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2014 ended on a positive note for manufacturers, but skills shortage still big concern2014 ended on a positive note for manufacturers, but skills shortage still big concern

2014 was a very good year, according to ThomasNet's annual Industry Market Barometer survey of North American Manufacturers, which marked an upward trajectory for manufacturing, year-over-year as the economy recovers. The responding companies are growing, hiring, adding new lines of products or services, and investing for more growth to come.

Clare Goldsberry

January 28, 2015

3 Min Read
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That's the upside. The downside—when one takes a deeper look—is the concern over "whether manufacturing is sufficiently prepared to handle continued growth." One of the missing fundamentals to enable continued growth is a "pipeline of skilled workers." That is what keeps business owners up at night, worried about who's going to operate the machines, repair equipment. It's great to hear that manufacturing is coming back to the U.S., but if companies don't have the infrastructure to handle the work, it's of no value.

While the latest survey reveals plenty of positive indicators: manufacturers are getting more business from existing customers/markets, their average account values are rising, and 76% are selling overseas—last year's Industry Market Barometer (IBM) called attention to the "ticking biological clock"—the disruption that is coming as Baby Boomers retire from the workforce in accelerating numbers. In 2014, 38% of manufacturers report that they'll leave their jobs in one to 10 years, and most lack a plan to have someone fill their shoes.

That's particularly true in the case of skilled trades such as mold design and moldmaking where the aging Baby Boomer population is obvious. The all-important "tribal knowledge" held by these skilled, experienced workers who know many tricks of the trade that aren't in textbooks, will disappear and that valuable experience and knowledge gone for good.

Nearly every manufacturer advocates for apprenticeship programs, in-house training, working with high schools to get young people interested in manufacturing early on, and other recruitment tools. The IBM noted that these apprenticeship programs help bridge the intergenerational barriers in manufacturing—that gap in which young people perceive manufacturing as "blue collar" work and the Baby Boomers perceive the Millennials lack the work ethic and discipline to succeed, noted ThomasNet.

The automotive industry continues to fret over the lack of skills needed in that industry. The recent Automotive Supplier Barometer released earlier this month by the Original Equipment Suppliers Association, notes that while suppliers remain confident that they will meet customers' vehicle releases over the next 12 months, there was a shift from 70% to 56% of companies feeling "very confident" and more now feeling "somewhat confident."

A big part of that shift in feeling has to do with the lack of engineering talent (69% cite this as a problem) and skilled labor shortages (58% cite this as a problem, but that is down from 71% for the same time a year ago), which continue to be a top concern. To address these issues, companies are looking at workforce related strategies in the areas of recruitment, developing and growing intern, co-op and apprenticeship programs, employee training and development for succession planning and having a contingency workforce.

To help meet the increased production volumes and the increasing number of vehicle launches over 2015 and 2016, and to mitigate the risks associated with those activities with respect to a talent shortage, respondents are engaging in a variety of actions. Some of those include dual sourcing, additional sourcing, approving multiple sources and finding alternate suppliers that can respond quickly to ramped up production.

Adding supply chain management staff is also on the list, along with increased follow-up and better communication with suppliers; extremely close monitoring of selected suppliers to try to anticipate shortages, issues, etc.; ncreased internal purchasing and supplier development efforts to better understand the detailed issues with suppliers.

Some of these human resources issues can be helped by automation, and we're certainly seeing more of that in mold manufacturing, as the "connected factory" becomes the norm. Still, most company owners and manager say the real difference is in the people.

Mark Holst-Knudsen, president of ThomasNet, commented, "At a time when the American manufacturing sector is poised for a comeback, the talent shortage is the elephant in the room that could impede progress. It will take the concerted effort of every manufacturer to reach across generational lines and bring in the people who are critical to the industry's continued success."

About the Author

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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