To stay competitive and successful, New York manufacturers need to embrace the latest innovations.

In recent years, manufacturers around the world are becoming increasingly interrelated using blockchain technology. How popular is the technology? Amid the COVID-19 crisis, the global market for blockchain in manufacturing was estimated at $32.6 million in 2020, and is projected to reach $980 million by 2026 according to a new market study published by Global Industry Analysts Inc., (GIA).

Blockchain technology has the potential to transform the supply chain by automating processes and making it virtually impossible for someone to make unauthorized changes. It can streamline the supply chain, improve transparency, facilitate auditing and reduce costs. So, how can you maximize the benefits of this technology?

Wait, What Is Blockchain?

First, let’s make sure you know what blockchain is, and we’ll go from there. Blockchain is a database that relies on a chain of data blocks and is linked by cryptography. It’s designed to deter data modification. Instead, once the data is recorded, it can’t be altered retroactively, making it difficult for a single user to gain control of the system.

One of the main differences between blockchain and a typical database using tables is the inherent structure. With blockchain technology, the information is stored in the blocks holding various sets of information. When the block is filled, it’s added to the existing chain. Any new data that’s compiled is stored in a new block that can be subsequently added to the chain. If you’re still struggling to understand this technology, here is a helpful short video you can watch to illustrate it further.

Blockchain Benefits?

Blockchain technology offers enhanced visibility across the entire manufacturing process, including operations at supplier warehouses, on the plant floor and all along the supply chain. As participation grows, users can benefit from the ledger structure to improve efficiency. Blockchain technology may help improve the following aspects of the manufacturing process:

• Identification of problems in products

• Product designs

• Identity management

• Asset and procedures tracking

• Quality assurance

• Compliance with regulations

• Overall efficiency

Which Operational Aspects Are Improved?

Part of manufacturing is constantly improving your operation to boost efficiency. The main areas blockchain can help manufacturers in is improved performance and product quality. Ultimately, this leads to increased revenue and profits. Manufacturers who use blockchain typically see results in the following four areas of day-to-day business operations:

1. Quality control. Besides in-depth tracking up and down the supply chain, blockchain creates definitive documentation of quality checks and production data. Significantly, the database tags each product and automatically records each transaction, including quality checks and updates.

In addition, the system may be set up to provide automated quality checks that generate and write measures directly to the blockchain. This eliminates the need for other traditional checks for quality control involving suppliers. It may also reduce the number of audits required for verification of quality controls.

2. Tracking and tracing.Data is more transparent and accessible through blockchain technology. The system provides a permanent digital record of materials, parts and products, creating a single “voice of authority” for all participants.
3. Better maintenance.Blockchain creates the potential to support maintenance improvements, such as automated service agreements that can accommodate the influx of new types of machinery. With blockchain, machines can easily be scheduled for maintenance and serviced with greater speed and efficiency. For instance, a request for machine maintenance or a replacement part may be automatically triggered. After the procedure is performed, payment processing is instantly implemented. In addition, blockchain keeps track of maintenance records. These procedures are currently still in the development phase, but they’re widely viewed as an important component of the system.
4. Intellectual property protection.Don’t ignore the role that blockchain can play in protecting intellectual property and deciding whether to produce parts in-house or with an outside supplier. The blockchain data may create a virtual certificate of authenticity, helping prove that property is owned in the event of a patent dispute.

What’s Next?

Blockchain technology may result in a new business model for manufacturers to achieve competitive advantages in 2021 and beyond. Wondering if this technology is right for you? Contact RBT’s team of dedicated professionals now to discuss whether this approach should be a part of your long-term strategy.

Sources: GIA, © 2020, Powered by Thomson Reuters Checkpoint, Lucas Mostazo,

Manufacturing success typically relies this golden rule: produce more, spend less.

There is no better illustration of how to successfully follow that rule, than to practice lean manufacturing. Lean manufacturing is defined by Twi Global as a production process based on an ideology of maximizing productivity while simultaneously minimizing waste within a manufacturing operation. The lean principle sees waste as anything that does not add to the value that customers are willing to pay for. The benefits of lean manufacturing include reduced lead times and operating costs and improved product quality. Lean companies operate as efficiently as possible, using the least possible staff time, equipment, and raw materials. In the high-cost, high-risk environment we’re living in, efficient use of raw materials is more essential than ever before. Below are four steps your team can take to boost profits as we finish out the year and head into 2022.

