The Importance of Frugal Engineering

strategy+business (Sehgal, Dehoff, and Panneer) - Providing new goods and services to “bottom of the pyramid” customers requires a radical rethinking of product development.

To get a handle on what frugal engineering is, it helps to understand what it is not. Frugal engineering is not simply low-cost engineering. It is not a scheme to boost profit margins by squeezing the marrow out of suppliers’ bones. It is not simply the latest take on the decades-long focus on cost cutting.

Instead, frugal engineering is an overarching philosophy that enables a true “clean sheet” approach to product development. Cost discipline is an intrinsic part of the process, but rather than simply cutting existing costs, frugal engineering seeks to avoid needless costs in the first place. It recognizes that merely removing features from existing products to sell them cheaper in emerging markets is a losing game. That’s because emerging-market customers have unique needs that usually aren’t addressed by mature-market products, and because the cost base of developed world products, even when stripped down, remains too high to allow competitive prices and reasonable profits in the developing world.

Frugal engineering recalls an approach common in the early days of U.S. assembly-line manufacturing: Henry Ford’s Model T is a prime example. But as industries grew and matured over the decades, and as consumers prospered to levels few would have predicted a century ago, product development processes became hardwired and standard operating procedures worked against frugality...

The Case Against Corporate Social Responsibility

Wall Street Journal (Karnani) - The idea that companies have a duty to address social ills is not just flawed, argues Aneel Karnani. It also makes it more likely that we'll ignore the real solutions to these problems.\\

Large companies now routinely claim that they aren't in business just for the profits, that they're also intent on serving some larger social purpose. They trumpet their efforts to produce healthier foods or more fuel-efficient vehicles, conserve energy and other resources in their operations, or otherwise make the world a better place. Influential institutions like the Academy of Management and the United Nations, among many others, encourage companies to pursue such strategies.

It's not surprising that this idea has won over so many people—it's a very appealing proposition. You can have your cake and eat it too! But it's an illusion, and a potentially dangerous one...

Manufacturing: The New Economy

Manufacturing Automation (Moad) - Manufacturing is suddenly a hot topic in Washington. As anemic new-job creation continues to retard the economic recovery, politicians, policy experts, and national journalists have suddenly recognized that manufacturing has been a relative bright spot, one of the few sectors showing growth and the potential to increase exports and generate new, high-paying jobs.

...That recognition is not universal, however. Perhaps predictably, as the national spotlight has begun to turn to manufacturing, naysayers have begun popping out of the woodwork to argue that manufacturing isn’t worth saving. In some cases, their positions reveal a profound misunderstanding of what manufacturing is all about.

Take Kevin Hassett, for example. Director of economic policy at the American Enterprise Institute and a Bloomberg News columnist, Hassett this week wrote a column in which he called the increased attention being given to manufacturing issues an “unhealthy fixation.” The decline in manufacturing from 28% of the gross domestic product in 1950 to 11% today is not a crisis, he said, nor is it “necessarily a cause for concern.” This trend, he insists, is simply “economic evolution, a natural and positive force.”

But here’s where Hassett goes way off the rails. He says the “new economy”—unlike the old, manufacturing-centric economy — is “ideas economy.” “Over the past few decades, our economy has transformed dramatically, and the importance of innovation has increased sharply,” Hassett asserts. The implication, of course, is that manufacturing is not driven by new ideas and innovation.

This, of course, is completely false. In 2007, U.S. manufacturing companies made $157 billion worth of investments in research and development, representing 58% of all private R&D investments. Those investments have enabled an unprecedented level of productivity improvement in the manufacturing sector, one of the many factors that has depressed manufacturing employment.

...Before writing off manufacturing as a lost cause, Hassett and people like him need to spend some time outside of the Beltway, meeting with some of the manufacturers on the PM100 list. They’ll learn that manufacturing is all about innovation.

Scope 3 Standard to be Finalized in December

PracticalSustainability (Baier) - The emerging global standard for companies to measure and track Scope 3 greenhouse gases (GHG) is on schedule for finalization in December. Scope 3 emissions often represent the largest area of a company's GHG impacts by far -- up to 75 percent in many cases -- yet a widely supported industry measurement methodology does not exist.

Initial reactions to the current draft standard vary. Some companies testing the new standard are bullish and plan to implement it, while others are more cautious and taking a wait-and-see approach. Sustainability leaders should continue to track the progress of this standard for this important emissions area to determine if it makes business sense to calculate their own Scope 3 emissions.

Goodbye Big Three, Hello Supply Chain

IndustryWeek (Blanchard) - Chances are pretty good that any study that suggests Detroit is a hotspot for new jobs and economic activity will have been prepared by the city itself. And such is the case with a recent report, written by the Detroit Regional Chamber of Commerce and Michigan State University, which projects that Detroit could gain as many as 66,000 new jobs over the next decade, while adding $10 billion to the local economy, by transforming itself into a supply chain hub.

The study compares metro Detroit with other established supply chain hubs. Some hubs, such as Memphis and Louisville, earned their status largely due to the presence of major logistics providers (FedEx and UPS, respectively). Others, such as Chicago and Kansas City, are traditionally known as intermodal areas, thanks in large part to their proximity to rail and interstate highway networks. Becoming a supply chain hub, whether it's Detroit or any other city, requires three basic activities, according to the study:

• building differentiated hubs, which can attract industry activity to stimulate economic growth and job creation;
• attracting industries to the supply chain hub to build economies of scale; and
• facilitating hub development through private/public-sector partnerships.

