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Shortages of tech-savvy workers may derail manufacturing boom

Shortages of tech-savvy workers may derail manufacturing boom

Posting in Design

Manufacturing growth is the highest its been in more than a decade. The challenge is finding skilled workers to program, operate, and innovate within highly automated and IT-centric operations.

Lately, manufacturing in North America has been booming. However, the boom may be running into a roadblock. Not because of soft demand or a down economy, but because of a lack of skilled workers who can run a new generation of digitized production systems.

High technology production floors now produce a lot more than jets.

Consider this bellwether: The Association For Manufacturing Technology and AMTDA, the American Machine Tool Distributors’ Association's USMTO (United States Manufacturing Technology Orders) program. AMTDA reports that USMTO companies reported $5,508.81 million of orders in 2011, up more than 66% over 2010. “USMTO finished its strongest year in more than a decade as manufacturing led the U.S. recovery into 2012,” according to AMT President Douglas Woods. “The increase is nearly 20 points higher than forecasters predicted."

The USMTO report provides regional and national U.S. orders data of domestic and imported machine tools and related equipment. Analysis of manufacturing technology orders provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.

The problem is: can companies keep hiring and retaining enough talent to keep the boom going? A report from Deloitte and The Manufacturing Institute, issued at the end of 2011, finds talent shortages are growing more acute. "Shortages in skilled production jobs – machinists, operators, craft workers, distributors, technicians, and more – are taking their toll on manufacturers’ ability to expand operations, drive innovation, and improve productivity. Seventy-four percent of respondents indicated that workforce shortages or skills deficiencies in skilled production roles are having a significant impact on their ability to expand operations or improve productivity. Unfortunately, these jobs require the most training, and are traditionally among the hardest manufacturing jobs to find existing talent to fill."

Anecdotes abound. For example, it has just been reported how one company in Kentucky is now offering $2,500 bonuses to welders who sign on for jobs, and another in Michigan is offering a $4,000 education bonus for production workers, and another in Washington state is offering recruiting bonuses to current employees. Still, these companies are struggling to fill positions.

Deloitte and the Manufacturing Institute point out that paradoxically, while unemployment is still high, as many as 600,000 jobs are going unfilled among manufacturers. Respondents report "that the national education curriculum is not producing workers with the basic skills they need – a trend not likely to improve in the near term."  Skills in need not only include process automation, but also problem-solving abilities.

A consortium of 4,200 middle and high schools, as reported by Reuters, has developed a technology-driven curriculum to attempt to address these issues. Project Lead the Way offers hands-on courses in industrial automation, robotics and green energy.

In his latest Washington Post column, Vivek Wadhwa described the skills needed to run today's and tomorrow's manufacturing operations. At the materials level, he observes, employers are hungry for individuals with the abilities to deliver new products with the latest generation of lightweight, composite materials, requiring "innovations in material processing technologies and more highly skilled employees to manage the complex, new manufacturing processes. Prospective employees will need extensive training in order to work in this new environment.

The growth of 3D modeling and printing within manufacturing processes also calls for more highly skilled workers, Wadhwa adds. "In a new method called 'additive manufacturing,' parts are produced by melting successive layers of materials based on 3D models—adding materials rather than subtracting them. This allows manufacturers to create complex objects without any sort of tools or fixtures. The process also doesn’t produce any waste material. 3D printing is only one example of 'additive manufacturing.' This new manufacturing environment will also need legions of 3D designers and people who can operate and maintain sophisticated computer-based equipment."  Additional skills require knowledge of simulation and virtual control systems -- all part of  today's information technology-driven manufacturing plants.

In their report, Deloitte and The Manufacturing Institute urge a wide range of strategies to help address the shortages, from more science, technology and mathematics training in schools and colleges to more comprehensive career development and training programs among current employees. Strategies such as "competency modeling" -- using analytics to predict skill requirements and match them with current employees -- are still in the minority of companies, but need to move forward. "Today, only 31% of respondent-companies report having formal career development, and only 17% of the respondents report using competency model tools," the report observes.

Additional strategies include developing knowledge management systems that can capturing critical information from older or retiring workers and pass it on to newer and younger workers. This "can help reduce training time, can improve collaboration and communication, and even help companies get to market faster by leveraging previous programs," the report says. Also, consider bringing those retired employees back.

(Photo credit: US Navy, via Wikimedia.)

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure