The State of Manufacturing
Big changes reshape future skills requirements
With the Great Recession in 2008, manufacturing took a big hit. Between 2008 and 2009, the U.S. manufacturing industry’s total real output—the measurement of the value of the goods an industry produces—dropped almost 21%. In the same timeframe, about 15% of manufacturing jobs were cut.
It’s been a long struggle over the past 10 years, but there's good news for quality professionals and the workforce of the future: Manufacturing is making a comeback.
In 2017, two major factors contributed to the manufacturing industry’s boost—a weaker U.S. dollar and a stronger U.S. economy.
A weaker U.S. dollar makes it easier for companies to sell their products abroad—products are cheaper, and cheaper products mean more buyers. In 2017, the U.S. dollar was about 9% below the most-traded currencies.1
On the other hand, the U.S. economy has the lowest unemployment rate since 2009 at just 4.1% and has steadily added jobs over the past seven years.2 A thriving economy and a steady rise in jobs means people are more willing to spend their hard-earned money, thus the demand for manufactured products increases domestically.
Add these two factors together—a weaker dollar and a stronger economy—and the result is more manufacturing jobs. Last year, American factories added jobs faster than in the past three years. As of December 2017, 138,000 manufacturing jobs were added in the United States, a sharp contrast to the 34,000 jobs lost in 2016 and the meager 62,000 jobs added in 2015.3
Another good indicator of the recovery of manufacturing is the industry’s total real output. In 2009, the manufacturing sector’s real output took a dive and was the lowest it had been since 1997. Over the past three years, however, the real output has been on the rise. In the third quarter of 2017, the industry’s total real output had increased 17.7% since 2009, approaching its all-time high of 19.9% at the end of 2007.4
What about jobs in the future?
While manufacturing activity, output and jobs trended upwards last year, there is still a concern about the long-term future of manufacturing jobs in the United States. Recent years have seen a redefinition of the traditional manufacturing job role due to automation. As processes become more productive, fewer workers are required to accomplish the same amount of work.
Things like robotics, 3-D printing and artificial intelligence have cut down considerably on the number of human workers a manufacturer needs, and that has many people worried about the future of jobs.
But according to "Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation," a December 2017 report by business and economics research firm McKinsey Global Institute (MGI), all that worry might be unnecessary.
"Today there is a growing concern about whether there will be enough jobs for workers, given potential automation. History would suggest that such fears may be unfounded: Over time, labor markets adjust to changes in demand for workers from technological disruptions, although at times with depressed real wages," the report said.5
Regardless, automation will have a real impact on the job market. The report goes on to say that about one-third of employee activities in about 60% of occupations have the potential for automation.6 Over the next 10 years, millions of people will need to find new jobs or learn new skills to keep up with the changes brought about by automation.
"It is important to note, however, that even when some tasks are automated, employment in those occupations may not decline but rather workers may perform new tasks," the MGI report said. "Automation will have a lesser effect on jobs that involve managing people, applying expertise and social interactions, where machines are unable to match human performance for now."7
Perhaps the biggest threat to the manufacturing industry isn’t automation, but the lack of skilled workers. In 2015, the Manufacturing Institute and Deloitte reported that the skills gap is widening significantly.8 According to that report, "Over the next decade, nearly 3.5 million manufacturing jobs likely need to be filled and the skills gap is expected to result in 2 million of those jobs going unfilled."
The report attributes this gap to several factors, including baby boomers retiring; a lack of importance placed on science, technology, engineering and mathematics (STEM) skills; and the fact that younger generations view the manufacturing industry in a negative light.9
These last two factors—a lack of STEM skills and the negative image of manufacturing—are making it difficult for organizations to recruit younger workers to fill the gap left by retiring baby boomers. According to the Manufacturing Institute/Deloitte report, when asked about their negative image of the industry, teenagers said they thought of manufacturing jobs as dirty, dangerous and dead-end jobs that require little skill or thinking.10
But, as noted earlier, manufacturing work is drastically changing. According to the Manufacturing Institute/Deloitte report:
"With smart manufacturing or Industry 4.0, manufacturers are moving toward a new level of interconnected and intelligent manufacturing system, which incorporates the latest advances in sensors, robotics, big data, controllers, and machine learning. This allows every aspect of the plant to be constantly accessible, monitored, controlled, designed, and adapted for real-time adjustments."11
Because of these new technologies and automation, manufacturing organizations are moving away from the skill set needed for manual labor in favor of technically skilled employees.