DOE Issues Loan Solicitation for Renewable Energy Manufacturing

Department of Energy - DOE announced on August 12 a new loan guarantee solicitation for renewable energy manufacturing projects including components for solar and wind energy. The solicitation covers manufacturing of commercial technology systems as well as wind turbine blades and solar photovoltaic components. It uses American Recovery and Reinvestment Act funds through Section 1705 of the DOE's Loan Guarantee Program, and will include up to $750 million to pay the credit subsidy costs of loan guarantees. The solicitation will support the deployment of renewable energy technologies that reduce greenhouse gas emissions and will help increase employment in the nation's green manufacturing sector.

To assist those applying, DOE recently implemented a number of improvements to its Loan Guarantee Program. For example, applicants can use the newly launched, user-friendly online application portal. As with earlier solicitations, the manufacturing solicitation will consist of a two-step process with rolling deadlines. The first Part I deadline is September 30, 2010, and the first Part II deadline is November 30, 2010. Final Part I applications are due November 30, 2010, and final Part II applications are due January 31, 2011. See the DOE press release and the Loan Guarantee Program Web site.

Rebalancing Quality Priorities

IndustryWeek (Ebert, Natarajan, Newsom, and Qu, from A.T. Kearney) -  Many companies are susceptible to costly quality issues, as the recent Toyota crisis demonstrated. To reenergize their quality focus, companies should manage quality as a customer experience, address quality issues with sophisticated risk management approaches, and transform the quality function to become a source of strategic value.

Quality Equals Risk Management
How susceptible is your organization to a quality crisis? Companies are discovering quality is most powerful when it is engaged to prevent defects, not detect and eliminate those that slip through.

Transforming Quality Culture
By employing a strategic mindset for quality, companies can improve performance and better address the challenges ahead.

The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention

ThomasNet News - In The Most Powerful Idea in the World, author William Rosen traces the development of the steam engine through a close examination of the creative processes of pioneering inventors, examining the trials and tribulations they faced and the importance of intellectual property protection.

Erudite and persuasive, Rosen's narrative shows how the fuse for the invention explosion of the 18th century was ignited in the 17th: by the scientist and diplomat Francis Bacon, who first defended a national responsibility for investment in research; by the jurist Edward Coke, who wrote the world's first patent law; and by the philosopher John Locke, who championed the right to own one's ideas.

The Most Powerful Idea in the World is not simply a description of how coal burns, gears engage and steam condenses; not merely a primer on metallurgy, textile manufacturing, mechanical engineering, legal theory and economic history. It is a dazzling and thought-provoking narrative of the moment when a generation of English artisans became the most inventive population in human history.

Report Shows Advanced Manufacturing Thriving in Michigan

IndustryWeek (Alpern) - A new report suggests Michigan’s advanced manufacturing jobs are not just surviving the recession, but actually thriving and account for two-thirds of the state’s industrial workforce. Manufacturers that use advanced processes and produce advanced products generally pay higher wages and employ higher rates of productivity than other subsectors of manufacturing, according to the report prepared by the Anderson Economic Group for the University Research Corridor.

Citing data from 2007, which was the most recent available, job losses in advanced manufacturing throughout Michigan was not nearly as widespread as those seen in other areas of manufacturing over the last 10 years.

Though many companies in advanced manufacturing were hit during the recession, there were several notable areas of growth. According to the report, employment for medical equipment and supply manufacturing grew 10.8% to 8,434 people, and jobs in navigational, measuring, medical and control equipment grew 18% to 11,257 as of 2007. Overall, Michigan had 381,000 advanced manufacturing jobs at 11,000 businesses, accounting for 10.3% of state workers and 16.2% of payroll, according to the 2007 data.

Is It Time to Re-Think Your Green Team?

Green Biz (Quevedo and Latimerz) - Can green teams help companies innovate beyond internal operations and actually influence product and service innovation? If so, what will it take to realign and redesign these teams so that their energy and social capital can be optimized? Our study, "Generating Sustainable Value: Moving Beyond Green Teams to Transformation Collaboratives" (pdf), produced several compelling insights.

In order to innovate beyond internal operations and cost savings, and even to successfully implement internal initiatives, green teams need specific alignment with existing company goals, and require explicit design for success -- that is, a design for specific outcomes, a design criterion that project and product teams in businesses must always have. This design must integrate with established business processes.

This may appear an obvious set of success criteria, yet traditionally -- and currently – most green teams are loosely managed and tend to be "grass roots" in nature. In previous research studies and various articles on green teams, the general premise has been that, while these teams benefit from corporate support and guidance, a hands-off approach is what encourages creativity, innovation and engagement.

According to the results of our study, the reality is actually the opposite...

Department of Energy Paves Way for Additional Clean Energy Projects and Jobs through Manufacturing Solicitation

EERE News - Energy Secretary Steven Chu announced today a new loan guarantee solicitation for renewable energy manufacturing projects. The Commercial Technology Manufacturing Systems and Components solicitation is supported by the American Recovery and Reinvestment Act through Section 1705 of the Loan Guarantee Program. The solicitation will support the deployment of renewable energy technologies that reduce greenhouse gas emissions and help increase employment in the nation's green manufacturing sector, which is part of the Administration's long-term plan to create new green energy jobs.

