Kerrie Jordan is the Group Vice President, Product Management at Epicor.
Not only is manufacturing in demand in today’s economy but it’s also been boosted by legislation over the last few years like the 2021 Infrastructure Investment and Jobs Act (IIAJ), the 2022 Inflation Reduction Act and the 2022 CHIPS and Science Act.
In 2023, a J.P. Morgan Chase analysis said that these investments “represent the largest U.S. commitment to industrial policy since the Cold War.”
The IIJA alone was expected to funnel $550 billion into critical projects like transportation, energy and broadband infrastructure, creating opportunities for manufacturing companies to produce and supply materials. As of September, more than half of the funds are still available, and these efforts are driving long-term growth in U.S. manufacturing and infrastructure.
But alongside the investments, manufacturing leaders need to invest in strategies that ensure their success today and in years to come. Here are the three key elements every manufacturing company needs to set themselves up for growth and success:
1. Create ongoing engagement initiatives.
Job creation and growth are on the rise in the manufacturing industry, with an estimated 3.8 million positions that will need to be filled between 2024 and 2033. The challenge is having enough skilled workers to fill those roles.
While that’s great news for skilled workers who have options for employment, it means that manufacturing companies have to put effort into not just attracting quality talent but retaining the talent they already have.
One of the ways to ensure that your current workers are satisfied is by increasing engagement and morale. According to my company’s “Future of Work in Manufacturing” report, only 45% of manufacturing workers rated their morale as high in 2024—a 7% drop from 2023. Additionally, 57% of manufacturing managers rated their morale as high in 2024—another 7% drop from 2023.
But the story isn’t necessarily that “high morale” is on the decline. It’s that managers believe morale in their workplace is much higher than workers say it is. This could lead to manufacturing leadership not taking action to address low morale and engagement, which may result in continued dropping morale and increased turnover.
However, managers can take action today by instituting benefits like bonuses, more paid time off or flexible work schedules, which workers say contribute to their high morale. More effective use of technology can help offset higher employee costs. Another contributor is listening to staff, gaining their feedback and taking action to make improvements based on their input.
To aid with skills development, leverage the support of training programs offered by industry associations like the National Association of Manufacturers, Society of Manufacturing Engineers or The Manufacturing Institute. Collaborating with these associations can help close skills gaps and improve employee retention.
Investing in professional development programs can also increase engagement, improve the skills of the overall workplace and attract new talent looking for companies willing to invest in their employees.
2. Modernize your processes.
Modernization, or using technology to keep up with your industry, needs to be part of every manufacturing leader’s strategy. Yet only 39% of manufacturing workers and 52% of manufacturing managers say their workplace is “very modern” compared to others in the industry.
Respondents are likely not just comparing their organization to others, but to the technology they see at use in their everyday lives. Manufacturing workers shouldn’t be stepping back in time when they go to work each day.
Manufacturing companies can use several different technologies to increase their efficiency, save costs and prepare them for the future.
Start by moving away from paper documents and to digitization so that documents, contracts and more are easier to access, store and transfer. Collect data from across your organization and manage it in a centralized platform to give you visibility into your departmental efforts and impacts. Use that data to inform your decision-making. Lastly, implement Internet of Things (IoT) devices across your factories to monitor and optimize the environment.
Automation technologies, especially those integrated with IoT and AI, can free up workers from repetitive tasks, allowing them to focus on more complex, value-added activities. Use AI to guide digital twin technology on the factory floor or to help improve forecasting to reduce supply chain disruptions.
3. Integrate technology for future readiness.
Of course, modernization requires investments in the above technologies and successfully integrating them into the organization. When it comes to technology investments, 49% of manufacturing workers and 65% of manufacturing managers said their company is investing in new technology more than ever in 2024.
The fact that more managers are aware of their company’s tech investments may simply be because they’re part of the decision-making that brings those tech investments in. However, the fact that fewer workers are aware of tech investment may be because the tech isn’t there; but it may also be that the tech is there, they’re just not aware of it—it’s a messaging challenge from the top down.
Companies that invest in technology see a 10% to 12% gain in output, utilization and productivity. Yet new technology investments and integration don’t happen overnight.
Start by evaluating your overall business goals and what type of technology will help push those goals forward. Then find the right vendor and partner who can provide the technology needed that aligns with those needs and your budget.
Make a plan for integrating that technology, which will also include training any employees on that new technology or messaging around internal adoption. Be prepared to dedicate time to that integration as well, ensuring that it meets your goals.
Finally, remember that technology integration isn’t a one-and-done process and will require continuous evaluation and investment.
Boosting Manufacturing Operations Today
Creating a modern manufacturing operation that leads the industry takes investment in people, processes and technology.
By boosting employee engagement, morale and retention; sourcing and integrating new technologies; and modernizing processes with those technologies, manufacturing leaders will find the right mix for future growth and success.
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