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Coronavirus Manufacturing Special Coverage

Making Do

Kristin Carlson

Kristin Carlson says the pandemic has actually helped business at Peerless Precision, especially when it comes to making parts for defense and law-enforcement-related products.

Mark Borsari says he hasn’t been on a plane since a vacation in early March.

By his reckoning, that’s by far the longest stretch he can remember when he hasn’t been flying somewhere, especially in his role as president of Palmer-based Sanderson MacLeod, a maker of fine wire brushes for everything from makeup kits to gun cleaning.

The six months on the ground has been a time of reflection — and even humor.

“I’m sure my wife’s probably thinking I should be on a plane more,” said Borsari with a laugh, adding that he’s not at all sure when he actually will.

But being effectively grounded from air travel is just one of the many ways COVID-19 has shaken things up for manufacturers, and, in the larger scheme of things, perhaps one of the least consequential given the way Zoom has become the preferred method for communicating with clients and employees alike.

Indeed, the pandemic has prompted everything from weeks-long shutdowns to scrambling for needed parts; from strategies for keeping employees safe to the need to manufacture different products — often PPE — to keep workers busy because demand for the products that were being produced has slowed or stopped.

Much has hinged on the word ‘essential’ — a status bestowed on many manufacturers in the 413, an area with a large number of shops making parts for aerospace, defense, or the broad healthcare sector.

Sanderson MacLeod makes products for all those fields, said Borsari, noting that, after a short but still tension-filled time of uncertainty regarding the company’s status, it was declared essential. The same with Westfield-based Peerless Precision, a company that makes, among other things, products used in the cryogenic cooling systems for thermal imaging, night vision, and infrared cameras — items that are actually in greater demand because of all the tension in the world at the moment.

Mark Borsari

Mark Borsari says being deemed ‘essential’ certainly helps, but there is too much uncertainty with this pandemic for any company to feel secure about the future.

“Any time there’s any trouble going on in the world and more money is being put into the defense budget, we benefit from that,” said Kristin Carlson, the company’s president. “We’re getting new engine parts, new fuel-injection parts … things we’ve never made before. Any time there’s unrest in our country or anywhere in the world, the Defense Department spends more money.”

But not all area manufacturers have been so fortunate. Indeed, while golf balls are important to many, they are not ‘essential’ in the eyes of the state’s governor, so the Callaway plant in Chicopee was shut down as it was heading into its busiest time of the year — the start of the golf season in the Northeast and other colder climes. And shutting down a plant that size, which was running three shifts six days a week, is a complicated undertaking, said Vince Simonds, the company’s director of Global Golf Ball Operations.

“It’s difficult to shut it down so abruptly and then wind it back up again,” he said, noting that the massive plant was shut down from March 25 until May 18, when the first phase of the state’s reopening plan went into effect. “But overall, we’ve done very well.”

Fortunately, the company has been helped by something that could not have been foreseen in those dark days of March — a surge in popularity in the game of golf resulting from the fact that it is one of the few sports people can play while also socially distancing themselves from others.

“It’s difficult to shut it down so abruptly and then wind it back up again. But overall, we’ve done very well.”

This surge now has the company running three shifts seven days a week, said Simonds, adding that Callaway is now struggling to meet global demand, especially for its lower-priced, entry-level products (more on that later).

But even for those companies that were not shut down, have not seen shrinking demand for the products they make, or been helped by the rush to take up golf, the pandemic has led to a time of challenge, uncertainty, and questions about what will, and won’t, come next. And this is a difficult climate to operate in, said Borsari, who tried to put things in perspective for BusinessWest.

“The biggest challenge is that there is no playbook for what we’re dealing with,” he explained. “This thing has come through and almost indiscriminately picked out specific companies and industries and devastated them and left others somewhat unscathed. It depends on who their market is, where they are on the supply chain, who their vendors are, who their customers are … there are so many variables.

“Normally, when you run into these challenges in business, you can at least do some research or talk to some people who have been through it before to get a gauge for what was successful,” he went on. “With this, there is none of that.”

Parts of the Whole

Flashing back to early March, Carlson noted that, at least in one respect, the company was ready for what was coming.

“We had just put in a very large order for toilet paper and other supplies from Staples,” she recalled, adding that, soon thereafter, such essentials were certainly hard to come by. “I was telling everyone that I had something like 180 single rolls of toilet paper … so if you guys can’t find any, we’ll sell it to you for cost.”

But beyond that, there was little way to anticipate, let alone prepare for, the pandemic and the many ways it was going to change the landscape for all businesses, and especially manufacturers. And for many, there was uncertainty about whether the doors would remain open as the state began to shut down businesses to help slow the spread of the virus.

Fortunately, for many, this uncertainty was short-lived.

Vince Simonds

Vince Simonds says a pandemic-related surge in the game of golf has helped take the sting out of being shut down for two months this past spring, Callaway’s busiest time for making golf balls.

“We’re the largest medical and surgical manufacturer in the country, and we also do a lot of work for government agencies and the military with gun-cleaning products,” said Borsari, adding that Sanderson MacLeod was able to get the green light from the state and the town of Palmer to remain open for business.

“Getting deemed essential was important for us,” he recalled. “One of the concerns for the people was whether they’d have a job; they were seeing all these companies shut down around them, and that was the biggest concern they had from the beginning — whether we would be allowed to stay open.”

The company has been fortunate in other ways as well, he said, noting it had undertaken catastrophic planning and redundant sourcing before the pandemic, so there were few if any supply-chain issues once COVID struck. And its supply needs are relatively simple.

“Some of these companies are putting together computers with 4,000 parts,” he explained. “We’re really working with wire fiber and attachment components; it’s not nearly a deep a supply issue as other companies had.”

Meanwhile, demand for many of the products made by the company, especially those in the gun-cleaning realm, has actually grown, again because of the growing levels of turmoil in the world.

“One of the concerns for the people was whether they’d have a job; they were seeing all these companies shut down around them.”

Carlson sounded similar tones, noting that, in many respects, the pandemic hasn’t impacted the overall bottom line; in fact, it has helped generate more business with some clients.

It didn’t look that way back in the spring, when the state’s shutdown, which most thought would last a few weeks, instead stretched to nearly two months. “At that point,” she said, “I was pretty confident that 2020 was going to be a bust.”

Instead, it’s shaping up to be better than last year — which was quite solid.

“We’re not just steady, we’re busy, and we’re getting busier,” she told BusinessWest, adding that the company had a record July, usually one of its slower months. “A lot of that’s on the defense, not aerospace, side, but also our defense aerospace has picked up a lot as well.”

But in addition to creating more work, the pandemic has also changed how work is carried out, creating a number of challenges for those managing plants, especially early on in the pandemic, when there was little guidance on how to keep workers safe — and also little hand sanitizer to be found.

“We had to get people to understand that they can’t stand shoulder to shoulder with one another — you have to maintain that six feet,” Carlson said. “I had put limits on the number of people who could be in rooms with closed doors; we’d take turns disinfecting the entire shop. In the morning, one guy does the shop floor, at lunchtime, another one does it, and at the end of the day, they do it again.”

Simonds agreed, and noted that, by strictly enforcing the rules and following the protocols, the plant has seen no cases, and no interruptions, since reopening.

“We’re sticking to the CDC protocols, and it’s worked for us,” he said. “Everyone is temperature-screened; everyone wears a mask at all times; we’re restricting meeting rooms based on square footage and number of people in the rooms; no employee gatherings beyond the number cited by the state; anyone who goes on vacation and travels outside of Massachusetts to a restricted area has to follow protocols coming back in.

“One of the challenges was just getting used to things,” he went on. “Wearing a mask, especially in the summertime, is difficult, but people have been great, and we’re all used to it now; it’s just a matter of practice.”

Round Numbers

For Simonds and his team, the state-ordered shutdown came, as noted earlier, during the busiest time of the year for the facility, which has enjoyed a resurgence over the past few years as Callaway has made huge strides in gaining market share within the golf-ball industry.

And turning everything off is, as he said, a somewhat complicated undertaking.

“For any machines that have materials in them, they have to be purged properly,” he explained. “We need to take all the raw materials that are sensitive to environmental conditions and put them in environmentally controlled areas. We need to take care of WIP — work in process — and try to process as much as possible so we don’t have time-sensitive WIP sitting on the production floor.

“It’s a matter of systematically shutting down operations so we don’t have inventory sitting in the wrong places,” he went on, adding that the process was made more complicated by the fact that no one really knew for how long the plant would be dark.

Meanwhile, on the personnel side, most all employees were furloughed — and nearly all of them came back, he went on, adding that the operation slowly wound back up, but since then, activity has sped up dramatically, with many of those employees securing large amounts of overtime.

“We’ve gone from zero to 100 as quickly as we could. Once the golf courses started opening up, the demand for product was almost unprecedented — there was so much golf being played,” Simonds said, adding that courses in most all states were open several weeks before the plant was reopened — if they had closed at all. “And the golf business has remained pretty strong; we’re chasing demand.”

The same is true at Peerless and Sanderson MacLeod, where, in addition to meeting orders, the plants are coping with new ways of communicating, meeting as teams, and planning, as much as possible, for what might come next.

And also learning and growing from the shared experience of not only coping with a pandemic and all the challenges it has brought, but in some cases thriving.

Indeed, Carlson said the past several months have brought a close workforce even closer together as they contend with the protocols, the surge in business, and a shared desire to be prepared for the worst-case scenario while hoping for something much better.

Borsari agreed, and said some of the real ‘opportunities,’ a word he’s hesitant to use in this climate, come in the broad area of relationship building when it comes to both clients and the team at Sanderson-MacLeod.

“It’s been a unique opportunity to connect with our client base in a way we haven’t done before,” he told BusinessWest. “It’s all about collaboratively figuring out the best way to keep both companies open; we’re really had a lot of good relationships become even better because we realize how dependent we are on one another.

“And as an organization, finding our way through this together has made us stronger,” he went on. “We’ve done everything we can as a company to make this a place of normalcy. Everything else around them was going crazy, and one of the key points we made in March was to do everything we can to follow the mandates and make sure our people are safe, but we also want to make sure to maintain normalcy as much as we can.”