The solicitation will seek applications for projects that manufacture commercial technology renewable energy systems, such as an energy storage systems, and components, such as wind turbine systems, blades or solar photovoltaic components.

As with earlier solicitations, the manufacturing solicitation will consist of a two-step process with rolling deadlines. The first Part I deadline is August 31, 2010, and the first Part II deadline is October 31, 2010. Final part I applications are due November 30, 2010 and final part II applications are due January 31, 2011. Applicants are strongly encouraged to get their applications in early since projects must meet all statutory and regulatory requirements and commence construction no later than September 30, 2011. The Department will make available up to $750 million to pay the credit subsidy costs of loan guarantees issued through this solicitation...For more information on this program, please visit the Loan Guarantee Program Web site.

GAO Report Advises Federal Role to Manage e-Waste Exports

Environmental Leader - A growing number of states have enacted electronics recycling laws to address the lack of a national approach, raising concerns about a patchwork of state requirements, according to a new federal study from the Government Accountability Office (GAO). Currently, 23 states have enacted some form of electronics recycling legislation.

The study reveals that one of the biggest issues that still need to be addressed is the export of electronic waste (e-waste). GAO says a greater federal regulatory role over exports could address the authority limitations of the U.S Environmental Protection Agency and states to regulate exports, and should be part of any approach, whether it’s state-by-state or at a national level, for managing used electronics.

The GAO report, “Electronic Waste: Considerations for Promoting Environmentally Sound Reuse and Recycling,” finds that the EPA’s efforts to manage used electronics focuses on enforcing its rule for the recycling and exporting of cathode-ray tubes (CRT), which contain significant quantities of lead, and several partnership programs that encourage voluntary efforts among manufacturers and other stakeholders.

The study also finds that the EPA’s partnership programs are limited.

Global Sustainable Packaging Market to Reach Nearly $143B by 2015

Environmental Leader - The global market for sustainable packaging is projected to reach $142.42 billion by 2015, according to a report from Global Industry Analysts (GIA). Growth drivers include increased awareness about environmental hazards related to disposal and recycling of packaging wastes, government initiatives to minimize greenhouse gas (GHG) emissions, and stringent regulations.

Unlike other segments of the packaging industry, sustainable packaging showed impressive growth from 2008 to 2009, and has been immune to the economic downturn, according to the report. GIA says sustainability has helped companies cut costs and reduce packaging waste by using recycled and reusable materials.

Manufacturing Policy Gets Boost in House Vote

Manufacture This (Stack) - The House of Representatives passed a bill (HR-4692) that would require each U.S. President to set a national manufacturing strategy and to annually assess progress on meeting its goals. The bill passed by a vote of 379 to 38, reflecting the bi-partisan belief that action must be taken to shore up manufacturing in the United States. It is part of a new ‘Make It in America’ agenda designed to reinvigorate American manufacturing, create jobs, and aid the economy.

Here is how business and economics writer Richard McCormack described the bill in Manufacturing & Technology News...

Obama Signs Manufacturing Enhancement Act

USA Today Kiely) - President Obama just reiterated his call for a revival of American manufacturing, as he signed into law the Manufacturing Enhancement Act, a bill that adjusts import fees to benefit U.S. companies. The measure, which Obama says will "help American companies compete" in a global economy, passed the U.S. House last month with overwhelming bipartisan support. The Senate approved it unanimously, without a roll call.

DOE Reestablishes Secretary of Energy Advisory Board

Environmental Leader - The U.S. Department of Energy (DOE) has reestablished the Secretary of Energy Advisory Board (SEAB) under the Federal Advisory Committee Act., which was eliminated under the Bush Administration. Serving as an independent advisory committee to Energy Secretary Steven Chu, the twelve-member board is comprised of scientists, business executives, academics and former government officials. The Board will provide advice and recommendations to the Secretary on the department’s research, economic and national security policy, educational issues, and operational issues. SEAB reports directly to the Secretary of Energy. Here is a list of the board members...

NREL Study Finds Feed-in Tariffs Are Responsible for 75% of all Solar PV Deployments

Environmental Leader - Feed-in tariffs (FITs) are responsible for 75 percent of all solar photovoltaic (PV) and 45 percent of all wind development worldwide, according to a new report from the National Renewable Energy Laboratory (NREL), reports Wind-Works.com. The report provides a best practices design guideline for U.S. policymakers, showing the benefits and disadvantages of different FIT polices around the globe.

The report, “A Policymaker’s Guide to Feed-in Tariff Policy Design,” finds that FITs are the most widely used renewable energy (RE) policy in the world, accounting for a greater share of RE development than either tax incentives or renewable portfolio standard (RPS) policies. It has fueled significant growth of renewable energy in Europe over the past decade, reports Wind-Works.com.

Revisiting Reshoring – Accelerating, But Gradually

Mfg.com (AJ) - There’s a LOT of discussion around repatriating work back to the U.S. lately – in the press, the blogosphere, the gubmint, business and broadcast media. That’s all good, no matter what your take is on the topic. But talk is cheap … for this “trend” to become a movement will require action to improve the climate for doing business here. But the current economic landscape doesn’t bode well for that happening at meaningful levels...To get a sense of how the reshoring topic is heating up, have a look at a few of these recently published pieces. While the cadence of these stories is increasing, we will all need to be active & attentive to maintain it beyond our limited attention span.