"The sophistication of today’s (and tomorrow’s) factories places greater onus on new and existing workers to increase their skill set and to come to the table with the STEM skills necessary to operate in an advanced manufacturing facility," the report said.12
As for the sometimes-negative image of manufacturing, many manufacturers are working hard to overcome that negative stereotype by bringing awareness to what the industry is really like.
"More than 1,600 manufacturing events, with an estimated 250,000 attendees, were recently hosted as part of Manufacturing Day. The efforts’ mission is to increase positive perception of the industry and ensure ongoing prosperity of the industry, something the industry sorely needs to attract the number and level of talent required,"13 the Manufacturing Institute/Deloitte report said.
So, what does all these mean for the future of manufacturing? As mentioned, manufacturing has been and continues to grow. While the numbers aren’t drastic, production is expected to increase 2.8% this year, 2.6% in 2019 and 2% in 2020,14 and technological advancements will push the industry forward.
As automation and new technologies advance, manufacturing processes and jobs will be redefined. While this might mean some job loss, according to MGI, labor markets will adapt.
And so will employees. Workers will perform new tasks and learn new skills (such as STEM skills) to adapt to the changing technology.15 And these new skills will better prepare up-and-coming workers for the millions of manufacturing jobs that will be vacated by retiring baby boomers.
Change is inevitable. The manufacturing industry will continue to change and evolve, and so must we.
—compiled by Lindsay Dal Porto, assistant editor
- Patrick Gillespie, "Is Trump Keeping His Promises on Manufacturing?" CNNMoney, Dec. 4, 2017, https://tinyurl.com/y8xbrkfm.
- FRED Economic Data, "Manufacturing Sector: Real Output," FRED, Dec. 7, 2017, https://fred.stlouisfed.org/series/OUTMS.
- James Manyika, Susan Lund, Michael Chui, Jacques Bughin, Jonathan Woetzel, Parul Batra, Ryan Ko and Saurabh Sanghvi, "What the Future of Work Will Mean for Jobs, Skills, and Wages," McKinsey & Co., November 2017, https://tinyurl.com/y7bndwvz.
- The Manufacturing Institute and Deloitte, "The Skills Gap in U.S. Manufacturing: 2015 and Beyond," The Manufacturing Institute and Deloitte, 2015, https://tinyurl.com/y8ngptr7.
- Kimberly Amadeo, "U.S. Manufacturing: What it Is, Statistics, and Outlook," The Balance, Dec. 6, 2017, https://tinyurl.com/y7q5xy3t.
- Manyika, "What the Future of Work Will Mean for Jobs, Skills, and Wages," see reference 5.
Manufacturers: Finding Skilled Workers No. 1 Challenge for 2018
For the first time in five years, the shortage of skilled workers was cited as the No. 1 hurdle manufacturers said they anticipate in the year ahead, according to ASQ’s 2018 Manufacturing Outlook Survey.
Forty-one percent of manufacturers said finding skilled workers will be their greatest challenge in 2018, compared to 30% who said the economy will be their biggest hurdle.
In last year’s survey, 36% of manufacturers said the economy would be the greatest challenge, compared to 30% who claimed finding skilled workers would be the biggest hurdle. For more on the survey, visit https://tinyurl.com/asq-2018-out-survey.
Lean Six Sigma Conference Planned
ASQ’s Lean and Six Sigma Conference will be held Feb. 26-27 in Phoenix.
The theme of the conference is "Sustaining a Culture of Excellence in a World of Disruption, Innovation and Change."
For more information and updates on conference events, as well as announcements about keynote speakers, visit https://asq.org/conferences/six-sigma.
Five Organizations Named 2017 Baldrige RecipientsFive organizations were named recipients of the 2017 Malcolm Baldrige National Quality Award. Announced in early December, the recipients are:
- Bristol Tennessee Essential Services, Bristol, TN (small business sector).