Up Off the Floor

Looking ahead, Carlson said her company has taken what steps it can to be prepared for what might come next.

Yes, that means stocking up on toilet paper, hand sanitizer, and other pandemic-related needs that were in such short supply when the first wave hit six months ago.

“I’m ready for us to keep moving the way we’re moving,” she explained. “Even if we did walk back any of the phases of the reopening or went back into a shutdown, we’d still be open and still going at the pace we’re going, and perhaps be even busier; we’re prepared.”

But, as Borsari noted, even for manufacturers in the coveted ‘essential’ category, there is too much uncertainty to ever be comfortable, or fully prepared.

“Nothing is stable,” he said. “Just because we’re essential doesn’t mean anything’s safe or easy; so much is dependent on the attitude of the state, or the people who decide to come to work or not come into work, tariff measures, travel bans … all of these could have an impact.”

Such is life in a sector that, like most others, has seen COVID-19 change almost everything and create conditions that are anything but business as usual.

George O’Brien can be reached at [email protected]

Features

Casting Call

Laura Teicher and Adam Rodrigues, seen here at FORGE’s satellite office in the Springfield Technology Park, say the agency is more than living up to its new name.

The agency formerly known as Greentown Learn has been rebranded as FORGE, a name that more effectively speaks to its mission of making connections between entrepreneurs and manufacturers that can create prototypes of their products or actually produce them. Since its inception, FORGE has facilitated such connections for nearly 200 companies, helping improve the survival rate of such ventures while also bringing more work to a number of area manufacturers.

Neil Scanlon equated it to a sales force — a different kind of sales force, to be sure.

He was referring to the agency now known as FORGE and formerly known as Greentown Learn — a rebranding was deemed necessary, and we’ll get into that in some detail later — the nonprofit arm of Greentown Labs in Somerville, which loudly proclaims itself the “largest clean-technology incubator in the United States” and “the best place in the world to build a clean-tech hardware company.”

FORGE was created to help those entrepreneurs developing this hardware to create prototypes and find manufacturers that could build the products they’ve developed and specific components for them — more specifically, manufacturers in Massachusetts and especially Western Mass.

Indeed, one of the primary goals behind FORGE was to build what’s being called an east-west connection — products developed in the eastern part of the state and prototyped and produced in the western region. It’s still a work in progress, but there have been a number of matches made, including several with Scanlon’s company, Worthington Assembly in South Deerfield.

“It’s like a sales force in a way — not a traditional sales force in most respects. It’s giving recognition to a manufacturer that might be able to help a startup — a connection that might not have happened otherwise.”

He’s not sure exactly how many of these matches have been made because many of the orders are placed through a sophisticated online system. But he’s quite sure that a good number of boxes heading out the door are bound for Somerville.

“Worthington ships to Greentown quite often, and I don’t always know how that connection was made,” he said, adding that he does know that his firm, which specializes in circuit-board assembly and has customers in many different sectors, has gained some new customers through FORGE.

“It’s like a sales force in a way — not a traditional sales force in most respects,” he went on. “It’s giving recognition to a manufacturer that might be able to help a startup — a connection that might not have happened otherwise.”

This is exactly what those at Greentown Labs had in mind when they created its sister organization, now known as FORGE, said Laura Teicher, the agency’s executive director.

As she talked with BusinessWest in FORGE’s satellite office in the Springfield Technology Park in Armory Square, she said the nonprofit is succeeding with its basic mission of helping to see that products blueprinted in Massachusetts are prototyped and manufactured here, when possible.

“Through its Western Mass. office, FORGE is able to engage a critical cluster of precision manufacturers in producing prototypes, early runs, and production at scale, deepening the east-west link between Eastern Mass. startups and Pioneer Valley manufacturers that was started with the support of leadership in the House of Representatives,” she said.

Startups like RISE Robotics, which is working to replace energy-intensive hydraulic systems with clean and efficient electronic models, and has engaged area manufacturers such as Peerless Precision and MTG Inc., both in Westfield, to create prototypes.

And like Clean Crop Technologies (CCT), a Haydenville-based startup working to solve the crisis of aflatoxin infection in grain and nut crops, which reportedly causes more than 100,000 deaths and $1.7 billion in lost revenues each year, especially in developing countries.

Led by co-founder and President Dan White, the company has, through FORGE, connected with Newbury, Mass.-based Product Resources to create a prototype of a post-harvest assembly-line-like fumigation process that removes up to 90% of aflatoxin from crops in less than 20 minutes.

But White noted that some components for this system, which he equated to the sandwich-making line at Quiznos, may be produced by manufacturers in the 413.

For area manufacturers, meanwhile, FORGE acts as that sales force that Scanlon mentioned by introducing entrepreneurs to area shops and acquainting them with their capabilities. And most need some help in this critical step in bringing a product to the marketplace, because they don’t know what skills are needed or how to find a firm that possesses those capabilities.

