Review of Mission and Operations of Regional Centers

Published

February 1, 1998

Author(s)

E S. Oldsman, G M. Ugiansky, R Jarmin

Abstract

This report reviews the mission and operations of the Manufacturing Extension Partnership (MEP) Program, managed by the Department of Commerce's National Institute of Standards and Technology (NIST). It provides an overview of the program and its accomplishments to Date and reviews specific steps taken by the regional manufacturing extension centers to generate revenues and increase operating efficiency. Next, it discusses fundamental operational changes that centers would need to make to become fully financially self sufficient and the adverse effects of these actions. Finally, it offers recommendations to help the program's regional centers reduce their dependence on federal funding without sacrificing the MEP's basic mission of assisting small manufacturers to improve their competitive performance.Manufacturing firms of all sizes are facing growing global competition and large manufacturers are increasingly dependent on their smaller suppliers. As a result, the performance and capabilities of smaller manufacturers which employ two-thirds of all U.S. manufacturing workers, are fundamental to the productivity and competitiveness of the entire U.S. manufacturing sector. In 1988, the U.S. Congress directed the National Institute of Standards and Technology to establish a program to help smaller manufacturers improve their competitive performance--the NIST Manufacturing Extension Partnership responds to this request. The NIST MEP has established a nationwide network of manufacturing extension centers to provide services to smaller manufacturers in all 50 states and Puerto Rico. The NIST MEP is successful. Surveys of MEP customers conducted by the U.S. Census Bureau have shown that smaller manufacturers benefit from MEP assistance.The NIST MEP is working with its regional centers to reduce center dependence on federal funding and to generate additional revenues. Proven strategies for boosting revenue include: focusing more on repeat business; offering value-pricing to lower up-front project costs; charging project management fees; developing standard services to meet regional needs and providing them on a group basis; and focusing on larger projects. Although these strategies have met with considerable success, they need to be balanced in a manner that does not compromise the basic mission of the MEP program.Analysis indicates that to offset lost public revenue centers would need to take on much larger projects at much higher billing rates and focus on repeat business. As a result, many small manufacturers would not be able to afford these services.Given this conclusion, the best way to ensure high-caliber nationwide assistance to smaller manufacturers is to commit to a stable amount of renewable federal funding for those centers which receive successful evaluations. Federal funding of centers at a level equivalent to years five and six, e.g., one-third, offers the best opportunity for broad economic benefit to the U.S. manufacturing sector. Complete independence from federal funding would likely result in the elimination of many MEP services to smaller manufacturers. This reduction in service and increase in fees would stimulate the eventual closure of many of the regional centers, limit the diversity of manufacturing sectors or geographic regions served, and undermine the mission of the remaining centers. Reducing the dependence of centers on federal funding should be done without sacrificing its basic mission and focus on serving small manufacturers.

Citation

Review of Mission and Operations of Regional Centers

Pub Type

Others

Keywords

federal funding, small manufacturers

Citation

Oldsman, E. , Ugiansky, G. and Jarmin, R. (1998), Review of Mission and Operations of Regional Centers, Review of Mission and Operations of Regional Centers (Accessed April 25, 2024)