A pair of related trends are leading economists and manufacturers to look at productivity in a new light.
A troubling shortage of workers is making it difficult for manufacturers to fill open positions, while the nation’s Gross Domestic Product growth rate is slowing due to fewer people entering the workforce.
Worker shortages are limiting manufacturers ability to grow and are leading manufacturers to focus on ways to improve the productivity of their existing workforces. Amber Laurent, market principal for Manpower Group in Wisconsin, reported that 46 percent of employers across the country are having trouble finding workers. This trend is expected to continue.
U.S. manufacturing sector productivity increased 0.5 percent over the last five years, which the U.S Bureau of Labor Statistics notes is well below the growth rate of 3.2 percent from the previous 20 years. Leading economists and academics are advocating for productivity enhancement as a means of shoring up GDP growth.
A solution to ongoing worker shortage and slowing GDP growth is to increase worker productivity, or increasing a company’s revenue per full time employee. What is needed to solve these problems aren’t just incremental improvements, but transformational ones.
A group of Wisconsin manufacturing industry stakeholders joined together to form the Transformational Productivity Initiative (TPI) to proactively work on a solution to these challenges. TPI collaborators include the Wisconsin Manufacturing Extension Partnership, the Wisconsin Economic Development Corporation, the Milwaukee 7, the University of Wisconsin-Madison, and the University of Wisconsin-Stout’s Manufacturing Outreach Center.
The resulting TPI model presumes that productivity gains of 40 percent or more are both possible and necessary for manufacturers that are committed and willing to invest the time and resources required to transform all aspects of production. Transformational productivity methods and results are based on extensive research.
“Helping manufacturers be more productive and grow is the core mission of this initiative,” WMEP Executive Director and Chief Executive Officer Tim Wiora said. “TPI is all about getting small and medium-size manufacturers productively participating and thriving in the rapidly changing industrial landscape.”
The TPI process recognizes that there are no silver bullets and improvements are required in all aspects of the business, including planning and execution; human capital management and engagement; operational and enterprise excellence; finding and exploiting a company’s niche; and the use of automation, robotics and digital technologies.
More than a dozen Wisconsin manufacturers have completed, or in the process of utilizing, the TPI process and are already reporting significant success. The upcoming2019 Manufacturing Matters! conference will feature “Improving Productivity” and “Industry 4.0/Technology” tracks that will explore several ways Wisconsin manufacturers have significantly improved productivity and thrived in this most challenging labor environment.
The “Improving Productivity” track is new to this year’s conference and will include sessions that focus on engaging and working with an existing workforce to realize productivity gains. Sessions include:
- “Improving Productivity Through Leadership Development” – As companies experience retirements and turnover, the role of first-line supervisors is becoming increasingly important as these leaders can influence employee engagement and retention and continuous improvement efforts that drive productivity.
- “Doing More with Fewer Employees” – This session highlights the efforts of two companies, J&R Machine and Racine Metal Fab, to increase their productivity and grow revenues and profits through Key Performance Indicators, improved processes and technology.
- “Transforming Softly for High Impact Results” – In this session, JARP Industries shares its journey to having highly engaged employees who are creating superior value.
The “Industry 4.0/Technology” track focuses on technological solutions, from digital design to automation that improves productivity. Sessions include:
- “Industry 4.0 – The Digital Thread” highlights two Wisconsin manufacturers, WB Manufacturing and JB Systems, and their successful efforts to digitize the value chain from the initial customer experience through production.
- “Lessons from DevOps: Mixing Development and Production” will explain how to utilize information systems that measure and drive productivity improvement.
- “Automation Assessment – Finding the Right Path for your Organization,” presented by Neff Automation, will present smart automation solutions for manufacturers and how to assess which solutions, if any, are right for your organization.
Randy Bertram, WMEP’s Director of Sustainability and Operational Excellence Services, describes the changes taking place in manufacturing and the opportunities that accompany it, “We have clearly entered a new stage of industrial production”, said Randy Bertram, the WMEP’s Director of Sustainability and Operational Excellence Services. “It is often referred to as the fourth industrial revolution, or industry 4.0. The promise is higher productivity and economic growth. Conference attendees will learn how to integrate best practices, automation and technology to realize significantly more output per employee.”