“Greentown Labs is inventing products in Massachusetts, and FORGE’s mission is to make sure they’re made in Massachusetts,” said Kristin Carlson, president of Peerless Precision, adding that she conducts ‘lunch and learns’ in Somerville and takes other steps to educate entrepreneurs not only about the firms in the area and what they can do, but also how to approach manufacturers, what those shops need to submit a quote, and about the higher quality they’ll get if they choose a Baystate firm instead of one overseas.

Scanlon agreed. “It’s not easy to figure out who might be a good match just by doing Google searches,” he said. “Especially when it comes to small, Western Mass. shops that are not strong in marketing themselves — that’s where FORGE comes in.”

For this issue, BusinessWest talked with manufacturers and entrepreneurs alike to find out how FORGE is living up to its mission — and its name.

Testing Their Metal

Teicher told BusinessWest that, even as she was being interviewed for the job of executive director of Greentown Learn more than a year ago, she was thinking the agency’s name didn’t effectively convey what it was all about, and that it needed to be changed.

And when she won the job, she made it one of her first priorities to orchestrate a rebranding.

This was a months-long process, she noted, adding that the agency wanted a name that reflected its mission, a task made more difficult by the fact that most words associated with manufacturing, making, metalworking, and so on were not usable because they’d been copyrighted or trademarked, or incorporated into a URL.

“It might be six months or 12 months later that you hear from the entrepreneur who has a set of fabrication files, and they need something quoted.”

“Any cool name that you can come up with that signals hardware has been taken,” she said, adding that some that weren’t already taken came with other problems, or baggage.

Like ‘KINECT,’ a brand option that was one of several finalists, if you will. It’s a play on words, and an effective one, blending ‘connect’ with ‘kinetic energy.’ Problem was, said Teicher, that research revealed this same name was attached to a failed Super Nintendo app.

“We were very close; we were attached to it for a while,” she said. “It was great because we’re forging connections, we’re working with physical products, and it’s pretty simple. But we didn’t want to be mixed up with a failed product at all. And there’s something a little childish about it because of the K’Nex toys — so we didn’t want that association, either.”

Kristin Carlson says FORGE helps educate entrepreneurs on the capabilities of Bay State shops and also the advantages to getting work done in the Bay State instead of overseas.

Eventually, those involved with the process settled on FORGE, which is not an acronym for anything (the capital letters are used for emphasis), but a name that drives home that ‘forging relationships’ is a critical part of the equation.

Which is important because, while the companies at Greentown Labs are pushing the envelope when it comes to clean-tech hardware, they often struggle to find partners to take their concepts off the drawing board — or the computer image, as the case may be.

And they are likely unaware of the large and in many ways historic precision-manufacturing sector in the Pioneer Valley, a sector born, in many respects, essentially where that satellite office is located, within what was the Springfield Armory complex.

FORGE makes introductions to companies in a number of ways. It organizes tours — manufacturers we spoke with said they have hosted a number of visits as a result of the initiative — and also helps companies draft requests for proposals for specific projects. And it organizes events such as the first annual Supplier and Innovation Showcase at Greentown Labs.

The gathering was designed to support connection-building efforts between inventors and makers, and it drew more than 200 attendees from the innovation and manufacturing ecosystems, said Teicher, who noted that, since its inception in 2015, FORGE has helped more than 190 startups source their supply chain with what she called “right-fit and ready local connections to manufacturers,” thus helping them over some critical humps that often derail such ventures.

“These startups have an 85% survival rate to date, far exceeding national standards, proving that FORGE has identified and provides a critical intervention for these startups,” she told BusinessWest, adding that programming has led to more than 130 contracts to manufacture innovative physical products and components in the region, infusing a known economic value of roughly $11 million — and counting.

The Western Mass. satellite office plays a key role in these efforts, said Adam Rodrigues, director of Regional Initiatives, adding that it serves as a clearinghouse for connecting startups with area manufacturers, often through those aforementioned tours, which are often eye-opening.

Companies may or may not be ready to seek manufacturing help when they take the tour, he added, but they’ve made a connection and generally go home with a business card. And when they are ready, they use it.

Scanlon agreed.

“Oftentimes, the connection may happen much later — it’s not right after the tour,” he explained. “It might be six months or 12 months later that you hear from the entrepreneur who has a set of fabrication files, and they need something quoted.”

Getting a Lift

The case of RISE Robotics, which has recently ‘graduated’ from Greentown Labs and is now operating in Somerville, exemplifies just how FORGE makes those connections.

Arron Acosta, co-founder and CEO, told BusinessWest that the company is making strides in its efforts to create a ‘green’ alternative to energy-intensive hydraulic systems used in everything from fork trucks to bulldozers to tractor trailers. Through FORGE, the company was connected with three manufacturers with the requisite capabilities, including Peerless and MTG, to produce prototypes of the RISE cylinder, which, according to the company’s website, “delivers hydraulic-like performance in a simple, maintenance-free and fluid-free package.”

The prototypes developed by the firms in this region have not moved to the production stage for various reasons, he said, but the experience of working with those firms has been very beneficial on the company’s long climb to find the optimal market fit.

