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Manufacturing—Industry Exec’s Lay the Topic Out on the Table at the CSCMP Chicago Roundtable

“For every 23,000 lawyers, there is one engineer.” The statement, shared at the Council of Supply Chain Management Professionals’ (CSCMP) Chicago Roundtable last month, alone today is staggering, given the number of organizations who worked over the past decade to improve the manufacturing economy.

That’s not to say that manufacturing has not come a long way—it has. And while the vote at CSCMP’s seminar was unanimous that yes, there is a resurgence in manufacturing coming to the U.S., in order to benefit from it and grow we must learn from lessons of our past; understand the key factors that we as an industry must address; and perhaps most important, acknowledge that this cannot be done alone.

“We’re not reinventing the wheel here,” confirmed Mary Ann Cervinka, HR Manager for Arrow Gear Co. “This existed 50 years ago,” she explained, pinpointing to the manufacturing talent shortage, an issue that the industry experienced decades ago when U.S. manufacturers first outsourced production and services to China and other global regions. “But we need to resurrect it now,” she continued, “and you have to be involved.”

And rightly so as increasingly, manufacturers weigh the question, “Should I reshore or continue to outsource?” Yes, workforce labor is just one factor but a vital one nonetheless. We’re all familiar with Deloitte’s report confirming that there are “approximately 600,000 unfilled manufacturing jobs in the U.S. because employers cannot find people with the skills they need.” Does this mean that there will be a stop to offshored jobs in the sector? No. But the statistic does point to a larger issue at hand. The U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook reports that when it comes to production occupations, “textile, apparel and furnishing workers are projected to lose 65,500 jobs by 2020 as improvements in productivity reduce the need for these workers.” Furthermore, it also reports a one percent employment decline in the manufacturing sector as “productivity gains, automation and international competition reduce the demand for labor in most manufacturing industries.”

The key word above being “automation,” there is a different manufacturing shift in action now. The “blue collar” manufacturing jobs 30 to 50 years ago are no longer the jobs of this sector today. Yes, workers are still needed to fill those jobs on the factory lines but now manufacturers require a new level of skill-sets which include networking, technology know-how and IT to meet the intricacies of the sector today.

“As manufacturing changes and becomes more complex, manufacturing companies cannot find the talent to do the work,” confirmed Dan Swinney, Executive Director of the National Manufacturing Renaissance Campaign. “There is a huge problem in the succession of ownership in manufacturing. If we are to improve manufacturing, we need to grow to scale over the next 10 years—that is the only way we’re going to improve the state of manufacturing.”

Not your typical ‘101’ class

It’s evident that a number of organizations, technical schools and universities involved in the educational growth of this sector for years continue to help teach this next generation of workers to develop them into the skilled engineers that manufacturing requires today.

“There are a lot of ongoing retirements in manufacturing facilities,” said Allen Williams, Project Development Manager of the Iowa Economic Development Authority (IEDA). “To have a manufacturing renaissance, you need to have those leaders.”

Chicago’s Center for Labor and Community Research (CLCR), founded by Swinney in 1982, together with the Chicago Federation of Labor (CFL) Workers Assistance Committee (WAC) began work in 2000 to address its manufacturing economy of Cook County. The Austin Polytechnical Academy is another example of a public high school that prepares students with the knowledge necessary today across all segments of advanced manufacturing. The National Institute for Metalworking Skills (NIMS)—formed long before the recession post 9/11—continues to set standards and credentials necessary for today.

“Credentials today are more valuable to a manufacturer than a diploma,” said Bruce Braker, Director of the Chicago Manufacturing Renaissance Council (CMRC) and Treasurer of NIMS.

Additionally, Cervinka added that “66 percent of jobs in this country don’t require a degree—they require a certificate.” Despite the confirmation by the Center for Regional Economic Competitiveness (CREC) that only about “seven percent of all manufacturing openings specifically required some type of certification” according to its 2011 report, an uptick in certification requirements is foreseeable as developments in this sector continue.

And while skill standards and credentials—such as MSSC, NCRC or NIMS certification—form the bridge between education and the workforce, many manufacturers today focus as much on the “soft” skills an employee has as much as they do on the industrial skills.