1. Use Raw Materials More Efficiently

As you’re well aware, the prices of many manufacturing inputs — like metals, chemicals, and lumber — have skyrocketed over the last year. In June, manufacturers reported the biggest price jump in 42 years. The Institute for Supply Management’s manufacturing price index rose to 92.1% last month, up 4.1% and hitting its highest mark since July 1979. It was the 13th straight month of price increases in the sector. Add to the mix that rising fuel prices have increased shipping costs, cyberattacks, and geopolitical instability threaten the viability of supply chains due to delays and price fluctuations. It’s not exactly an easy environment to operate in.

Rethink the term “waste” if you think it just refers to scraps on the plant floor. Waste can include excessive energy consumption, defects, motion, transport, queue time, and inventory. Analytical tools can help reduce waste by limiting the number of “touchpoints” that slow down or complicate the production process. Start by collecting data at every touchpoint in the supply chain and production cycle. Apply the metrics that make sense for your industry. If your processes require raw materials to cool down or heat up, factor the time into your equation. When your fact-finding is complete, assess the ways you can increase future efficiency.

2. Give Incentives to Workers

Remember, frontline workers often provide the most effective solutions. As a bonus, engaging your workers in the brainstorming process can help with their buy-in when you implement changes. We cannot overstate enough how essential workers are in terms of successful lean manufacturing. Financial incentives can help persuade your employees to ramp up production. You can approach this through:

Individual incentives: which focus on specific tasks performed by frontline workers to increase productivity and avoid delays. If you can isolate certain tasks where a definitive need for improvement is identified, giving individuals a specific list of set goals may be the optimal approach.

Team incentives: which reward collective efforts. Because most tasks are done in conjunction with others, team incentives are usually easier to implement. Manufacturers can provide team incentives to improve the overall efficiency of the assembly line and encourages cooperation among workers.

3. Extend Lean Principles to Offices

Lean efforts initially focus on the production process because it provides the most significant direct benefits, but the same principles can be applied to your back offices and corporate headquarters. These locations may also be affected by cost increases, supply disruptions, and delays. Apply the principles you’ve learned on the plant floor to selling, accounting, and other administrative functions. For instance, you might break office staffers into groups based on products or marketing aspects.

4. Seek Outside Guidance

It’s easy to miss operational inefficiencies when you’re too close to the process. At some point, you might call in external guidance. This could include reaching out to industry specialists or financial consultants with experience helping companies in your niche implement lean strategies. Do your research and rely only on reputable sources. For more insight on how to help your business thrive and adapt, contact our Manufacturing Services Group today to schedule a conversation. Whatever the size of your venture, we can help you meet your immediate and long-term goals.

Source: © 2020, Powered by Thomson Reuters Checkpoint

Looking for loan money? It’s time to consider The United States Department of Agriculture (USDA). Yes, even if you are scratching your head and thinking, “but my manufacturing operation has nothing to do with farming,” you could still be eligible. The USDA is indeed responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. But your company may still qualify for USDA guaranteed loans regardless. These loans are very similar to Small Business Administration (SBA) loans, but with a focus on promoting small businesses and creating jobs in rural communities. The USDA Rural Development program improves the economic health of rural communities by increasing access to business capital through loan guarantees which enable commercial lenders to provide affordable financing for rural businesses.

Who qualifies for the Business and Industry (B&I) Guaranteed Loan Program?

• For-profit or non-profit businesses
• Cooperatives
• Federally-recognized Tribes
• Public bodies
• Individuals engaged or proposing to engage in a business

In terms of restrictions: individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence. Additionally, private-entity borrowers must demonstrate that loan funds will remain in the U.S., and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.

 What is considered an eligible area?

• Rural areas not in a city or town with a population of more than 50,000 inhabitants
• The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area
• The lender may be located anywhere in the United States
• Projects may be funded in either rural or urban areas under the Local and Regional Food System Initiative
• Check eligible addresses for Business Programs

How can my company use these loan funds?

• Business conversion, enlargement, repair, modernization or development
• The purchase and development of land, buildings and associated infrastructure for commercial or industrial properties
• The purchase and installation of machinery and equipment, supplies or inventory
• Debt refinancing when such refinancing improves cash flow and creates jobs
• Business and industrial acquisitions when the loan will maintain business operations and create or save jobs

What can these loan funds NOT be used for?

