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Manufacture industry
1. Manufacturing a new industry
How manufacturing will continue to evolve
for future growth and productivity.
2. Building
the
next
manufacturing
age
The story of America’s growth as a leading force
in the global economy can only be told in tandem
with the development of the manufacturing sector.
The American economy’s origins are steeped in the innovation,
productivity and efficiency of our manufacturing industry —
an industry that still employs over 10 million working Americans
today and produces some of the world’s most important
products and goods. While history tells an iconic story of a
global manufacturing empire, the present looks very different.
3. Manufacturing a new industry
The later part of the 20th century productivity is rising again, and
signified a paradigm shift from an the sector remains committed to
economy weighted towards goods- innovation. Companies in newer
producing organizations and talent, branches of manufacturing, such
to rampant growth in the services as green manufacturing and solar
sector and development of the energy, are especially optimistic
“knowledge-based economy.” about their prospects, even though
With this new focus, the landscape economists remain cautious.
of the American workforce changed
As the manufacturing sector looks
drastically, yielding significant
ahead towards recovery (and leads
challenges for the manufacturing
the global economy in doing so),
industry.
companies must determine how
Despite this shift in the labor market they can continuously practice
and the U.S. economic crisis of strategic cost improvements
the past few years, manufacturing and efficiencies to meet shifting
continues to play a critical role in our consumer demands. In doing so,
economy, and therefore our future. they will be well-positioned and
The president of the U.S.-based prepared as the influx of requests
Manufacturing Institute, Emily Stover continue to shift upward. Taking full
DeRocco, has observed that manu- advantage of the economic recovery
facturing has the highest rate of and sector rebound will require
productivity growth compared to manufacturers to employ the right
other industries and produces more workforce strategy, which starts
than $1.5 trillion in goods every year. by finding the right mix of skilled
talent and a strategic balance of
In fact, the U.S. manufacturing temporary and permanent labor.
sector is the eighth largest With this insight, organizations will
economy in the world, though be better prepared to make wise
its impact on the U.S. economy investments in labor and will be
is much larger considering the better positioned to be profitable
number of sectors that rely heavily in the long term. Additionally,
on a strong manufacturing base organizations will also make
— including finance, accounting, every effort to not repeat recent
telecommunications and wholesale history, and instead, turn the page
and retail trade. In addition to its toward a future which draws
size, the sector is also amazingly on the innovation, productivity
resilient. Despite being one of the and efficiency upon which it was
hardest hit industries over the past founded.
couple of years, suffering significant
layoffs and business challenges,
1 “The Facts About Modern Manufacturing.” 8th edition. The Manufacturing Institute. October 2009.
www.nam.org/~/media/0F91A0FBEA1847D087E719EAAB4D4AD8.ashx
2 “Manufacturing Outlook 2010: Cross Your Fingers: 2010 Will Be Better,” Industry Week. December
6, 2009. 3
4. Industry
challenges
go beyond
economic
instability
Over the past several years, the manufacturing
sector has faced a number of industry challenges
that have contributed to — and continue to impact
— its evolution and growth. Many of these
challenges have also impacted hiring and talent
decisions as the traditional roles and desired skill
sets of manufacturing employees have evolved.
Perhaps one of the more significant hurdles to
faster recovery in the manufacturing sector is that,
in tandem with the economic downtown, there
have been vast changes in the industry at large.
From metalworking
and textiles to
consumer packaged
goods and technology,
manufacturing is far different
from the industry it was even
a few years ago, resulting
in very different industry
expectations today than
there have been historically.
4
5. Manufacturing a new industry
As the popular saying notes, “the future is now,” Although the number of unemployed Americans
and the manufacturing industry is keenly aware today means there is a huge pool from which
it must adapt to new trends and consumer to draw, manufacturers have not been able to
demands to keep pace with global competition. find the skilled employees they need; a problem
which has serious implications for the future.
So, what exactly has changed? Another factor for consideration is that from
Examples of the changes in the manufacturing 2007 to 2009, although companies cut payrolls,
sector include the “green revolution,” which has they still managed to produce more with fewer
moved organizations to replace older products workers. Economists report that as a result,
with more sustainable ones, work on alternative employees have been stretched, calling on
energy solutions, and the creation of new leaders to look carefully at labor costs, find new
building materials and designs. markets and develop new ways of operating
if they are to remain competitive.