CCT is another solid example of how FORGE works, said Teicher, noting that the nonprofit not only connected the company with relevant manufacturers, but also helped it find R&D lab space in Haydenville and at the Institute of Applied Life Sciences at UMass Amherst that allowed it to remain in Western Mass.

White said the ag-tech startup combines air with electricity to degrade contaminants in food and is focusing much of its energies on combating alfatoxins on peanuts.

“But as a technology and as a venture, we’re looking much bigger and broader than that over the long term,” he told BusinessWest. “By sterilizing the surface of foods with these ionized gases, we can get up to two to three times shelf-life extension for perishable foods; for example, we’ve been treating blackberries, and we’ve been able to get an additional five days of shelf life in the refrigerator because we’re knocking off that surface mold while otherwise not affecting the quality of the food.”

White said the company, looking to scale up, was drawn to the Bay State and, more specifically, Western Mass. — instead of Virginia, where his partner in the venture was living — because of the extensive innovation ecosystem in the Commonwealth.

And FORGE is a big part of this ecosystem.

“Fairly early on, in April or May, I can’t remember how, but I found out about Greenfield Learn,” he explained. “And they were extremely helpful in connecting me very quickly to a range of product-prototyping and manufacturing partners that I had no idea existed here in Massachusetts.”

Those thoughts sum up why FORGE was created — to give entrepreneurs an idea of the shops that exist and their capabilities, but also some education in why firms in the Bay State are often their best option, said Carlson, who, like Scanlon, sits on the board of advisors for the nonprofit agency.

She told BusinessWest that, oftentimes, entrepreneurs are looking for “cheap and fast” to get a prototype out the door.

“One of the goals at FORGE, and also within the firms in Western Mass., is to educate these entrepreneurs that, in Massachusetts, you get what you pay for,” Carlson went on. “You’re not going to get something you didn’t order.”

Jack Adam, vice president and co-owner of MTG, agreed. He said his firm, which provides a wide range of services, including high-volume laser cutting, welding, machining, precision forming, and more, works with clients — and RISE Robotics is one of them — to look at products and “make them more manufacturable,” as he put it.

“We support the OEMs and new-company startups to some degree, to come up with a product that’s manufacturable — we try to tell them that, ‘if you do it this way, instead of that way, you can eliminate a lot of welding, save some money, be more cost-effective, and be more competitive out there,’” he said, adding that this is the kind of support it provided to RISE Robotics as it helped the company produce close to 20 prototypes of its products.

And while helping startups by providing such services, these manufacturers are also helping themselves become more nimble and more competitive, said Scanlon, adding that it also helps them think more globally.

“It gets them thinking that there’s more out there than defense work, there’s more out there than United Technologies work,” he noted. “Meanwhile, these projects will be a little more challenging, they’ll be a little more cost-sensitive. It’s kind of like working out; it gets you more fit — it gets your business more fit.”

Parts of the Whole

As he talked with BusinessWest about RISE Robotics and the team behind it, Adam said, “they’re trying; they’re young folks, and they’re pretty talented. They’re going to hit some home runs someday, and they’re getting pretty close.”

With that, he described most of the startups at Greentown Labs and those who have graduated as well. Many are getting close, and a good number are potential home-run hitters.

To clear the bases, though, most need help taking a product from the concept stage to the prototype stage to the production line. And the aptly named FORGE is helping companies find that help.

As Scanlon noted, it’s become a different kind of sales force, and a very effective one.

George O’Brien can be reached at [email protected]

Manufacturing

Tight Squeeze

President Trump has made no secret of his hope that a series of tariffs on goods from China and other countries will eventually force a more favorable balance of trade for the U.S. But in the meantime, the escalating trade war has posed very real, often negative impacts for manufacturers, particularly in the form of higher costs and a general sense of uncertainty that makes it difficult to pursue growth. And no one seems to have any idea when the situation will ease up.

A trade war can hurt business in more ways than one, Kristin Carlson says.

For example, as a contractor for the U.S. Department of Defense, her manufacturing company, Westfield-based Peerless Precision, doesn’t buy a lot of foreign materials, like steel and aluminum — in fact, she buys about 95% domestic — so she hasn’t been subject to the direct cost increases on imported goods resulting from the volley of back-and-forth tariffs posed by President Trump and Chinese President Xi Jinping.

“As a result of tariffs and increased pressure on domestic supply, we’ve had supply and demand issues. We’ve been seeing pricing going up 25% to 40% from what we have historically paid.”

But those increased costs of Chinese products have pressured the domestic supply chain, so she is, indeed, paying more.

“As a result of tariffs and increased pressure on domestic supply, we’ve had supply and demand issues. We’ve been seeing pricing going up 25% to 40% from what we have historically paid,” she said. “Costs are a big issue.”

Peerless Precision, which makes parts for the aerospace and defense industries, employs 32 people and has generated strong revenue in recent years, but profits are being squeezed by the trade war.

Kristin Carlson says manufacturers are dealing with price increases and supply-chain disruptions due to the recent tariffs.

Lead times are also affected, she added. “Because of this supply and demand issue on the domestic supply chain, companies are stocking up to make sure they’re getting the prices they need. When times are normal, we’ll get material in one to three business days, and that’s turned into one to four weeks.”

