IndustryWeek writer lays it on the line: “While many aspects of U.S.-based manufacturing have been debated in recent years—usually with the goal of “fixing” manufacturing—two attributes have not been widely addressed: We are old and stubborn.”
In the daily news, manufacturing is usually framed with the glamorous high-tech and biotech segments. In an article entitled ‘The U.S. Manufacturing Landscape,’ writer Tonya Vinas explains, however, that—according to the IndustryWeek/Manufacturing Performance Institute 2004-2005 Census of Manufacturers—almost half of U.S. manufacturers are in the industrial equipment, automotive, or construction sectors. While high-tech gets the attention, Vinas says, ‘…most manufacturing going on in the United States today is “old school.”‘ (The census includes data from more than 1,000 manufacturing plants.)
In the face of new technologies and processes ‘…that require far less space and far more integration,’ U.S. manufacturing continues to take place largely in old facilities. Plants with a start-up date of more than 20 years ago account for 68.3% of those surveyed, with that percentage dropping dramatically with newer facilities of 11-20 (19.2%), 5-10 (9.1%) and less than 5 (3.3%) years old.
On the positive side, most (about 4/5ths) of the manufacturers surveyed have embraced one or more process improvement methods, with the top three being Lean Manufacturing leading at 35.7%, TQM at 15.9%, and a combination of Lean and Six Sigma at 8%. Also very positive, the most important goal of those manufacturers (71.8%) is high quality, followed by service and support (56.4%) and total value (39.0%). Delivery and customization come in next, with low cost, innovation, and product variety rounding out the list.
Labor, according to another IW article by Vinas—skilled labor, in fact—is an area of enormous concern. In that piece, ‘Skilled Worker Shortage: It’s Time to Fix the Kitchen Sink,’ Vinas says ‘U.S. manufacturers seem to be treating the skilled labor shortage like a leaking kitchen sink. They are ignoring it because the kitchen can still function, but eventually, that hidden pipe will rot the floor, and the sink will crash into the basement. Good-bye fresh water to drink. Good-bye cooking and cleaning. In short, good-bye kitchen.’
‘The predictions for how big this crisis will become are likely familiar but worth repeating: The U.S. Bureau of Labor Statistics says that by 2010, the number of unfilled skilled worker posts will reach 5.3 million, increasing to 14 million by 2015. According to a survey of 94 senior manufacturing executives conducted by AC Neilson for Advanced Technology Services Inc. (ATS) in 2005, two-thirds of responding discrete manufacturers expect the labor shortage to cost them $50 million over the next five years. Manufactuers in the automotive, electrical equipment, ball and roller bearing, metal valve and engine, and transmission sectors will suffer most, according to ATS.’
Despite or perhaps because of the process improvement methods mentioned earlier, more than 70% of the survey respondents indicated that they have made no (23.9%) or some progress (52.4%) in achieving world-class status. Only 2% of those 1,000 manufacturers surveyed have achieved world-class status. (Says Vinas, ‘What is meant by world-class status? World-class manufacturers tend to have empowered workforces that own the production process in terms of making decisions and achieving milestones.)
How do labor and world-class status tie together? ‘The closer a plant is to world-class status, the larger the percentage of job growth it will have. While a majority of responding plants plan no change or 1% to 10% growth in employment in 2006 compared with 2005, those closer to fully-achieved world-class status will be doing the most hiring.’
With the above in mind (Please read the IW articles, too. They’re very well written, interesting, and informative), do you believe U.S. manufacturing is headed to brighter or darker days?
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Are We Old and Stubborn When It Comes to Labor?
Yesterday’s item here on The Blog took a quick look at two IndustryWeek articles about ‘fixing’ U.S. manufacturing. Using data both from their own experience and the IW/MPI 2003 and 2004-2005 Survey of Manufacturers, a company called DDI specifically a…
As was published in the October 16th issue of the Peoria Journal Star, here’s what we can and should do to keep from becoming “Old & Stubborn” -
Meeting the employment needs of today’s manufacturers:
Why aren’t we up to the job?
By Jeffrey Owens
There aren’t enough candidates to fill America’s manufacturing jobs and the situation only promises to get worse. In fact, a recent study conducted by the Accelerator Group determined that the state of Michigan alone will experience a shortage of 334,000 skilled workers by 2012. And according to the National Association of Manufacturers, four of five U.S. manufacturers struggled to fill jobs in 2003.
The problem is not brand new. However, its potential negative impact on America’s manufacturing viability grows daily as other countries vie for larger pieces of the global manufacturing pie. Their primary advantage? Highly trained employees and plenty of them. For example, China graduates over 350,000 new engineers a year. The U.S, just 65,000. Toyota just cited a poor pool of skilled workers for why they chose to build a plant in Canada instead of the U.S.
The shortage, though, is not the real issue here. It is symptomatic of a deeper problem: a decaying image of manufacturing that no longer connects with, and even dissuades, young people considering careers.
So what does resonate with them? Money. Benefits. Growth opportunity. The ability to be the brain, not the backbone. Yes, it reflects the world we live in today. If manufacturing wants to boost recruitment, it needs to compete on the same level and talk up the same opportunities as other industries trying to woo the same candidates.
The good news, the very good news, is that this is a case of perception versus reality. Manufacturing already delivers on money, benefits, career advancement and mentally stimulating and engaging careers.
Today’s manufacturing employee earns an average of over $63,000 plus benefits including healthcare. Career growth often happens faster and along a more formalized path than you’ll find in many white-collar professions. And today’s manufacturers rely far more on brains than brawn. Computerized, factory automation has pretty much done away with the assembly line. Technologists and engineers who enter manufacturing are challenged with bottom-line business goals: improving productivity, decreasing downtime, eliminating costs while increasing quality assurance.
So how can manufacturing as an industry change how it’s perceived?
First, influence the influencers. Young high school and college graduates turn to parents, teachers and guidance counselors for advice on the age-old “What do you want to do with your life?” question. Convince the influencers that manufacturing is indeed a rewarding career and they’ll convince the recruits for you. It’s a strategy that works for the military and it will work for manufacturing, too.
Second, provide clear educational programs and curriculum that treat manufacturing as a legitimate profession—not a fallback plan for poor students. Manufacturing executives on the boards at State universities and colleges need to push for packaging coursework for “manufacturing majors and minors” and offering scholarships and graduate programs for students who intend to focus on manufacturing as a long-term career.
Third, it’s time for manufacturing to apply some innovation to how it packages and positions itself as a contemporary employer. Appeal to the individual ego by providing aspirational examples of technologists and engineers who are achieving professional goals. The Military did that with its Be All That You Can Be campaign. Avoid certain terms that minimize individuality such as “hourly wages” and anything to do with labor in general. It sends the wrong message
These recommendations may seem objectionable to seasoned manufacturing employees who don’t want to give their world over to the priorities of today’s high school and college graduates. But as the old saying goes, it’s the fish, not the fisherman, who must like the taste of the bait.
Jeffrey Owens is president of Advanced Technology Services (ATS), a factory services company that employs and trained skilled manufacturing workers to improve productivity, efficiency and profitability.