Similarly, the rapid growth and increasing
popularity of eCommerce has resulted in the Additionally, manufacturers must now deal
evolution of a number of manufacturers who with two vital issues on a day-to-day basis:
now find themselves forced to play a dual role of the cost of safety and workforce eligibility.
manufacturer-distributor — changing not only the As most manufacturing takes place in an
dynamics of the supply chain but also business industrial setting, it is particularly important that
strategy and workforce models. This customer- a structured safety program is in place and
facing role of distribution brings with it different employers truly understand the costs that can
business challenges and requires many different result from not maintaining a safe workplace.
skill sets in terms of successful talent. Successful They must also recognize the need to have a
manufacturers today are learning how to deliver structured program to ensure compliance.
both products and services — very different from In addition, workforce eligibility has become
the historical role of the industry. a larger issue to contend with – ensuring that
While there have been pockets of growth within all employees are legally able to work in an
traditional manufacturing roles, many of these organization is now a necessity for employers.
positions have dramatically evolved and as a The discovery of ineligible workers is an
result, so have the skill sets required. Today, enormous liability for a business.
manufacturing companies are in need of a
specialized level of versatile talent. Successful
candidates must have broad-based expertise
and nimbleness with many manufacturers
falling short in finding this kind of talent,
irrespective of the labor numbers.
3 “Productivity Rebounds While Labor Costs Decline,” Manufacturing.net. November 4, 2010.
www.manufacturing.net/News/2010/11/Labor-Relations-Productivity-Rebounds-While-Labor-Costs-Decline/?menuid=724
4 Ibid. 5
6. Critical emerging trends in the manufacturing industry
Responding to changing customer For example, carbon dioxide is the most harmful
demands through new innovations. greenhouse gas we produce, but CO2 emissions
From an industry-wide perspective, two key from U.S. factories have declined, even as
customer service changes have emerged. First, industrial production has increased. The same
buyers were asking for customized solutions is not true for other industry sectors. For example,
rather than mass-produced products—a move “up to 30 percent of the energy used in a typical
towards agility-based manufacturing. Second, industrial or commercial building today is wasted,
customers want their products in hand sooner. but new, incremental improvements in green
With increased competition in the marketplace, building design and other eco-principles are
manufacturers face greater pressure to expedite fixing this fast.” Those candidates who possess
delivery. Innovations such as flexible assembly the training and skill sets to handle these
lines allow companies the option to produce complex issues and new green technologies
multiple products on a single line or facility. will be well poised for opportunity as more
This model has proven very effective throughout businesses make investments in clean energy.
the recession and most likely will be the model
on the road to recovery and beyond. Flexible workforce arrangements.
Companies are also employing various
Going green. workforce arrangements in the drive to remain
According to the National Institute of Standards competitive. Outsourcing entire functions is still
and Technology, if we are to achieve a time critical in some manufacturing operations. In
“where manufacturing has a zero net impact fact, many predict that customer relationship
on the environment…[manufacturing] will management and warranty programs will
require key resources and methods that will continue to be outsourced. However, manufac-
enable it to measure sustainability along several turers’ core competencies — and the attributes
dimensions, allowing accurate assessment of that truly differentiate them — will remain in-house.
status and progress.” Since green manufacturing
is a relatively new sub-sector, there are questions An Industry Week article recently reported that,
still to be answered. For example, is doing away “manufacturers must…have the flexibility to
with landfills an admirable goal if instead we use meet changing markets by having the ability
water and energy to clean disposable products? to quickly ramp up production at facilities in
When a manufacturer (or architect or business growing markets or suffer the costs of shipping.”
owner) talks about reducing his or her carbon As a result, contingent and blended workforces
footprint, is a 75 percent reduction enough, or have become not only more popular, but
does it have to be 90 percent to be considered also a business necessity and advantage in
laudable? Defining standards, effective measure- this industry. The ideal ratio is 20-30 percent
ments and best practices clearly remain a work temporary workers, and the remainder
in progress. permanent staff. According to experts, this allows
companies to react more quickly to economic
Despite these uncertainties, green manufacturing shifts — to ramp up or scale back based on
continues to be a priority and the need for skilled business needs — and to limit the negative
talent able to do these jobs will only increase.
