'Lean' manufacturing leading industry back from the depths
FARMINGDALE, N.Y. — The economy is firming, hiring is on an upswing and consumers appear inclined to spend.
That's good news for D'Addario & Co., a firm that manufactures the strings found on all sorts of musical instruments, from cellos to electric guitars.
Like many manufacturers, it's trying to make up for ground lost during the Great Recession. It's doing so in part by investing in technology that makes it lean, boosting output with fewer workers and smarter production.
“We're not all the way back yet. We're probably about 85 percent back” to pre-recession levels, said Rick Drumm, co-president of D'Addario in Farmingdale, a suburb of New York City.
“The entire music products industry, $7.5 billion in the United States . really has not had any growth in 10 years plus, when adjusted for inflation,” he said.
Indeed, even with recovery, the overall manufacturing sector is at best about three-quarters of the way back, less so when tech products such as semiconductors are taken out of the mix. At a contemporary peak, manufacturing represented about 21 percent of the economy in 1980. Today, it's closer to 12 percent, and the sector employs about 12 million workers.
“The general economy fell only 4 percentage points in the recession, but manufacturing fell (almost) 20 percent,” said Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation, an industry research group. “Obviously, it's going to grow faster because it went into a deeper hole, but it's got more to make up.”
The long slog back is reflected in hiring numbers.
The sector lost more than 2 million jobs, or 15 percent of the manufacturing workforce, from December 2007 to June 2009 — a period spanning the Great Recession. The job losses continued beyond the official end of the recession, and at the end of 2009, the sector had its lowest employment level since 1941.
The sector has gained a little more than half a million jobs since February 2010. That would be good in normal times. These aren't normal times.
A key reason is that manufacturers are rebounding in part thanks to greater productivity, getting more output from fewer workers.
“We've added 543,000 workers since the end of recession. My gut reaction is many of those people are different than the people they might have replaced,” said Chad Moutray, chief economist for the National Association of Manufacturers. “Because they are so much more skilled and manufacturing is much more advanced than it used to be, it further serves to increase those productivity gains.”
It helps to explain why recovery in hiring for manufacturers has been in fits and starts and remains well below pre-recession levels.
“It's not like everything is great in manufacturing. It's recovering. Demand is picking up. We're trying to get to recovery of the previous cyclical peak and get on a growth path,” said Meckstroth. “First, you've got to recover from what you lost.”
And that's where D'Addario comes back into the picture. It's an example of a company that's managed to grow despite a shrinking marketplace. It's won business from competitors, partly by freeing up more than 70,000 square feet of space for manufacturing and warehousing, and investing in technology and automation that oddly enough allowed it to bring back jobs from abroad.
The investment and expansion began in 2007 and picked up pace during the downturn. It allowed the company to price more competitively and hold its ground. Real growth has been a few percentage points a year, but that's huge, given the broader contraction in sales of musical instruments.
“It just goes to show you that it is possible to compete,” said John D'Addario III, co-president and fourth-generation family member to head the company, which makes 700,000 strings a day on three shifts.
On a tour of the plant in a New York office park, D'Addario showed off machines, housed in a 110,000-square-foot facility, that were designed by the company's own engineers to further what the company calls “lean” manufacturing. The concept builds on advances in robotics, software and other evolutionary technology.
The company is acquiring 30,000 more square feet of space and has moved one of its high carbon steel mills to Long Island to be closer to final production and reduce the need for costly inventory.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Shift in what powers the grid raises concerns about fuel diversity
- Severance tax on natural gas drilling backed by Pa. voters
- Protesters refuse to pay back education loans
- ‘Shark Tank’ companies have change of heart
- Economist Hubbard says GOP should grow number of workers
- Rue21 adjusts for tough market
- Women encouraged to become engineers
- Unruly photo collection? Get it under control with organizing program
- Mylan closes $5.3B tax-lowering deal with Abbott Labs
- Easier home loan rules worry some
- Tech sector’s stocks strong