Trump’s trade war, now about 18 months old, has had a ripple effect on the global supply chain of many products, driving up the price of imported raw materials and finished goods. It’s not just manufacturers feeling the heat — for example, farmers have lost lucrative markets as well.

NPR recently reported that cranberry growers worked for years to develop a market in China, and sales of dried cranberries to China increased by more than 1,000% between 2013 and 2018. But after the White House approved tariffs on $50 billion worth of Chinese goods in July, China immediately retaliated with tariffs on dozens of U.S. goods, including dried cranberries, and now growers — many of them in Massachusetts — are faced with a serious glut of product.

That’s just one example of the impact of tariffs, but for manufacturers, the equation can have even more moving parts (pun intended). Many shop owners say the uncertainty of the situation is causing them to hold off on hiring and expansion because they’re not sure how or when a deal will take shape.

“The imposition of 15% tariffs on $112 billion worth of Chinese goods on Sept. 1 underscores the uncertainty facing employers, particularly manufacturers, who do business in overseas markets,” Raymond Torto, chair of the Associated Industries of Massachusetts (AIM) Board of Economic Advisors, wrote last month. “At the same time, employers are beginning to see evidence from both customers and suppliers of a slowdown in the U.S. economy.”

Stirring the Pot

Robert Lawrence, professor of International Trade and Investment at the Harvard Kennedy School and a former member of President Clinton’s Council of Economic Advisers, recently told the Boston Globe that, while U.S. strategy over the past century has been to use protectionist measures like tariffs sparingly, Trump has a more aggressive outlook.

“This is at odds with the entire thrust of our policies over the post-war period,” he said. “We’re acting unilaterally. We’re bullying the Chinese by putting these tariffs on them.”

The Trump administration has taken aim at China for a variety of economic reasons, from the nations’ trade imbalance to accusations that Chinese companies steal intellectual property from American companies. But, as Carlson noted, China isn’t the only affected supplier.

“When we submit a quote for a customer purchase, we’re locked into the price we quote them. If our cost changes, we have to suck it up. We can’t go back to the customer and say, ‘oops, materials went up 50%, so we have to raise the price.’ We don’t do that.”

“Tariffs weren’t just slapped onto China, but onto Canada, Mexico … maybe three to five countries in the entire world don’t have tariffs on them.”

Not all manufacturers see the impact the same way. Eric Hagopian, who owns Pilot Precision Products in South Deerfield, told the Globe that, while the price of domestic steel he buys has gone up 43% this year, the tariffs are boosting American industry as many companies are moving to American products as a result of tariffs on products from Pilot Precision’s Chinese competitors. “It actually helps our business,” he said.

Rick Sullivan, president and CEO of the Economic Development Council of Western Mass., said he has heard from members with differing perspectives on the impact of the trade war.

“Some people, I think, are really impacted; they feel there are some pretty serious impacts on cost and competitiveness,” he told BusinessWest. “Then, if you go to someone like Eric Hagopian, he’s a little less adamant that it’s a big issue.”

MassBenchmarks, an initiative of the UMass Donahue Institute and the Federal Reserve Bank of Boston, reported on economic trends in Massachusetts this week, pointing out that the economy is doing well overall, with low unemployment, but employment and output growth are decelerating.

“Growth in the global economy is slowing, and labor-supply constraints, softening demand, and rising international geopolitical uncertainty all signal concerns for the economy going forward,” the report notes.

Rick Sullivan says manufacturers — and other businesses — have differing takes on the pros and cons of a trade war, but no one likes the uncertainty it generates.

Board members focused on a number of broad sources of uncertainty in the economic and geopolitical environment and what they could mean for the Massachusetts economy. One board member said the current environment is characterized by “considerable internal and external disharmony,” which includes ongoing trade conflicts, as well as continued tension around Brexit, the apparent impacts of climate change, particularly as it relates to agricultural production in various places around the world, and increasing instability in global markets among advanced economies. Against that backdrop, Trump’s ongoing impeachment inquiry is yet another wild card.

But there’s a reason MassBenchmarks placed trade conflicts at the top of that list.

“I think they create an uncertainty, and they increase costs,” Sullivan said. “Certainly, costs are a concern, and competitiveness is a concern.”

Cost and Effect

Those costs aren’t easily passed on to customers, Carlson said, and manufacturers, by and large, would rather not do that.

“When we submit a quote for a customer purchase, we’re locked into the price we quote them,” she explained. “If our cost changes, we have to suck it up. We can’t go back to the customer and say, ‘oops, materials went up 50%, so we have to raise the price.’ We don’t do that.”

AIM releases its Business Confidence Index every month, gauging exactly that — how member businesses are feeling about the economic outlook of the state and their own businesses. The overall Index, which is scored on a 100-point scale, has lost 3.7 points since a year ago but remains within optimistic territory.

“For a long time, a lot of us have been eating the material cost increases. Everything I hear is there’s not really an end date. We’ll see what happens.”

However, September’s reading was weighed down by weakening sentiment among Bay State manufacturers. The Index’s manufacturing component dropped 2.4 points in September and has lost 7.9 points for the year. Non-manufacturers were more confident than manufacturers by a 6.5-point margin.