• Lines of credit
• Owner-occupied and rental housing
• Golf courses or golf course infrastructure
• Racetracks or gambling facilities
• Churches or church-controlled organizations
• Fraternal organizations
• Lending, investment and insurance companies
• Agricultural production, with certain exceptions (1)
• Distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower

What is the maximum amount of a loan guarantee?

The loan guarantee percentage is published annually in a Federal Register notice. B&I loans approved in Fiscal Year 2021 will receive an 80 percent guarantee. While there is no minimum loan amount, USDA B&I loans generally do not exceed $10 million (with some exceptions going up to $25 million or more). Most USDA business loans are between $200,000 and $5 million, with the average loan amount around $3 million. There are, however, requirements on the loan-to-value ratio, which are based on how you plan to use the funds. This also means that you’ll need to make a down payment for the loan.

What are the loan terms?

The lender will establish and justify the guaranteed loan term based on the use of guaranteed loan funds, the useful economic life of the assets being financed and those used as collateral, and the borrower’s repayment ability. The loan term will not exceed 40 years. Interest rates are negotiated between the lender and borrower. Rates may be fixed or variable. There is an initial application guarantee fee, currently 3 percent of the guaranteed amount. There is a guarantee retention fee, currently 0.5 percent of the outstanding principal balance, paid annually (2). Reasonable and customary fees for loan origination are negotiated between the borrower and lender. Qualifying projects may receive a reduced fee of 1 percent.

How do I get started?

Applications are accepted from lenders through USDA local offices year-round. Interested borrowers should inquire about the program with their lender, and lenders interested in participating in this program should contact the USDA Rural Development Business Programs Director in the state where the project is located. For more ideas to help your business thrive in these challenging times, contact our Manufacturing Services Group today. Whatever the size of your venture, we can help you meet your goals, now and for the future.

Sources: USDA, Value Penguin

The pandemic continues to present endless challenges for the manufacturing industry.

Many of the same employees who helped keep companies afloat, or found themselves unemployed over the past year and a half are now feeling depleted or overwhelmed. While mental health affects many different people, you may be shocked to learn that research ranks the manufacturing industry as the fourth-highest industry in which employees are likely to suffer from anxiety or depression. A 2015 study calculated the prevalence of anxiety and depression in the manufacturing industry is 36% above the national average. While this is an unsettling reality to confront, consider using this May Mental Health Awareness Month as an opportunity to shed light on challenging issues and improve the lives of your team members.

Mental Health Awareness Month can act as a catalyst for starting hard conversations and effecting lasting change.

Start conversations about how the pandemic is affecting work; communicate clear expectations; anticipate behavior changes, (such as irritation, anger, increased sadness, or trouble concentrating) and ensure that there is a system in place to identify and provide mental health services to those in need. Did you know the productivity costs of mental health issues due to decreased performance were calculated in 2011 to be up to $1,601 per employee per year? If you adjust this figure for inflation ($1,850) and then add 36% to factor in industry-specific rates of anxiety and depression, mental health issues in the manufacturing industry are costing businesses up to $2,516 per employee per year – although some sources claim the figure could be as high as $9,450 per employee per year. So, what can you do to better support your team, increase morale and productivity, and ultimately prevent a tragedy? Read on for expert advice you can weave into your company culture starting today.

Social stigmas perpetuating the notion that these workers are supposed to be tough, strong, and not show emotion or discuss feelings creates a perfect storm for workers to fall victim to this silent epidemic.

Dangerous stereotypes can leave manufacturing workers pulling from an empty toolbox of resources, ill-equipped to seek help before it’s too late. A comparison of the segments of the population struggling the most with mental health issues against Bureau of Labor Statistics (BLS) data suggests manufacturing employees may be among the segments of the population at the highest risk. For example:

• 70% of the workforce in manufacturing is male
• The median age of employees in manufacturing is 44 years
• Only 40% of manufacturing employees are educated to college degree level or higher

A common aspirational safety culture goal is “Zero Incidents,” but ironically, few have paused to consider mental wellness.

Often, our reluctance to discuss mental health issues stems from fear. Providing accessible educational opportunities can help employees replace fear with a sense of community and hope. To pave the way for a healthier, happier work environment, consider integrating the following approaches:

Oversee focus groups of 10-15 people who represent critical groups within the company and perform in-depth interviews with key influencers like business leaders, HR directors, safety directors, and others.

