MANUFACTURING COMEBACK & CHALLENGE

October 2, 2013
A TIME MAGAZINE headline earlier this year said it all: “How ‘Made in the USA’ is Making a Comeback.” Excerpting from that article by Rana Foroohor:

“ . . . Climbing out of the recession, the U.S. has seen its manufacturing growth outpace that of other advanced nations, with some 500,000 jobs created in the past three years. It marks the first time in more than a decade that the number of factory jobs has gone up instead of down. . . . American workers are busy making things that customers around the world want to buy — and defying the narrative of the nation’s supposedly inevitable manufacturing decline. . . .

. . . U.S. factories increasingly have access to cheap energy thanks to oil and gas from the shale boom. For companies outside the U.S., it’s the opposite: high global oil prices translate into costlier fuel for ships and planes — which means some labor savings from low-cost plants in China evaporate when the goods are shipped thousands of miles. And about those low-cost plants: workers from China to India are demanding and getting bigger paychecks, while U.S. companies have won massive concessions from unions over the past decade. Suddenly the math on outsourcing doesn’t look quite as attractive. Paul Ashworth, the North America economist for research firm Capital Economics, is willing to go a step further. ‘The offshoring boom,’ Ashworth wrote in a recent report, ‘does appear to have largely run its course.’

Today’s U.S. factories aren’t the noisy places where your grandfather knocked in four bolts a minute for eight hours a day. Dungarees and lunch pails are out; computer skills and specialized training are in, since the new made-in-America economics is centered largely on cutting-edge technologies. The trick for U.S. companies is to develop new manufacturing techniques ahead of global competitors and then use them to produce goods more efficiently on superautomated factory floors. These factories of the future have more machines and fewer workers — and those workers must be able to master the machines. Many new manufacturing jobs require at least a two-year tech degree to complement artisan skills such as welding or milling. The bar will only get higher. Some experts believe it won’t be too long before employers will expect a four-year degree — a job qualification that will eventually be required in many other places around the world too. . . .

. . . Still, if the U.S. can get this right, though, the payoff will be tremendous. Manufacturing represents a whopping 67% of private-sector R&D spending as well as 30% of the country’s productivity growth. Every $1 of manufacturing activity returns $1.48 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says Willy Shih, a Harvard Business School professor and co-author of Producing Prosperity: Why America Needs a Manufacturing Renaissance. “When you give up making products, you lose a lot of the added value.” In other words, what you make makes you. . . . “

And, a headline in THE NEW YORK TIMES a couple of years ago presented the challenge, “Factory Jobs Return, But Employers Find Skills Shortage.” This article by Motoko Rich confirms many of the issues we’ve been examining in several earlier blogs:

“ . . . manufacturers who want to expand find that hiring is not always easy. During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-paid workers and replacing them with cheaper labor abroad. . . . a number of manufacturers say that even if demand surges, they will never bring back many of the lower-skilled jobs, and that training is not yet delivering the skilled employees they need.”

After blogging about this dichotomy for some time now, we can narrow the reasons why “training is not delivering” down to two major reasons:

1) Traditional “lecture/reading” courses have failed to train at least half of our workforce. Only multi-sensory training will communicate effectively with this very sizable group.

2) Basic Skills training (Reading, Writing & Arithmetic) is as essential to two-thirds of our workforce as are the core industrial skills training subjects.

Unfortunately, many trainers and corporate executives still believe in the outdated “lecture/reading” method as the only valid learning approach within their organizations. This is a case of myopia at its worst — and, represents a total unawareness of employee learning demographics combined with the excellent results being attained through multi-sensory learning.

Many jobs are going to, once again, be available. But, America needs a much better trained workforce. Full motion video-based courseware and gaming simulations are the perfect tools necessary to marry these new job opportunities with a well-trained workforce that will be necessary for increased growth and economic success.