The results mirrored the national Institute for Supply Management’s manufacturing index, which fell to its lowest level since 2009 last month. A separate report by IHS Markit showed that the manufacturing sector suffered its worst quarter since 2009, though activity increased during September.

“Manufacturers are bearing the brunt of both actual and threatened tariffs against goods imported from China,” Torto wrote. “Many Massachusetts companies have also become caught in retaliatory tariffs and are seeing significant weakening of their overseas business.”

Michael Tyler, chief investment officer at Eastern Bank Wealth Management and a BEA member, noted that the gaps in confidence between manufacturing companies and other businesses appear to be growing.

“Manufacturing has been hit by the steady increase in tariffs imposed by the United States, China, and other nations since 2018,” he noted. “The World Trade Organization estimates that the flow of goods across borders will increase by just 1.2% this year, and manufacturing companies are feeling that downdraft.”

Carlson is feeling it, for sure, and as president of the Western Mass. chapter of the National Tooling and Machining Assoc., she knows others are, too.

“For a long time, a lot of us have been eating the material cost increases,” she told BusinessWest, conceding that the uncertainty around the trade war has been equally vexing. “Everything I hear is there’s not really an end date. We’ll see what happens.”

Joseph Bednar can be reached at [email protected]

Manufacturing

Scaling Up

CEO Bill Bither

CEO Bill Bither

Over the past five years, Machine Metrics, a company that specializes in predictive analytics for manufacturers, has been scaling up its operation. But with an infusion of $11.3 million in venture capital last fall, this process enters a new and dynamic phase. The company has nearly doubled its workforce, expanded with a new office in Boston, and become much more aggressive in efforts to educate potential clients about its game-changing software.

Bill Bither was asked where he wanted to take Machine Metrics, the five-year-old startup he co-founded that specializes in predictive analytics for manufacturers.

He paused for a second or two, and then, in a voice that brimmed with confidence and conveyed the sentiment that he’d been asked this question — and given this answer — before, said simply and almost matter-of-factly, “we’re really looking to build a billion-dollar company.”

That’s not a phrase you hear often from entrepreneurs based in the 413, but Bither, who launched this venture with Eric Fogg and Jacob Lazier and serves as its CEO, believes that stated goal is certainly attainable. And those who have watched this company grow quickly and profoundly since it first gained attention as a member of one of Valley Venture Mentors’ first accelerator classes would certainly agree.

The company develops software systems that measure manufacturing productivity. To be more specific, these systems analyze performance in real time and send out alerts to clients when production falls behind.

Clients generally see a 20% improvement in efficiency, and the phrase most often used in relation to the software and its overall impact within a given shop is ‘game changer.’

There are now more than 100 manufacturers around the world using the company’s products, and Bither expects that number to climb steadily as awareness of the software, its capabilities, and the results it has generated for customers grows.

Bill Bither, left, seen here with co-founder and CTO Jacob Lazier

Bill Bither, left, seen here with co-founder and CTO Jacob Lazier, says Machine Metrics is adding clients across the country and overseas.

“What we’ve discovered since 2015 is that the market that we’re in is really large, and that industrial technologies are moving very quickly,” he told BusinessWest. “There’s a really high demand for companies to digitize their factories, and the key missing component to doing that is getting data from the factory floor; that’s the first step in digitizing a factory, and that’s what we do very well.”

To continue to do this well on a much larger scale, the company needed to move quickly on a number of fronts — from expanding its customer base beyond this region and this country to greatly expanding its team of engineers, salespeople, and marketers, to being far more aggressive when it comes to getting the word out.

And it has moved forward on all those fronts thanks in large part to an an infusion of $11.3 million in capital late last year.

The company has put that money to work to expand its data-science and product-development teams while accelerating global sales, said Bither, adding that, while the company has been scaling up on an ongoing basis over the past five years, that process has essentially entered a new, more dynamic phase.

“Last year, we grew about 200%, and this year we’ll probably be around that same number,” he explained, adding that this is now a truly global company that continues to expand geographically and in all other ways.

Now headquartered on Pleasant Street in Northampton — a move necessitated by the growth of its workforce — Machine Metrics has also opened an office in Cambridge, and now employs roughly 50 people, a number that has almost doubled since the company announced that infusion of capital.

“What we’re doing now is going even faster, looking at international expansion; having more engineers on the team helps us fulfill our vision quicker. We’ve shown that we’re leading the space that we’re in, and we need to keep leading the industry toward digitizing their factories.”

“We’ve doubled the size of our executive team, we’ve almost doubled the size of the workforce, and our customer count is now over 100,” said Bither. “What we’re doing now is going even faster, looking at international expansion; having more engineers on the team helps us fulfill our vision quicker. We’ve shown that we’re leading the space that we’re in, and we need to keep leading the industry toward digitizing their factories.”

For this issue, BusinessWest talked at length with Bither about the process of scaling up one of the most-watched startups in this region — and about the roadmap to becoming a billion-dollar company.

The Light Is Green

When he talked with BusinessWest earlier this month, Bither was in Toronto on vacation visiting family. Well, sort of.