Supply Chain Woes Threaten Global Recovery (Financial Times; registration required) – The costs of segregating production far from a sophisticated R&D entity. (MFG.com’s most recent MFGWatch survey is cited here)

Some Manufacturing Heads Back To USA (USA Today) – The fact that this topic has been covered in USA Today shows that reshoring has hit the mainstream – nothing but good, this.

Some Businesses Learning Value Of Bringing Factories Back To The US (www.knoxnews.com) – This piece with a local TN focus is extraordinarily well-written and thorough in its description of reshoring and its causes. (Kudos to author Ed Marcum)

Returning Jobs (Watertown [NY] Daily Times) – Another regional perspective, this time an editorial from upstate New York.

Reshoring Goes Mainstream (EvolvingExcellence.com) – Recognition of the importance of the USA Today article to the reshoring “trend.” If these guys are on it, you know it’s relevant.

Ford Wants Better Relationship with Suppliers

IndustryWeek (Amend) - Company will source two-thirds of its global programs from preferred parts suppliers...Ford Motor Co. intends to slash its global supplier list to 750 from the 3,000 it employed just a few years ago. The reduction is part of the company’s vaunted "One Ford" strategy, Birgit Behrendt, Ford's newly appointed purchasing director of global programs and the Americas. For full story click here

New Bill Proposes to Strengthens Government Authority over Pharma Supply Chain

IndustryWeek (Selko) - Society of Chemical Manufacturers welcomes closer inspection of active drug ingredients manufactured overseas...The Drug Safety and Accountability Act of 2010 was introduced on August 3 by Michael Bennet, U.S. Senator for Colorado... One of the reasons for the increased scruity of the quality of the medicine is due to the record 1,742 drug recalls in 2009 which is a 400% increase from the prior year. And the emphasis on foreign production is due to the fact that up to 80% of the active ingredients in U.S. drugs are now made overseas, many in countries where regulatory oversight does not meet U.S. standards, according to the Senator.

The stuff electric vehicles will be made of...

cars21.com - In the endeavour to reduce weight in order to improve fuel efficiency in normal cars and range in electric vehicles, the automotive sector has come up with a number of material changes over the last few years. cars21.com summarises some of the trends. Manufacturers are experimenting with aluminium and carbon fibre to replace steel, the real deal however seems to lie in a new generation of polymers, composites and fabrics that will help build the light-weight, ultra-performant, climate friendly car of the future...

Government should shift focus from productivity, say analysts

The Manufacturer - Small and medium-sized enterprises could be the fastest route to recovery, creating jobs that require and teach a wide range of skills and boosting indirect employment, according to a report by the University of Cambridge’s Institute for Manufacturing (IfM). However, over the past 10 years business support channelled towards efficiency improvements and increased competitiveness has led to fewer jobs and stifled GDP growth, the report warns.

While productivity remains important, the IfM says that focussing on growth will lead to increased sustainable employment and financial value for businesses. Peter Templeton, chief executive of IfM Education and Consultancy Services, said: “Put simply, by giving SMEs appropriate tools to help them develop a coherent strategy, with a clear basis of competition, by helping prioritise where to focus scarce resources, and by developing capabilities we can boost their chances of swift growth.”

The report comes soon after the Department for Business, Innovation and Skills (BIS) called for greater private investment in SMEs, saying that private investment will be the fundamental driver to economic recovery and that more must be done to help established small businesses reach their full potential. Click here to read the full press release, Click here to download the report

Public Policy Can Fuel the Clean Energy Economy, Report Shows

SSTI - The clean energy economy has "tremendous potential for growth" due to policies that create incentives to "develop new technologies, infrastructure and processes for clean energy, efficiency and conversation," according to a recent report from the Pew Charitable Trusts. Five types of policies - Financial Incentives, Renewable Portfolio Standards, Energy Efficiency Standards, Regional Clean Energy Initiatives and Vehicle Emissions Standards - should continue to fuel the growth of the clean energy technologies over the coming years. Effective leveraging of federal stimulus dollars intended for renewable energies also should help to spur economic growth and innovation in the sector. For example, utilizing $36 million in stimulus dollars, Florida launched its Clean Energy Investment Program to spur long-term growth in the clean energy sector.

DOC Appoints 24 Members, Including Rockwell Automation, to the 2010 Manufacturing Council

JSOnline (Schmit) - U.S. Commerce Secretary Gary Locke added an executive from Rockwell Automation Inc. to a federal advisory panel on manufacturing policy, Rockwell announced Friday.

Michael Laszkiewicz, a Rockwell vice president, became the 24th member of the 2010 Manufacturing Council. Rockwell has been active in Washington in lobbying efforts to shape manufacturing policy at a time when China and other international rivals are increasingly competitive pressures on American factories. In particular, Rockwell champions the idea of ultra-sophisticated and highly automated "smart factories" that hike productivity to unprecedented levels and make western manufacturers more competitive with low-wage Asian rivals. See DOC Press Release

How Can We Boost Productivity?