“The first thing that our partners are worried about is not the technical skills but the soft skills,” explained Bill Vogel, former President and Chief Executive Officer of DeCardy Diecasting and current Industrial Coordinator for Austin Polytechnical Academy. “’Are they going to be on time? Are they going to be professional?’” he questioned.

A manufacturing veteran, Vogel admitted that while leading DeCardy, he tried to hire high school students at the time but confirmed that now, it is a must.

“We need to have programs within our companies where high school students can learn while working but go to college and earn their degree,” he said. “It’s incumbent upon companies and manufacturers to get their employees involved in the education. Right now is the most exciting time for growth I have seen in 52 years. Manufacturing jobs are not the same any more. Yes, it is about learning how to run a machine but that’s only one part of it now. Workforce development is not a one-stop shop. The first thing to think about is the whole series of involvement with schools. The second thing is to make sure that your company is approaching it with mutual benefits. You’re doing something that is going to benefit your company—and you have to encourage that in your partners as well,” Vogel explained.

Next-gen manufacturing

As the next generation of manufacturing continues to develop, it is equally important for students to ask themselves the key questions to identify if the manufacturing segment is one that they want to be in. ‘What kind of an engineer do you want to be? How creative do you need to be? Does your employer request that you be very self-structured and proficient in existing processes? Or do they want a worker who can develop new ways of doing things in manufacturing to be more production-efficient?’

Princeton, N.J.-based Caliper Corp. is one such workplace performance service provider who helped address workplace-employee compatibility for companies over the past 50-plus years.

“If you start with who you are, what are your strengths, what are your weaknesses and what do you enjoy doing, we can than build on that to say ‘here is who you are and here are the competencies that the job requires,’” explained Herb Greenberg, Ph.D., Founder and Chief Executive Officer, Caliper Corp. “One thing that we found in all of our research is that approximately 70 percent of people currently working are what we call ‘misemployed.’ That doesn’t mean that they should be fired tomorrow. It just means that they are in jobs that are not best suited to their personality. Often, they are in jobs directly opposite to what they should be doing,” he explained.

But there is one other side to this whole workforce spectrum—manufacturers must also remember to employ our veterans.

Earlier this year, Wal-Mart Stores Inc. made headlines in announcing their initiative to hire veterans. Last November, the Walmart Foundation awarded veteran service agency Swords to Plowshares with a statewide grant to improve and increase job training programs for California veterans.

Through the U.S. Chamber of Commerce Foundation’s Hiring Our Heroes program, more than 18,400 veterans and military spouses obtained jobs through December of 2012.

Additionally, the unemployment rate declined 2.2 percent to 9.9 percent in 2012 for Gulf War-era II veterans (those who served on active duty in the U.S. Armed Forces at any time since September 2001), per Current Population Survey (CPS) data, reported the U.S. Bureau of Labor Statistics in April. The jobless rate for all veterans fell by 1.3 percentage points to 7.0 percent, the report also cited.

“An opportunity that manufacturers have right now that they never really had before is No. 1, the unemployment rate and No. 2, the huge number of veterans,” said Greenberg. “You take any manufacturing company, there probably is not a single job in that company that one veteran or another couldn’t do—obviously given training. And if there is the need to train a veteran, there is all kind of funding available to provide them the training they need to fulfill those jobs. You’ve just got to find the person with the ability. And this is something that we’re getting into a great deal.”

He further explained how Caliper previously worked with an ex-colonel and former tank driver to assess his ability and evaluate if he had the competency to fill a manufacturing or factory foreman position.

“One of the things that we say to our clients is that ‘you have to start with succession planning,”’ continued Greenberg. “We absolutely can tell you if someone would be appropriate to work on an assembly line. But the other point would be, how long would it take for that person to not be willing to work on that assembly line anymore? So as you look at succession planning, would that employee working on that assembly line be somebody who could move up five years from now to be a foreman, and possibly run the plant?”

What’s next?

While supply chain education and talent is a key factor for numerous supply chain executives to address to see this manufacturing resurgence through, it is but one of many. Stay tuned for more insights from last month’s CSCMP Chicago Roundtable 30th annual Spring seminar. Supply & Demand Chain Executive’s May Special Edition, which addresses all angles of the manufacturing topic, will go live on www.sdcexec.com May 14th.

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