“I have back-to-back meetings with clients today, which is what usually happens,” he explained. “A vacation trip turns into a work trip.”

There have been a number of work trips and vacations doubling as work trips for Bither and his partners over the past years, as they continue to bring awareness to a product that represents pioneering on a number of levels.

Indeed, while there have been production-monitoring software products on the market for some time, the software systems the company is now offering represent a huge step forward in what’s known as industrial IoT (Internet of Things) technology.

For clients, it has meant adding the phrase ‘being in the green’ to their lexicon. That’s the color that shows up on the dashboards, or large display boards, when machines are operating at or above the desired performance levels. An orange color means they are operating slightly below that level, and red means there’s trouble.

But beyond letting companies know how machines — or shifts of employees — are performing, the software can also predict when errors will occur and machines will fail, thus enabling manufacturers to avoid costly breakdowns that greatly impact overall productivity.

And as productivity improves, companies are better able to navigate what has long been the manufacturing sector’s most pressing — and perplexing — problem: a deep talent shortage that shows no signs of letting up any time soon.

All this explains why that phrase ‘game changer’ is being used so often by those who now have these systems operating in their plants. And it’s being heard both in this region — VSS CNC Inc. in Greenfield, Marox Corp. in Holyoke, and others are on the client list — and well outside it.

“We’re spread out across North America — I think we’re in roughly 40 states now,” he said. “And we’re starting to see some growth in Europe and South America. There’s still so much opportunity in this country, though, and that’s where we’re focusing most of our efforts.”

Bither, when pushed to guesstimate just how big the market is for industrial IoT technology, put the number at $85 billion, and said the mission moving forward, obviously, is to garner as large a share of that market as possible.

To do that, the company knew it had to expand its workforce, adding people in a number in a number of areas, but especially engineers in the field working with customers to digitize their factory floors.

As he talked with BusinessWest, Bither admitted he’d actually lost track of just how big the workforce was at that moment, a clear indication of how fast things are changing and how many people have joined the team.

“We’ve hired software developers, and we’ve added to our marketing team, our sales team, and our customer-success team,” he said, adding that the company has also brought on a chief financial officer, a vice president of Product, a vice president of Business Development, and a vice president of Sales, taking Machine Metrics and its leadership team to a much higher plane.

Meanwhile, the company has also opened an office in Boston, a step taken to not only better serve customers in that area, but also take advantage of the extremely deep pool of IT talent inside the 128 corridor.

“At the rate that we’re growing, it’s difficult to hire enough really skilled people in Western Mass. quickly enough,” he explained. “We’re combining the best manufacturing talent with the best software talent, and Boston really has a heavy concentration of software executives.”

Bither, who has been through the scaling-up process before — he grew the software company Atalasoft to 25 people before he sold it — said this experience at Machine Metrics is different in many ways, primarily because the company is a venture capital (VC)-backed enterprise.

“Therefore, the focus is on growing fast, not about being profitable — that’s the life of a VC-backed technology company,” he explained. “You’re really measured in growth and cash, more so than profits, and that’s different from what I’m used to.”

Moving forward, he said one key to continued growth and effective scaling of this venture is effective website content marketing, an approach designed to help educate and hopefully inspire movement within a sector, manufacturing, that has traditionally been slow to embrace new technologies and different ways of doing things.

Profound growth of its workforce forced Machine Metrics to seek larger quarters

Profound growth of its workforce forced Machine Metrics to seek larger quarters, and it found them in the old Post Office building on Pleasant Street in Northampton.

“We’ve been able to build quite a presence in this space without spending too much money because we’ve been able to build out content on our website and write a number of articles and blogs,” he explained. “And because of that, we’ve been able to bring in a lot of interested buyers that come through our website; our sales team will then talk to them, and a certain percentage of them will actually close.”

Another important marketing vehicle has been industry trade shows, such as the EASTEC show slated for next month at the Big E, but also the recent event in Hanover, Germany (the company’s first international show), where Machine Metrics had a large presence and was able to introduce itself and its software to new audiences.

“It was interesting because we were able to see what the landscape looks like in Europe,” he explained, adding that the company partnered with Amazon Web Services, a subsidiary of Amazon that provides on-demand cloud-computing platforms to individuals, companies, and governments, and thus gained considerable attention at the show.

The company also takes part in the International Manufacturing Technology Show, staged every other year in Chicago, and will be in Las Vegas in a few weeks for another large industry event, said Bither, adding that this exposure is critical to those scaling-up efforts.

Getting Things in Gear

Bither did not want to disclose current revenue figures for Machine Metrics, but he hinted strongly, not that he had to, that this venture is a long way from being a billion-dollar company.

But it seems to be on a path that would make that number more than a fantasy or pipe dream. This is a fast track greased by obvious need among manufacturers large and small to be able to track their performance in real-time analytics, and not rely on guesswork.

Whether the company can get to that magical milestone — or when, obviously — remains to be seen, but the scaling-up process continues, and like those clients it serves, this intriguing startup is certainly operating in the green — figuratively, if not literally.

George O’Brien can be reached at [email protected]