National Journal (Maggs) - Ken Rogoff thinks productivity growth and supply-side policy have been neglected in the discussion of how to avoid a Japan-style lost decade. Other than keeping taxes low and efficient, what policies would boost productivity? Has America's high productivity been mostly accidental? Which productivity-enhancing policies have purposefully given American an advantage over Japan and Europe?

The 2010 National Engineering Survey

Consulting-Specifying Engineer conducted a comprehensive survey on a large sample of its total circulation of more than 40,000 engineers...The National Engineering Survey presents a comprehensive look at the role of engineers in today’s building-construction environment. Apparent in the results is that engineers face many challenges, some of which are traditional, while others represent conflicts with traditional engineering practice.

On the one hand, they have to satisfy continually changing codes and standards and the traditional mandate that systems have to be well designed and accurately specified. Just doing this amount of work is becoming harder due to shrinking budgets and tightening schedules, especially in the current economic circumstances. To look more deeply into issues beyond initial construction, i.e., lifecycle issues, which are not codified, seems to be beyond the scope of their contractual requirements.

ACEEE Launches Portal to Celebrate 30 Years of Energizing Efficiency

ACEEE - Thirty years ago, the nascent field of energy efficiency - the energy you will never need to use - was beginning to gain traction in both technical and political arenas. The visionaries who first promoted this powerful resource inspired ACEEE's creation and that of a host of sister energy efficiency organizations that now span the entire globe.

Our new Web site is a portal to ACEEE's wealth of research, analysis, and community building over the last 30 years and a bridge to our future work. We salute you, our friends, supporters, and colleagues, and invite you to share in our celebration of three decades of collaborative progress in achieving greater economic productivity, energy security, and environmental protection.

Virginia Tech and GM announce creation of the National Tire Research Center

Virginia Tech (Box) - Virginia Tech announced today the establishment of the National Tire Research Center (NTRC), an advanced tire research and test facility to be established in Southside Virginia. The facility is a partnership between the Virginia Tech Transportation Institute, General Motors (GM) Company, the Department of Mechanical Engineering in Virginia Tech’s College of Engineering, the Institute for Advanced Learning and Research (IALR), the Southside Virginia community, and the Virginia Tobacco Indemnification and Community Relations Revitalization Commission. Funding for the center will total $14 million with $5 million provided by GM, $5 million from the Tobacco Commission and $4 million from Virginia Tech.

Hat Tip: Innovation Daily

June manufacturing technology consumption up 35.8%

AMT - June U.S. manufacturing technology consumption totaled $241.47 million, according to AMT - The Association For Manufacturing Technology and AMTDA, the American Machine Tool Distributors’ Association. This total, as reported by companies participating in the USMTC program, was up 35.8% from May and up 71.1% from the total of $141.12 million reported for June 2009. With a year-to-date total of $1,207.60 million, 2010 is up 56.1% compared with 2009.

Senate Testimony on Obama's Manufacturing Agenda

U.S. Senate - On August 5th, Senate Committee on Banking, Housing and Urban Affairs held a hearing on President Obama’s manufacturing agenda. The witnesses included Mr. William Strauss, Senior Economist, Federal Reserve Bank of Chicago; Ms. Nicole Y. Lamb-Hale, Assistant Secretary of Commerce for Manufacturing and Services, U.S. Department of Commerce; and Mr. Roger D. Kilmer, Director of Manufacturing Extension Partnership, U.S. Department of Commerce.

Introducing ULE 880 - Sustainability for Manufacturing Organizations

Green Biz (Makower) - Today, a new sustainability standard for companies is being released for public comment: ULE 880 - Sustainability for Manufacturing Organizations, a partnership between UL Environment, a division of Underwriters Laboratories, and my colleagues at GreenBiz.com.

A 45-day comment period opens today, during which we're hoping you will review the draft standard and provide detailed feedback. (More about that in a minute, but if you're in a rush to get there, click here.)

ULE 880 covers five domains of sustainability...

U.S. economic outlook continues to stabilize, uncertainty about the global economy lingers among U.S. industrial manufacturers

PricewaterhouseCoopers - Manufacturing Barometer reports that optimism about the U.S. economy is down slightly from last quarter, but still shows strength with almost half (45 percent) of U.S. industrial manufacturers optimistic about the next 12 months, according to the Q2 2010 report. Only 12 percent of industrial manufacturers are pessimistic about the U.S. economy’s prospects over the next 12 months, while 43 percent are uncertain. Of those marketing abroad, 38 percent are optimistic about the world economy over the next 12 months, down 15 points from last quarter. More respondents are uncertain, at 46 percent, but only 16 percent are pessimistic.

For the second quarter in a row, legislative/regulatory pressures ranked highest among perceived barriers to growth over the next 12 months, with 63 percent of panelists naming it as a concern (down 10 points from last quarter). Taxation policies rose 14 points this quarter, cited by 57 percent. The number concerned about lack of demand dropped 13 points in Q2 2010 but remains a potential barrier according to 50 percent of respondents, followed by the monetary exchange rate, cited by 40 percent of panelists. On the positive side, decreasing profitability dropped 12 points this quarter, with only 35 percent citing it as a possible barrier to growth.