Teach coping skills for life’s challenges from new employee onboarding, to supervisor training, to executive coaching, to ongoing wellness workshops – these skills help employees at all levels integrate mental health into their lives and break down stigmas about seeking help. In-person or digital workshop completion can be incentivized as part of a wellness contest among teams or to meet health insurance engagement goals.

Develop a “buddy check program” that encompasses more than just physical safety. A formal peer support program is one of the best ways to promote a caring culture. In fact, many military and first responder communities have discovered this type of program is the key to building a link in the chain of survival, especially among stoic, “tough guy” cultures where men are particularly reluctant to seek professional mental health services.

Successful companies take the time to listen to employees. One of the most important initiatives a company can apply today is simply reaching out to employees on a human level. Start conversations and open up in team meetings to help employees feel supported, and comfortable sharing personal challenges. Distributing resources like the Suicide Prevention Lifeline and this list of resources from the Occupational Safety and Health Administration can be a first step in the right direction. Another suggestion? Openly encourage employee participation in training courses like Mental Health First-Aid which covers issues related to mental health and substance abuse. At RBT, we pride ourselves on assisting manufacturing professionals to build more sustainable businesses with our comprehensive services. But most importantly, we aim to pass along useful, relevant information to help our communities succeed, grow and prosper. As we continue to dedicate time and resources to help our manufacturing clients achieve success, we look forward to connecting with you and your team.

Youth, Salley Spencer-Thomas & Cal Beyer, RAVEMobileSafety

Are you interested in improving your company’s competitiveness, modernize your equipment or develop new products – but aren’t quite sure how to fund your expansion? The Linked Deposit Program (LDP) may just be the best-kept secret that you’ve been waiting for. Read on to learn more about how this economic development initiative can be a game-changer for your business this year and help you and your team to undertake exciting projects that will improve your company’s productivity, performance, and competitiveness.

What is the LDP?

The Linked Deposit Program (LDP) helps existing New York State firms obtain reduced-rate financing so they can undertake investments to make borrowing less expensive. Eligible businesses can obtain loans from commercial banks, savings banks, savings and loan associations, farm credit institutions, and the New York Business Development Corporation. Ultimately, the program helps the State to improve business competitiveness, create new jobs, generate overall economic growth, and build opportunities for disadvantaged businesses. Under LDP, eligible businesses can obtain commercial loans at an interest rate that is up to 2 or 3 percentage points lower than the prevailing rate on such loans, making borrowing less expensive.

Why was the LDP created?

In 1994, the State began the LDP to assist and encourage firms, manufacturers, and small businesses to make investments. The economy of New York State, and the nation, is undergoing fundamental change. International competition has dramatically intensified with the adoption of advanced technologies and modern production methods. In many ways, this technological renaissance is eroding the competitive position of NYS manufacturers and other businesses in the global economy, threatening profitability, employment and prospects. Economic change has had a particularly detrimental effect on minority and women-owned businesses, which are generally smaller, younger, and less well-capitalized than other businesses. All this is occurring at a time when small businesses are facing a serious shortage of bank credit, impeding their ability to take on projects to modernize their operations, improve their competitiveness, access new markets, and increase their export trade activities. In 2001, legislation was enacted to lift the sunset date and make the LDP a permanent program.

Eligible Borrowers:

• Manufacturing Firms – with 500 or fewer full-time NYS-based employees
• Service Businesses – independently owned and operated and not dominant in their field, with 100 or fewer full-time NYS-based employees

To review the extensive list of qualifying projects which may make your company LDP eligible, click here.

How does an applicant apply for an LDP, and how long before an applicant hears back?

The applicant (borrower) must apply for the loan to a participating lender, and the lender will complete and send the LDP application to the Linked Deposit Program Office of Empire State Development (ESD). The application will be approved or rejected within 28 days. (The average LDP approval time is 5 business days.) Keep in mind that the most common problems the Office of ESD encounters with applications are insufficient/incomplete information, no statement of how the project will improve the borrower’s competitiveness, an inadequate “impede” statement, or a missing NYS-45 form.

What lenders (banks) can participate in the LDP?

Commercial banks, savings banks, savings and loan associations, and farm credit institutions that are, or are qualified to become, approved depositories for NYS linked deposit funds. The New York Business Development Corporation (NYBDC) is also an approved lender. Lenders are compensated with a deposit of State funds at comparably reduced rates. LDP currently has 70 participating lenders you can review on ESD’s website, here.

