Growing the Economy
Increasing competitiveness with a skilled workforce.
Glenn Marshall
The President's Council on Jobs and Competitiveness has launched a new initiative focusing on the creation of jobs and making businesses more competitive. Their efforts are aimed at expanding the manufacturing base, increasing exports, and boosting research and development. Industry and the government must collectively focus on a renewed emphasis of breathing new life into the manufacturing sector and the next generation of skilled workers.
Challenges to these initiatives include a steep school dropout rate averaging 7200 students daily, or about 1.3 million a year. Nationally, about 68.8 percent of students who start high school graduate four years later and only one-third of all graduating students can perform at the twelfth-grade level.
The National Association of Manufacturers reports that 80 percent of surveyed manufacturers are experiencing a shortage of qualified workers. As large numbers of experienced workers retire, companies lose their “tribal knowledge” that new people will have to learn on their own by repeating the same mistakes as their predecessors. To revitalize the manufacturing sector, businesses will need help from the public and private sectors. First, there needs to be an emphasis on making businesses more competitive and developing the educational and training infrastructure to produce qualified individuals to fill those new opportunities. The Association for Manufacturing Excellence (AME) invites others to join in supporting the following key initiatives: consortiums, reshoring, public education, and Training Within Industry (TWI) programs, to energize the economy.
Consortiums
Consortiums can help to breathe new life into manufacturing. Harvard Business School professor Michael Porter suggests that such “clusters” affect competition in three broad ways: “First, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation, which underpins future productivity growth; and third, by stimulating the formation of new businesses, which expand and strengthen the cluster itself.”
The most prosperous companies and regions are successful because they create higher-value products and get higher prices per unit of output. “The enduring competitive advantage in the global economy lies increasingly in local things — knowledge, relationships, motivation — that distant rivals cannot match,” says Porter. Consortium members participate in resolving problems such as the lack of a trained workforce, regulations, and infrastructure for growing or having access to needed resources. Local companies, academic institutions, government agencies, labor, and learning organizations can band together to become more competitive and to reap innovation benefits.
Reshoring
After years of rapid globalization, companies are beginning to see the disadvantages of offshore production, including shipping costs, supply chain issues, and inferior quality. This trend, known as onshoring or reshoring, is gaining acceptance as a weak dollar and surging wage rates in low-labor-cost countries make it more costly to import products from overseas.
Harry Moser is the founder of the Reshoring Initiative. He is collaborating with AME to promote reshoring as part of its Rebirth of Manufacturing Jobs initiative. AME recommends companies use a Total Cost of Ownership (TCO) analysis tool to effectively compare total cost of local and offshore sources, enabling them to make informed business decisions. “We are committed to changing the sourcing paradigm from ‘off-shored is cheaper’ to ‘local reduces the total cost of ownership,’” says Moser.
Public Educational System
The public educational system needs to provide a lifelong learning environment to nurture and sustain students and workers capable of new ways of thinking and learning to quickly adopt and master new skills. The first step is addressing students’ learning needs by understanding the learning capabilities of each student and worker. Early identification of learning challenges, appropriate support services, and effective teaching methods contribute to a more fulfilled, educated, productive citizenry. Schools and colleges need to provide a relevant curriculum and teaching styles to help students learn the basics and engage them in actively participating and learning. These actions will prepare them for jobs in the next generation of advanced manufacturing.
Training Within Industry Programs
As businesses continue to participate in consortia and reshoring initiatives, more jobs will be created. The demand for skilled workers will increase as retirements of an aging workforce increase. Training Within Industry (TWI) programs were created and proved their worth during a time of crisis (World War II). Now organizations are turning to TWI again.
Using TWI methodology, companies can quickly train unskilled workers to build equipment and machinery with consistent quality. Its multiple components address skills training, respect for people, continuous improvement, and safety; but the heart of the person-to-person training is the transfer of knowledge in a minimalist format from trainer to student. Each worker, in turn, is trained make the fullest use of his best skills. These principles can be applied in today’s classrooms and workplaces, as experienced workers/teachers transfer their job knowledge to a generation of workers. To learn more about TWI, go to http://twi-institute.com/.
A Call for Action
Policymakers, industry, and academic leaders play critical roles in revitalizing the economy. They need to insure the supply of high-quality inputs such as educated citizens, physical infrastructure, and a favorable tax and regulatory framework to foster increased collaboration between public and private sector partners. Businesses need to grow a culture that achieves results through people. They need to foster rapid advancement of technology and innovation. They also need lean and green systems, attitudes, and enterprises. There is a need to develop pragmatic, working-level leaders who can pull it all together.
The educational system needs to provide a life-long learning environment. Every state, with the help of the Department of Education and Labor, will need to enact “literacy laws.” This will require each individual to be properly evaluated (including early identification of learning challenges) and then educated to be career-ready to enter the workforce or go on to college. The resulting capabilities will enable businesses to again have the workforce needed to become leading designers, producers, and exporters of goods and services.
AME has been leading initiatives aimed at expanding the manufacturing base, increasing exports, and boosting research and development. Such actions breathe new life into the Rebirth of Manufacturing Jobs, helping businesses to be more competitive and their workers to be more productive.
AME invites other public and private organizations to share best practices and lessons learned to help grow and sustain a prosperous economy, while meeting the demands for an educated and skilled workforce, at its international “Excellence Inside” Conference in Dallas, October 24-28.
Glenn Marshall is an AME director-at large. He is in supply chain quality at Newport News Shipbuilding. Contact him at glenn.marshall@hii-nns.com.