New NIST report advises: Securing critical computer systems begins at the beginning

EurekAlert -  Information systems and components are under attack throughout the supply chain from the design phase—including specification and acquisition of custom products—through disposal. "Computer systems are under attack before installation by adversaries enabled by growing technological sophistication and facilitated by the rapid globalization of our information system infrastructure, suppliers and adversaries," Swanson says. NIST has released a public draft of the new report for comment.

The supply chain report is geared to information systems that are categorized as "high-impact level," systems for which the loss of confidentiality, integrity or availability could be expected to have a "severe or catastrophic adverse effect on organizational operations, organizational assets or individuals." The report provides an array of practices designed to help mitigate supply chain risk throughout the life cycle, not just on accepting systems and products "as they are" and managing risks after delivery. The practices are based on security procedures found in NIST special publications, and those from the National Defense University and the National Defense Industry Association, and these are expanded to include implementations specific to mitigating supply chain risk.

NIST is requesting comments on the draft document to be sent to scrm-nist@nist.gov by August 15. Recommended Security Controls for Federal Information Systems and Organizations (Rev. 3), available on-line at http://csrc.nist.gov/publications/nistpubs/800-53-Rev3/sp800-53-rev3-final_updated-errata_05-01-2010.pdf.

Democrats Focusing On Boosting Manufacturing Jobs

Washington Post (Montgomery, Dennis) reports that congressional Democrats are "shifting toward a longer-term strategy that promises to tackle persistently high unemployment by engineering a renaissance in American manufacturing." This approach, first "heralded by Obama last week in Detroit and sketched out in a memo to House Democrats as they headed home for the August break, is still evolving and so far focuses primarily on raising taxes on multinational corporations that Democrats accuse of shipping jobs overseas." "We know manufacturing produces good jobs, high-paying jobs," House Majority Leader Steny H. Hoyer said this week "as Democrats released a report showcasing small gains in manufacturing since Obama took office." The Post notes that the "Make It in America" has "won high marks from United Steelworkers President Leo Gerard. The Republican-leaning National Association of Manufacturers has been less enthusiastic, though Hoyer said he was working with NAM...to incorporate their ideas." Hat Tip: NAM

Federal Agencies Join Forces to Spur Energy Innovation

SSTI -  The Department of Energy and the Department of Defense have agreed to cooperate on the acceleration of clean energy innovation and strengthening the nation's energy security. Under this Memorandum of Understand (MOU), the agencies will work cooperatively together in the several areas including energy efficiency, alternative fuels and renewable energy. An under-secretary level working group will coordinate R&D efforts between the agencies. This will allow the agencies to reduce "waste" by avoiding the duplication of energy innovation efforts. The agreement also calls for DOD installations to serve as test beds for research. Read the MOU.

Establishment of a public-private partnership — "Operation Energy Innovation Center" — was among the other recommendations included in the report. Due to DOD's size and characteristics of military culture (e.g., organizational discipline, efficiency, supply-chain management), it is "uniquely positioned to spur energy innovation." This public-private partnership if adopted could lead to the development of energy technology incubators. These centers would be modeled after the DOE's innovation Hubs. They also recommended that the DOD should make installation of clean energy technologies at military institutions a priority. Read the report

Congressional Report on Manufacturing

Joint Economic Committee - A report released on Monday by the Democratic majority staff of the U.S. Congress Joint Economic Committee (JEC), observed fragile and uneven growth for the U.S. manufacturing industry.

Targeted Policy Actions Needed to Bolster Fragile Manufacturing Recovery
Congress and the Administration are targeting the manufacturing sector with policies aimed at rebuilding the industry and are committed to growing the country’s exports in the coming years. Actions to support the manufacturing sector include: support for exports, tax credits for clean energy manufacturing, and efforts to spur domestic demand for vehicles. The House has already passed many of these critical actions. Pending Senate action, Congress is poised to take significant steps toward insuring that this bright spot in the economy continues to light the way toward a better tomorrow. The attached table highlights legislation and presidential actions taken that may help support the manufacturing sector during the recovery...

Suppliers Made Deep Cuts to Research and Development Budgets

APICS e-News (Detroit Free Press) - After auto suppliers made deep cost cuts to survive the downturn, research and development (R&D) budgets are looking thin, according to a study by accounting firm Grant Thornton. The Detroit Free Press reports that Grant Thornton analyzed 20 publicly traded parts makers that supply directly to automakers. The study shows that those suppliers cut their R&D budgets by a total of $3.3 billion in 2009, or an average of 29 percent compared with 2008.

Hiring for research and development appears to have slowed significantly. A May study by the Original Equipment Suppliers Association shows that 26 percent of suppliers surveyed expect to make no net gains in headcount for salaried personnel, while 9 percent of suppliers said they would make no net gains in hourly personnel. The outlook for smaller parts makers down the supply chain also isn’t upbeat, and their R&D budgets have seen similar cuts. “They don’t have access to the capital markets that [direct suppliers have],” Mellville says.

Control Systems a New “Bull’s-eye” for Hackers

Automation World (Iversen) - The Stuxnet worm that attacked Siemens SCADA and control systems is highly sophisticated, and should be a wake-up call for the industrial controls community, say security experts.

We’ve always been ‘collateral damage,’ as control system owners and operators. We just sort of get hit by the viruses as they go by, for the most part,” Byres added. “But now, we’re in the bull’s-eye. Whoever wrote this, wrote it specifically to go after the SCADA and control systems world. So they understand what they’re going after, and we’re no longer able to hide behind ‘security by obscurity' ...