5 Jim Carroll. Ibid.
6 “Sustainable and Lifecycle Information-based Manufacturing Program,” National Institute of Standards and Technology. www.nist.gov/el/msid/dpg/slim.cfm
7 The Facts about Modern Manufacturing. National Association of Manufacturers. www.nam.org/~/media/0F91A0FBEA1847D087E719EAAB4D4AD8.ashx
8 Jim Carroll. Ibid.
9 Ibid.
6 10 “Manufacturing Trends to Watch in 2007,” Ibid.
7. Manufacturing a new industry
consequences of an economic downturn. Today, staffing companies are able to place a more
sophisticated level of contingent workforce by having a greater sensibility about what’s working
and where there is need within an organization.
Staffing companies are, in fact, uniquely positioned to provide strategic management over
a process — sensitive to the need for continuous cost improvements and armed with the ability
to identify improvements along the way for greater efficiencies and savings. They can partner
with an organization to ensure that lean manufacturing is taking place and efficiencies are met.
Additionally, some staffing providers are also offering a new solution: driving increased productivity
by moving clients from an hourly cost model to a productivity-based model. In this model,
companies are not billed by the hour, but instead, by unit.
By holding the staffing provider accountable for meeting
production levels versus headcount needs, measuring productivity
is more transparent and easier to attain — increasing output
and also enabling significant cost savings.
7
9. Manufacturing a new industry
Building the next manufacturing workforce
The manufacturing industry is clearly in a state community colleges are offering hands-on
of flux, requiring a workforce of the future that courses in renewable energy. Another group,
looks very different than it does today. Attributes the National Center for Manufacturing Education,
of the ideal manufacturing worker of the future has professional development opportunities,
will undoubtedly include: highly skilled, flexible, support services, and resources for educators.
technical, adaptable and open to ongoing
Additionally, staffing companies, which employ
professional and skill growth.
a large portion of the manufacturing industry,
Training is one of the most pressing issues have also answered the call for increased
in manufacturing today. Today’s workplace training and development. Today’s top recruiting
requires people “who can operate sophisticated firms offer their candidates a variety of learning
computerized machinery, follow complex opportunities to ensure that their workers can offer
blueprints and demonstrate higher math companies the most sophisticated skills needed
proficiency than was previously required of in today’s evolving manufacturing job market.
the typical assembly line worker.” Look at any
innovative manufacturing industry segment,
such as advanced medical devices or wind Training this next generation
turbines, and the background and demo-
graphics of this worker will look very different
of workers ensures all will
from a typical line manager at a traditional be better prepared for the
manufacturing plant. manufacturing jobs of the
In response, the federal, local and state future. Similarly, today’s worker
governments, and manufacturing associations
are stepping up to provide programs that
benefits from additional training
educate new workers for advanced STEM in new, niche areas such
(science, technology, engineering, and
as green technologies —
mathematics) education. In Michigan, for
example, an educational program sponsored and those rewards tend to pay
by the Michigan Manufacturers Association off quickly. Those candidates
has the goal of teaching high school students
about the manufacturing field and provides who possess a higher pedigree
them with information about career oppor- of skill sets will be more
tunities in the industry.
attractive to potential employers
Colleges and industry associations are taking as the economy continues
responsibility for training as well. Purdue
University, for example, has an online certificate to recover.
program in Lean Six Sigma Green Belt for
manufacturing workers. The Connecticut
College of Technology has a Regional Center
for Next Generation Manufacturing that provides
resources to teachers and students interested
in learning new technologies, and some
11 “Factory Jobs Return but Employers Find Skills Shortage.” The New York Times. July 1, 2010. www.nytimes.com/2010/07/02/business/economy/02manufacturing.html
12 Manufacturing Engineering Technologies Education Clearinghouse. 9
11. Manufacturing a new industry
Manufacturing may be at a
crossroads, but it has weathered
tough times before. As the
president of The Manufacturing
Institute reminds us, “America’s
global market share of
manufacturing has held steady
at around 22 percent for 30
years.” And if we are to rely on
history, that success will continue.
As companies look to ramp
up hiring in the months and
years ahead, the smartest
manufacturing organizations
will consider and act upon
how the changes that have
taken place across the
industry impact their talent
pool and workforce planning.
This sort of forward thinking
and preparation will keep
the manufacturing industry’s
place as the cornerstone of
the American job market —
not only when discussed as
part of history, but long into
the future.