But challenges remain, including the vaunted skill gaps. Leo Rommel reports on how one AMT official sees everything unfolding.
Pat McGibbon sees a new age of manufacturing unfolding all around.
The vice president of Industry Intelligence & Engagement at AMT – The Association For Manufacturing Technology remembers very well how the sector was portrayed not too long ago, when operations and jobs were seemingly leaving the nation in bunches and everyone began questioning whether “Made in the U.S.A.” was a slogan of the past.
But the industry has a far sunnier future now, he says. New investment is splashing onto the shores of North America in record numbers, a movement McGibbon estimates is worth “hundreds of billions of dollars.”
Automation and innovation dominate the manufacturing landscape these days, he says. Everything is high-tech. And big data management is now more popular than ever.
Manufacturing is now looked at as the engine that’ll repower this still wobbly economy, McGibbon says, and indeed that has been the case. The U.S. Treasury Department reported last year that manufacturing has made up 26 percent of total economic growth since 2009 and has added 485,000 jobs since February 2010. Real manufacturing output, meanwhile, has grown 16 percent. Productivity has increased 15 percent. In other words, manufacturing remains one of the key factors to the nation’s economic wellbeing, and everyone knows it.
But not everyone wants to be in it. Young workers fail to see the advantages the industry has to offer. Their role models – parents, teachers, guidance counselors – are ill – informed of the high technological advances that have taken place in manufacturing facilities and plant floors countrywide. That’s why McGibbon tells Industry Today what he and his colleagues at AMT are doing to help reconstruct manufacturing’s image and get more workers in touch with the skills they’ll need tomorrow.”
MORE REINVESTING IN NORTH AMERICA
McGibbon says a bigger driver of manufacturing’s promising outlook remains the clear-cut fact that investors, both domestic and foreign, are investing far more heavily in North America nowadays than ever before. Recent economic figures support this view. According to the Bureau of Economic Analysis, manufacturing accounted for almost $900 billion in foreign direct investment in the U.S. in 2012.
“Ford has brought key component parts back from China. That manufacturing is now done here,” McGibbon says. “You can see it in European automakers which are making large footprints in the country not only in expanding current facilities but in using these facilities to make models that heretofore hadn’t been made in the United States.”
He adds, “You see it in all industries, like aerospace. Look at what Airbus is doing in the way it’s made a huge imprint on manufacturing in the southeast. These are the kinds of things that mean a lot.”
What’s driving this newfound growth in investment? Rising wages in foreign manufacturing nations, most notably China, and North America’s new status as an energy titan, McGibbon says.
“When you look at the index of unit labor cost, China has grown 300 percent,” he explains. “Now, is it cheaper per unit labor costs in China than the United States? Yes, but the U.S. has not moved a dime off of where it’s been for the last eight years, and it doesn’t look like it’s going to be moving off that dime anytime in the near future. Over time, the advantages of being in China on a unit basis begin to dissipate.”
And, when you take into account the other risks and factors associated with having a supply chain overseas – proximity to R&D, product quality, and convenience, just to name a few – the pendulum starts to swing in North America’s favor.
The nation’s abundance of natural gas is also providing cheap energy for manufacturing operations, McGibbon says. This has served as a magnet in attracting more manufacturing.
“The U.S. is moving towards a position where we are becoming much less dependent upon outside energy than any of the other major manufacturing regions,” he explains. “The fracking, the shale oil, and the wet gas that exists in this country have decades, if not centuries, of reserves relative to current consumption rates. It’s likely to make the U.S. the largest oil and gas producer in the world in the next few years.”
AUTOMATION TRIGGERING INNOVATION
Automation “has gone wild over the last 10 to 15 years,” McGibbon says.
“For our members, the ability to bring automation into their production increases the opportunity for profitability significantly,” he says. “The automation quotient for the customer is the ability to increase productivity and to make incremental efficiencies in the production process that just were not available.”
Automation, according to McGibbon, has helped AMT’s members increase their production rates, efficiency with materials, product quality, and worker safety. It has also helped reduce waste, factory lead times, and production costs while helping companies produce broader types of products without having to reconstruct production lines.
“More than that, it helps create jobs,” he says. “Automation creates jobs upstream and downstream that didn’t exist in the past at all. You’re creating new opportunities in the workforce while also creating the opportunity to think of and develop new innovative ways of producing quality products.”
BIG DATA ALL AROUND
McGibbon says officials at AMT made “a commitment to make machines as interoperable as computers and printers and card readers” at an annual meeting several years ago. That commitment has been coming into fruition ever since the development of MTConnect. MTConnect is the open-source standard for communication and interconnectivity between manufacturing equipment and devices. www.MTConnect.com.
The amount of data throughout the industry now comes in masses, he adds, and the ability to analyze it in an efficient and timely manner is becoming a key element in underpinning new waves of productivity, growth, and innovation.
“Big data is amazing, and it’s going to be a wave of the future for being competitive,” he says. “It’s going to bring competitive edge to the people who grasp it first, and we want our members to be at the top of that wave as it comes crashing into the market.”
NOT ENOUGH WORKERS
In order to capitalize on the above trends – greater investment, automation, and big data – manufacturing must have an up and coming brilliant and knowledgeable talent pipeline at its disposal to replace the retiring or soon-to-retire Baby Boomers. And according to McGibbon, it doesn’t. Hundreds of thousands of open jobs remain unfilled in manufacturing.
“One reason they’re not filled is because we can’t find enough skilled people,” McGibbon says. “And yet there are a lot of people out there looking for jobs.”
AMT, via its Smartforce initiative, is looking to change that. The initiative reinforces the proven strategy that the best way to recruit future manufacturing employees is to get them interested in manufacturing from an early age, when they’re in grade school and STEM-related skills can be learned and perfected.
“One of our major themes is helping kids understand that being a part of Smartforce isn’t menial labor,” McGibbon says. “It’s using your brain and using it to help make your company more productive and efficient.”
But McGibbon cautions mastering math and sciences skills alone may not be enough. Manufacturing ultimately requires an additional and unusual set of machinery skills as well.
“There is a different skill set you can’t get through math, reading, and writing by itself to operate the type of equipment in manufacturing,” he says. “Just like they’re offering degrees in colleges for the last 10 years on medical diagnostic technicians, we need the same type of programs for operating production equipment.”
He adds, “What we need are workers who are taught to think three-dimensionally and can program parts by adding material as well as bending or taking material away. If they can understand that and can help program them, the machines will take care of the rest, and that increases the productivity of the workers because they can operate more than one machine at a time. The workers can just program, go, program, go, program and go.”
McGibbon says AMT also helps with the skills gap dilemma by spending resources and efforts in supporting a variety of industrial organizations. Take, for instance, the National Institute for Metalworking Skills (NIMS), which sets skills standards for the industry, certifies individual skills against the standards, and accredits training programs that meet quality requirements. And Project Lead the Way, which develops hands-on, project-based science, technology, engineering and math curricula for use by elementary, middle, and high schools.
AMT’s members are also taking proactive steps, regularly working with local high schools, technical schools, and community colleges to create internships and fellowships that help recruit the workforce they’ll need in the years to come.
“This is not the kind of production floor that helped us win World War II. This is a production floor that you can practically eat your lunch food off of,” McGibbon says.
He adds, “Manufacturing is a great career, one where you learn new concepts and skills daily. There is strong potential for growth, with better pay than other professions, and all through an affordable education. It’s up to us to make that loud and clear, and that’s what we’re doing.”