- Stellar Solutions, Palo Alto, CA (small business sector).
- City of Fort Collins, Fort Collins, CO (nonprofit sector).
- Castle Medical Center, Kailua, HI (healthcare sector).
- Southcentral Foundation, Anchorage, AK (healthcare sector).
The 2017 awards will be presented at a ceremony during the Quest for Excellence conference in April in Baltimore.For more background on the recipients, visit https://tinyurl.com/2017-baldrige-recipients.
News You Might Need
Editor’s note: To mark the 50th anniversary of the debut of Quality Progress in January 1968, each month this year, editors will highlight a different element of the magazine throughout its history. This month, we bring back a couple brief articles included in the magazine’s news digest—originally titled "News You Might Need"—from January 1968.
Drink First—Park Later, Standardization Is Great
DETROIT—Elmer Ploof has problems by the bushel basket. He’s in charge of parking meter collections here. According to the STANDARDS INSTITUTE REPORTER, Elmer is not happy about overflowing bushel baskets of pull-rings from soft drink and beer cans sitting in the city treasury safe.
Since people found rings do nicely at the curb if nickels are scarce, woes have been mounting. Chicago reports a deluge of about 70,000 rings a month. Ideas clicking through your mind? Unless you have lots of old cans in the house, be aware that can companies intend to change rings.
Change will cost millions for these companies—not to mention the cost of removing jammed rings from parking meters once the new rings appear.
In the meantime, Elmer Ploof is open to suggestions.
Conference Adopts Atomic Second as International Unit of Time
PARIS—The 13th General Conference on Weights and Measures adopted a new international unit of time, the second, during its last meeting here. Agreeing to replace the existing definition based on the earth’s orbital motion around the sun by an "atomic definition," the Conference decided that:
"The second is the duration of 9,192,631,770 periods of radiation corresponding to the transition between the two hyperfine levels of the fundamental state of the atom of cesium 133."
Two important advantages of the atomic definition:
It can be generated by a suitable clock with sufficient precision (+/-1 part in a hundred billion or better) to meet the most exacting demands of current metrology, and
It is available to anyone who has access to or who can build an atomic clock controlled by the specified cesium radiation, and one can compare other high-precision clocks directly with such a standard in a relatively short time (an hour or so as against years with the astronomical standard).
Getting to Know …
Current position: Industrial technology advisor at the National Research Council (NRC) of the Government of Canada.
Education: Master’s degree in management and systems from the Indian Institute of Technology (IIT) in Delhi.
What was your introduction to quality? The automotive sector of Ontario introduced me to quality in the real sense. I read about quality and lean Six Sigma principles in academics, but my actions were not tangible. Working with Siemens VDO Automotive, I was able to use my academic knowledge for industrial purposes.
Is there a teacher who influenced you more than others? Why? Sushil Kumar of IIT Delhi taught us some very pragmatic system design tools to solve complex problems. That led to national recognition and a medal for me early in my career. His influence on me is slightly more than other gurus.
What noteworthy activities or achievements outside of ASQ do you participate in? I write reviews and help with publications at the Association of Professional Engineers & Geoscientists. I also network within the mining and manufacturing industries and am active with NRC’s mining sector team.
Do you have a mentor who has made a difference in your career? ASQ’s global network has provided me with mentorship opportunities that make a difference.
What’s the best career advice you’ve received? Continuously invest in your own self-development to sustain robust professional growth.
Any previous jobs you consider noteworthy? My job as a continuous improvement/Six Sigma lead at Mosaic Co.’s potash business unit/mines gave me tremendous exposure to the mining industry in North America and allowed me to lead as a Master Black Belt.
Are you active in ASQ? I volunteer for ASQ’s Edmonton and Saskatchewan sections and ASQ’s Energy and Environmental division and Mining Interest group. I also teach and mentor students and young professionals.
Any recent honors or awards? Elected to ASQ’s 2017 class of fellows.
What was the last movie you saw? Michael Moore’s "Where to Invade Next."
Personal: Married to Amita. We have two daughters: Aditi and Kriti.
What are your favorite ways to relax? Watching documentaries and listening to Indian classical music.
Quality quote: "Intangible investment in quality gives tangible returns in life."