Taking the pulse of manufacturing

NEWMA marks 10th anniversary of industry vitality index

Posted on Jan 14, 2020 :: Feature
Jessica Thiel
Posted by , Insight on Manufacturing Staff Writer

A lot can change in a decade. In 2011, when the NEW Manufacturing Alliance released its first-ever Manufacturing Vitality Index, the economy was in a much different place than it is today. Then, many companies were just beginning to emerge from the Great Recession. Today, most are going strong.

NEWMA released its 10th annual Manufacturing Vitality Index in December, and indeed, it reflected a rosy outlook among many companies. A robust 98 percent of respondents described their financial health as healthy or quite healthy. Similarly, more than 51 percent of respondents reported increased sales in 2019, and more than 60 percent expect the same in 2020, with 61 percent also anticipating adding customers.

“In 2011, the alliance wanted to understand the vitality of manufacturers in the region. Manufacturing is the largest single sector of the economy in the New North. Nearly one in four workers is employed in manufacturing, one of the highest concentrations in the country,” says Jeff Anderson, president of Precision Paper Converters and outgoing NEWMA board chair. “Little did we know that 10 years later, we would still be doing this important study.”

While the 2020 study shows an overall strong picture, one familiar issue is tempering the outlook for most manufacturers: access to talent. Mike Kawleski, public affairs manager for Georgia-Pacific and chairman of NEWMA’s communications task force, says the need touches nearly every position. While manufacturers perennially need engineers and skilled workers, they increasingly need general laborers as well, he says.

At a press conference NEWMA held in December to announce the findings, many manufacturing leaders who attended expressed concerns about employability essentials such as attendance, math, communication and soft skills.

Georgia-Pacific has 20 job titles available in Wisconsin alone, Kawleski says, and it needs to operate 24/7 to make products people need and use every day, including bath tissue, napkins and paper towels.

“How do you keep machines running every minute of the day if you don’t have people to do that? That is our challenge,” Kawleski says.

To combat the skills shortage, Georgia-Pacific is investing in automation and modernization and adding technology that can help upskill workers more quickly and seamlessly. It’s also partnering with educational institutions to offer opportunities such as co-ops, Kawleski says.

Brad Nye, vice president of operations for Ripon-based Alliance Laundry Systems, says the need for talent, in part, prompted the company’s move to purchase the Manitowoc Cranes building in Manitowoc. The company is cleaning, painting and revamping the space in hopes of employing more than 200 at the approximately 300,000-square-
foot Manitowoc facility in the next few years.

“We run about 100 team members short any given day. We have the positions. We want to fill them, but we cannot,” Nye says.

In addition to recruiting workers, Alliance has invested $85 million in capacity expansion in the last eight years. That investment will continue and includes automation and Industry 4.0 solutions that can help the company become nimbler and make decisions faster, Nye says.

When it comes to talent needs, Mark Lasky, CEO of Sadoff Iron & Metal and the newly named NEWMA board chair, says retirements are taking a toll at his company. It’s a situation that requires foresight and planning, he says.

“People’s 401(k)s are allowing some of the baby boomer generation to feel more secure in retirement, where in 2011 when this was started and people didn’t feel so secure, you saw people working longer. Now you’re seeing people say, ‘I hit my number. I can retire now,’” Lasky says.

Sadoff needs workers in nearly every role from drivers to operations to accounting to IT, but its greatest need is for general and entry-level laborers. Lasky says the company hires for soft skills and will train those who are willing to learn.

For the first time in its study, NEWMA asked respondents about their most successful recruitment tactics. Employee referrals and external job sites emerged as the top answers. That’s the case at Sadoff as well, where Lasky says the company uses sites such as Indeed as well as offering a monetary incentive for employee referrals.

In addition to the talent shortage, Lasky says Sadoff has taken a hit from tariffs. The scrap industry has been running counter cyclical to the manufacturing industry at large, he says.

“Manufacturers were growing. With the pricing (for scrap metal) going negative throughout the year, that hurt us,” Lasky says.

To balance that out, Lasky says Sadoff has increased its investment in the electronic recycling and data destruction side of its business, which is growing.

At Oshkosh Corp., Jared Petersen, director of digital technology strategy, says the company has gone all in on investing in digital manufacturing to streamline processes and help make employees’ jobs safer. Technology can improve team member experience and get employees the information they need to make better decisions.

On the safety front, some Oshkosh Corp. employees use wearable devices that alert them if they’re making at-risk movements. A pilot project showed that sending notifications to employees helped them reduce at-risk movements by 40 percent. The company also uses automated guided vehicles to make sure the right parts are available to workers at the right time.

Digital manufacturing provides cost-effective solutions that help employees work safer and smarter, Petersen says.

“Automation is good in some cases, but automation is really expensive. In a lot of cases, you automate processes, and you lose your flexibility in how you retool for new products coming in,” he says.