Is there a maximum amount that may be borrowed under the program?

Yes. A borrower’s lifetime maximum is $2 million (including prior deposits). Every single deposit is limited to $2 million, and companies can have multiple deposits totaling up to $2 million outstanding at any time. There is no minimum loan amount.

A vibrant business sector is essential to create economic growth and generate jobs. A 2017 report for the governor and the Legislature showed assistance from the LDP created 253 jobs in 2016 and would retain an additional 268 through at least 2021. Since the program’s inception in 1994, LDP has lowered the interest rate for over 5,680 loans, resulting in $1.93 billion in bank lending and leveraging $4.03 billion in new capital investment by businesses across New York State (as of 2018 data). It is our hope that by sharing this important program with our clients and manufacturing industry professionals, New York’s businesses and the health of New York’s export trade will grow in a positive direction. For more information and instructions on applying, click here. To connect with one of our Manufacturing Service Group Team Members, please schedule an appointment through our website.

Sources: ESD, Assemblyman Will Barclay

The clock is ticking on the massive tax benefit extensions that can help manufacturers save big thanks to The Consolidated Appropriations Act (CAA). Want to learn about the savings your business is eligible for? Let’s review some of the time-sensitive highlights you can take advantage of before time runs out.

PPP Round Two

As RBT has mentioned in previous thought leadership pieces, the CAA expanded and revised the PPP, providing $284 billion for the second round. The “second-draw” opportunity allows eligible businesses with fewer than 300 employees to apply. The maximum second-draw loan amount is $2 million, through March 31, 2021, or until funding is exhausted. Plus according to the new law, expenses paid for with forgiven PPP loans are tax-deductible.

Employee Retention Credit

Under the CARES Act, eligible employers could claim the refundable employee retention credit (ERC) for 50% of the first $10,000 of wages paid to eligible employees from March through December of 2020. The CAA extends the ERC through June 30, 2021, and indicates that employers that receive PPP loans can qualify for the ERC. As of 2021, the new law:

• Increases the maximum credit to $14,000 based on a 70% credit rate for the first $10,000 of qualified wages per quarter, for the first two quarters of 2021
• Increases the number of employees allowed for eligible employer status from 100 to 500
• Makes employers that didn’t exist for all or part of 2019 eligible to claim the credit

Work Opportunity Tax Credit

Hiring workers who fall into certain disadvantaged groups? Be sure to claim the Work Opportunity Tax Credit (WOTC), which offers a maximum of $2,400 per employee (or $9,600 for a disabled veteran). This tax break was scheduled to end after 2020. The CAA extends the WOTC to cover first-year wages paid to qualifying employees who are hired in 2021 through 2025. Here is a list of target groups that qualify you for the WOTC credit.

Employer Credit for Sick and Family Leave Payments to Employees

The Families First Coronavirus Response Act (FFCRA) created an employer tax credit to cover the cost of paying for mandatory paid sick and family leave related to COVID-19. Eligible employers can claim a federal payroll tax credit for 100% of qualified leave payments which offsets the employer’s 6.2% Social Security tax component of the federal payroll (FICA) tax. Initially, it was available from April through December of 2020. As the pandemic continues, the CAA extended the credit through March 31, 2021.

Payroll Tax Deferral

You may remember that because of a 2020 presidential executive order, an employer could choose to postpone payment of the 6.2% Social Security tax component of FICA tax withheld from qualified employee wages of less than $4,000 for a biweekly pay period. Previously, the employer had to deposit the deferred tax amount with the IRS by April 30, 2021, but the CAA now extends the payment deadline for employers to December 31, 2021.

The CAA also creates various other incentives, like extending the increased deduction limit for corporate charitable cash contributions from 10% of taxable income to 25% of taxable income through 2021 and temporarily allowing taxpayers to deduct 100% of the cost of business-related food and/or beverages provided by restaurants in 2021 and 2022. The “provided by” language means this break is available for take-out and sit-down meals. The CAA also includes a provision regarding the H-2B visa program, which permits employers to temporarily hire nonimmigrants to perform non-agricultural labor or services in the United States. There are likely untapped opportunities for your manufacturing company to generate valuable saving if you only know where to look. Need help navigating the complexities of the CAA? It’s what our experts love to do. Contact our team today for a free consultation.

Sources: IRS, DOL, © 2020, Powered by Thomson Reuters Checkpoint