Applied Materials switches solar panel production and focuses on LED light

San Jose Business Journal (Duan) - Applied Materials Inc. is shifting away from one form of solar production to another in an effort to produce a cheaper and more efficient solar panel. This shift, along with Applied’s announcement that it will focus on manufacturing LED lighting, will be an opportunity for companies in the supply-chain sector.

Applied had been focusing on a technology known as amorphous silicon, which is rooted in semiconductor technology, for its panel. But it was very expensive and less efficient than other forms of thin-film. Experts said the poor economy and lack of large-scale solar projects forced the company to rethink its manufacturing strategies. To adjust to those changes, the company will use crystalline silicon, a cheaper, highly efficient form of thin-film for its panels.

Electric aircraft generates buzz at Oshkosh air show

Chicago Tribute (Hilkevitch) - Boeing working on hybrid plane to cut fuel use, noise, emissions.

Chicago-based Boeing is working on a concept plane called the SUGAR Volt that would use turbine engines and electric motors connected to the fans to more efficiently propel the electric airliner. On flights of up to 900 miles, the SUGAR Volt would cruise almost exclusively on battery power, said Marty Bradley, a technical fellow at Boeing's research and technology division in Huntington Beach, Calif. An electric propulsion system would help slash the amount of fuel burned as well as noise around airports by about 70 percent compared with today's airliner fleet, say aerospace researchers who believe they can have such a flying machine up and running by about 2035.

On a smaller scale, a competition is under way to develop by next year a personal commuter aircraft that operates on electricity or fuel cells and can average at least 100 mph on a 200-mile flight while achieving greater than 200 passenger mpg. The Green Flight Challenge, sponsored by NASA and the CAFE Foundation, offers a $1.5 million first prize for the aircraft with the best performance. Some of the competing teams presented their designs at the Oshkosh air show. The participants included aerospace engineers and students at Embry-Riddle Aeronautical University, Georgia Tech University, Penn State University and the University of Colorado. "The concept is winnable. The engineering still needs to get done,'' said Jack Langelaan, an assistant professor at Penn State.

Proposed Tax Credit For Investing in SBIR companies

Innovation Daily (Olaide, The Pursuit) - The House Ways and Means Committee in Congress is considering a bill sponsored by Representative Chris Van Hollen of Maryland that would provide a 25% credit to investors in some types of technology.

The credit would apply to equity investors who invest in a company that has already qualified for a grant under the Small Business Innovation Research (SBIR) program. The Federal government provides grant funding under the SBIR program to support some high priority technology and biotech research. SBIR grants typically range from $100,000 to $750,000. The credit for investors would also be capped at 50% of the SBIR grant award in a particular company, and would also be limited to a total of $500 million in tax credits per year.

The bill, which was introduced on July 15, 2010 and co-sponsored by three other House members, is called the Innovative Technologies Investment Incentive Act. SBIR grants are directed toward small businesses, so the impact of this bill would be seen at the small business level.

Manufacturers Wrestle With Chemicals Regulation

IndustryWeek (Katz) - Producers worry that changes to existing rules will put the industry at a competitive disadvantage...Proposed changes to a decades-old federal toxic substances law has the U.S. chemicals industry concerned that the proposed reforms could stifle innovation and move production offshore. Any changes to existing regulations also could have a far-reaching impact throughout manufacturing supply chains. At issue are proposed reforms to the Toxic Substances Control Act of 1976. Representatives Henry Waxman (D-Calif.) and Bobby Rush (D-Ill.) introduced HR 5820, known as the Toxic Chemicals Safety Act of 2010, on July 22. The bill would strengthen the federal government's authority over chemical substances in the marketplace by increasing chemicals manufacturers' reporting requirements to the Environmental Protection Agency.

It's Time to Give Up Spreadsheets for Tracking Carbon Emissions

Green Biz (Baier) - CFOs, CIOs and sustainability teams at large companies have used spreadsheets for years to track corporate carbon emissions. We are now, however, at a tipping point where the benefits of carbon management software, also known as enterprise carbon accounting (ECA) software, outweigh the benefits of spreadsheets. With many large companies recently completing their Corporate Social Responsibility (CSR) reports and Carbon Disclosure Project (CDP) questionnaires, and entering budget planning in the fall, it is time to move away from spreadsheets to reduce risk, save money, increase productivity, and establish an enterprise-class source of record for carbon emission data....

France presents strategy for green economy

EurActiv - Paris hopes to tune into the green economy by increasingly placing eco-labels on everyday products, designing a green industrial policy and developing a more sustainable farming model. French Environment Minister Jean-Louis Borloo this week (27 July) presented another national strategy for sustainable development, for the period 2010-2013. The new strategy identifies nine strategic challenges for achieving "a green and fair economy".

The document represents a sort of short upgraded summary of the French green bill, the Grenelle de l’environnement, which sets out a series of commitments and objectives for environmental policy. For sustainable consumption and production, the idea is for the government to act in parallel with consumers and producers in sharing responsibility for changing both purchasing behaviour and manufacturing practices, to integrate sustainability into the whole life-cycle of products and services.

