance.

MEP’s greatest impact is at the enterprise level, where it can work with company owners, managers and workers to assess needs and prepare a plan to meet company-spe-

Manufacturing Statistics July 2008 – January 2010 Manufacturing Employment 20-month average: 121,548 Manufacturing Monthly Wage 20-month average: $3,645 Manufacturing Establishments 20-month average: 3,845

cific issues. MEP services go beyond Lean manufacturing applications and tools. Enterprise development & management and quality management systems are other factors MEP addresses for increased productivity, growth and profitability.

MEP services address company functions across the enterprise, from the front office to the shipping dock. MEP Centers across the country are helping U.S. manufacturers grow and compete globally by applying proven principles to both the bottom line as well as the top line. This makes MEP in Utah more relevant than ever, as Utah manufacturers need to not only cut costs and improve performance, but to define their markets and produce products that differentiate themselves to their consumers. MEP is strategically positioned to work with GOED in the state’s economic development initiatives.

GOED and MEP as partners have not lost sight of the overall importance of manufacturing to the state- its large employee base, livable wages, tax contributions, creation of secondary jobs and a major role in producing most of Utah’s exported goods. MEP will continue to be a resource to the small and mediumsized manufacturers throughout the state and help the entrepreneurial spirit of Utah companies succeed in an ever-changing economy. In both market upturns and downturns, manufacturers face the challenge of differentiating themselves and determining how to bring what is different to the market in a more efficient, costeffective way. As one company official stated, “...MEP has provided our company with training that will allow us to succeed...The most exciting part for me, personally, is seeing the excitement of our associates when they catch the vision and see the success...Thanks for all your help. We could not have done it without all the instruction and follow up.” – Mike Jensen, VP Operations, Ophir-Spiricon, Logan

For additional information about the Manufacturing Extension Partnership visit www.business.utah.gov or contact Stephen Reed, Director of Operations, at sreed@mep.org or 435-797-3789.