For small factories in NE Ohio, ‘life is good,’ leaders say
Many small manufacturers in Northeast Ohio appear to be riding high.
Demand for services and products is steady to strong, say the leaders of five local companies.
But there are concerns. Among them, a tight job market. Businesses are being forced to change by rapidly evolving technology and other factors. Security is top of mind as processes become increasingly computerized and reliant on the internet.
“In a typical job shop, life is good right now,” said Courtney Wagner, president of Wagner Machine Inc. in Norton, a custom machine shop and fabricator. “If you can’t make it in our environment and the economy right at this moment, you might not be doing something right.”
Wagner was among the participants in a roundtable discussion Tuesday morning at the Akron office, off White Pond Drive, of Chicago-based accounting and professional services firm Sikich LLP.
The roundtable was tied into Sikich’s newly released 2018 manufacturing report that touched on how companies are addressing such things as cybersecurity, hiring and workplace challenges and more.
Joining Wagner were the heads of Ohio Travel Bag in Solon, Sattler Machine Products in Sharon Center, Kent Corp. in North Royalton, Additive Engineering Solutions in Akron and Sikich experts.
David Sattler, president of Sattler Machine, a custom machine shop, said most people in his industry are seeing a good uptick in business other than what he called “typical” pre-election softening.
“In general, (I have) a very optimistic outlook,” Sattler said.
“E-commerce is exploding,” said Gregg Hague, a partner at Sikich who specializes in supply chain management.
Andrew Bader of Additive Engineering Solutions, which does large-scale 3-D printing of tools and molds, said his business is doing well but often has to prove itself to potential customers.
“Our technology is still new, so people are still trying to see where it fits in,” Bader said.
David Tsai, president of Kent Corp., an original-equipment manufacturer for the steel and pipe industry, automotive industry and others, said his company is busy.
“We make the equipment to make the material for customers,” he said. “If the automotive industry is good, inevitably we’re doing well.”
“The economy is treating us well,” said Michael Fox, owner of Ohio Travel Bags, which supplies the garment, handbag and shoe manufacturing repair industry.
“E-commerce is really booming,” Fox said. “What’s most interesting is that we found that we need to use e-commerce” to find business-to-business customers.
While Sattler said technology is driving a lot of change in the machine shop industry, Wagner added that another driver of change is workplace diversity.
“The diversity in your workforce is changing all of the time, which creates change in what we do,” Wagner said.
The business owners said upgraded machinery relies on the internet, software and sensors, which helps not only with making better products but also providing data for them to analyze to improve processes and to acquire jobs.
Still, that reliance on machines with internet connections — part of what is called the internet of things — also makes businesses vulnerable to cybersecurity threats, said Brad Lutgen, a Sikich partner who specializes in technology security and compliance.
“It’s a new threat factor for a lot of organizations,” he said. Hackers have shown they can disrupt manufacturing floors and slow down production and reduce productivity, not just steal data, he said. There have been documented instances where nation-state actors drove down productivity at a business, leading to the company being bought out at a bargain price by a nationstate business, Lutgen said.
“It’s not just the typical hacks that people tend to think of,” he said.
When it comes to hiring, companies have found in part they need to be more creative and to look more for people who have adaptable skill sets and who fit into their culture.
Companies are doing in-house training to help employee update skills, they said.