Fossil Fuel Subsidies Are 12 Times Support for Renewables, Study Shows

Bloomberg (Morales) - Global subsidies for fossil fuels dwarf support given to renewable energy sources such as wind and solar power and biofuels, Bloomberg New Energy Finance said. Governments last year gave $43 billion to $46 billion of support to renewable energy through tax credits, guaranteed electricity prices known as feed-in tariffs and alternative energy credits, the London-based research group said today in a statement. That compares with the $557 billion that the International Energy Agency last month said was spent to subsidize fossil fuels in 2008. “One of the reasons the clean energy sector is starved of funding is because mainstream investors worry that renewable energy only works with direct government support,” said Michael Liebreich, chief executive of New Energy Finance. “This analysis shows that the global direct subsidy for fossil fuels is around ten times the subsidy for renewables.”

From Recession to Recovery: Analyzing America’s Return to Growth

Innovation Daily (DeVol, Milken Institute) - Tangible signs of U.S. economic turnaround are evident, and the recovery is already under way, according to this economic analysis from Ross DeVol, Executive Director of Economic Research. 

From Recession to Recovery: Analyzing America's Return to Growth calls for modest but sustainable growth in GDP, consumer spending and jobs. According to DeVol, strong recovery in business investment in equipment, more robust exports, a more upbeat consumer and continued low interest rates will fuel the growing recovery.

Key points in the forecast:

House Pitches Bill to Spur Green Manufacturing

IndustryWeek (Alpern) - Democrats propose tax incentives to modernize manufacturing facilities and encourage renewable energy...Thee House is moving forward on a bill that would provide $25 billion in tax credits to manufacturers of renewable energy equipment and funding for other sources of clean energy. House Ways and Means Committee Chairman Sander Lavin (D-Mich.) introduced legislation on July 26, referring to it as a “discussion draft”, which includes $6.5 billion worth of investment tax credits for manufacturers that re-equip, expand or establish domestic manufacturing facilities that produce advanced energy equipment.

The bill is part of an effort to build on top of the $2.3 billion of investment tax credits provided by the 2009 economic stimulus package and give financing tools to state and local governments to encourage energy-efficiency. The new bill would extend federal subsidies for wind and solar power facilities that received funding last year.

Lithium Battery Oversupply Debate Rages

greentechmedia (moslet) - Makers of lithium-ion batteries are rapidly expanding their factories in anticipation of a ballooning market for electric cars. The trouble is, none of them can be sure what the demand will be..For many battery makers, the consequence of long-term oversupply could be catastrophic. A flooded market will push down prices and send profits tumbling. Start-ups with innovative technology could find it hard to survive.

Recovery Act funds have played a big role in the build-out. One company to benefit is Johnson Controls-Saft. Without stimulus funds, the company would have built a factory in Asia, says John Schaaf Jr., vice president of market development at Johnson Controls. John Gartner, a senior analyst at Pike Research, says oversupply is possible. He projects that by 2015 the installed price of battery systems (including thermal management gear and other finishing equipment) will be cut in half.

US Recovery Act: the progress so far in electrifying America’s transport
cars21.com - The US Department of Energy has released a report which documents how the funds from the Recovery Act have been allocated so far in projects related to electric vehicles, how investments interact to stimulate both supply and demand for electric vehicles, as well as the progress so far and the future expectations in terms of advancing electromobility in the US. Read the report

House Approves Legislation To Boost Manufacturing

Wall Street Journal (Raice, Dow Jones Newswires) - House passes bills to boost US manufacturing...was part of the larger "Make it in America" agenda from House Democrats. One of the bills, the National Manufacturing Strategy Act, would require the President to submit a four-year national manufacturing strategy policy plan to Congress. Sponsor Daniel Lipinski (D, IL) said, "After 110 years as the world's top manufacturing country, the United States is about to lose that perch to China. ... But American manufacturing job loss is not inevitable and I do not accept the notion that there's nothing we can do." The bill passed 379 to 38. While they supported it, some Republicans said it didn't do enough. Ed Whitfield (R, KY) said, "Creating another commission, another strategy, another report falls far short of a solution." Hat Tip: NAM

The Next 9/11: The Risk of a Supply Chain Cyber War

SupplyChainBrain (Gonzalez, ARC Advisory Group) - In the early days of software-as-a-service, security was arguably the top concern many companies had about deploying a SaaS application. While security remains important today, it is no longer a roadblock to implementation, as SaaS has evolved from early-adopter stage to broad adoption, and as solution providers have invested in security (e.g., SAS 70 Type II certification). Google (and presumably Microsoft, too) getting the stamp of approval from the federal government is an important milestone for cloud computing and SaaS. In the WSJ article, Parker Harris, executive vice president of technology at Salesforce.com, which is also seeking GSA approval, agrees: Google’s certification “is validation for cloud computing for the government, and that helps the entire industry.”

Is a 9/11-like cyber attack a low probability, high impact supply chain risk? Perhaps, and there is plenty of literature on how to manage such risks, which includes keeping your fingers crossed and doing nothing. Doing nothing (or not much more than what you’re doing today) might be a justifiable decision, but it’s a decision that has to be reached after your supply chain team and corporate executives have thoroughly analyzed and discussed this risk. The goal is to avoid asking, sometime down the road, how you could have been so complacent for so long.