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Steps Toward Fixing Manufacturing’s Image Problem: The economic effects of the Covid-19 shutdowns and the subsequent “great resignation” have adversely impacted many different industries, including manufacturing. Nearly 29 million Baby Boomers retired in 2020, an increase of more than 3 million compared to the previous year. Unfortunately, within the manufacturing industry there’s an insufficient pipeline of replacements signing up from younger generations. To effectively mitigate this ongoing labor shortage, the industry needs to address its reputation problem from the bottom up.  Manufacturing leaders need to focus on bringing the human element back to manufacturing roles to change the experience for frontline workers. Five steps that can be taken to accomplish this are as follows:

1. Hire Employees for Their Minds, Not Just Their Hands, and Make Use of Their Knowledge – Frontline manufacturing workers are capable of more than just pushing buttons and assembling parts.  As the people closest to production every day, they’re the biggest source of knowledge and potential innovation companies have. Someone working at a factory for 15 years is the foremost expert on what happens on the factory floor, not the senior leader in the corporate corner office.

2. Give Your Team a Voice and an Identity, Supported by Senior Leaders – It’s essential that leaders encourage employee collaboration and create opportunities to facilitate communication by investing in strategies and technologies that support these initiatives at every level. Employees must be given the tools to help them identify and troubleshoot problem areas, and enable more efficient, consistent, and immediate communication across all teams on the factory floor. Increasing the use of technology is imperative to attracting and retaining talent. While technology can help give employees a voice, it is also critical to actively listen to employees’ thoughts and feedback.

3. Use Technology to Support, Not Replace, Human Talent – Rather than focusing on how to automate certain processes, managers should look to areas where they can augment an existing employee’s job function with enhanced technology. There are major human components to this industry that no robot, at least at our current level of innovation, can duplicate. Creative problem-solving skills or plant knowledge, for example, are things only the well-informed and properly-supported frontline worker can bring to the table.

4. Showcase Employee Successes and Reward Jobs Well Done – The hard work and successes of frontline employees are often unacknowledged and under appreciated. This can greatly impact company morale and employee retention as employees are made to feel unimportant or replaceable.  It is essential for senior leaders and management to praise employee successes on both one-on-one and company-wide levels.

5. Ensure Productivity Gains Trickle Down to Employee Paychecks – Productivity improvements stemming from the implementation of the above steps, should result in rewarding the people who make those changes possible: the frontline workers.

Initiating the manufacturing industry’s reputational facelift is contingent upon rethinking the frontline worker experience. Senior leaders can and should make fast work of investing in and promoting their frontline employees. This will result in a better supported and more capable workforce.

States Seek to Loosen Child Labor Laws in Response to Worker Shortage:In the past two years, lawmakers in at least 11 states have sought to loosen child labor laws to help employers fill empty jobs, even as federal officials and news investigations suggest that many minors working in manufacturing, meatpacking, and construction jobs are being exploited or hurt. The unemployment rate sits at 3.5%, a level last reached in 1969, and businesses of all types, from factories to restaurants to retail stores, are struggling to find workers. Some state legislators see teenagers as a partial solution. They argue that relaxing the rules will prompt more teens to seek out valuable work experiences and make it easier for them to supplement their families’ incomes. However, critics say the bills, backed by business groups, are an attempt to roll back critical child labor protections that are nearly a century old.

The legislation in Iowa, which has passed the Senate and moved to the House, would, for example, allow children as young as 14 to work in meat coolers and industrial laundries. In Ohio, Republican state senators last month approved a bill that would allow 14- and 15-year-olds to work until 9 p.m. during the school year. In Minnesota, a proposal would allow 16- and 17-year-olds to work on construction sites. A new Arkansas law removes a requirement that children under 16 provide proof of parental consent to work, while the Tennessee law scraps the prohibition on 16- and 17-year-olds working in restaurants that derive more than a quarter of their revenue from alcohol. Proponents of these changes argue that the goal is to try to address staffing problems and to encourage persons to enter the workforce at a younger age in order to gain valuable experience. However, others believe that the decline in teenage employment is a positive development, since it reflects the fact that more teenagers are staying in school.

According to a recent investigation by The New York Times, the state legislative push also comes amid a sharp increase in the number of unaccompanied minors arriving in the U.S. and joining the workforce, including middle schoolers working in roofing, meatpacking, and other dangerous occupations.

Late last month, the Department of Labor and the U.S. Department of Health and Human Services announced a new collaboration to combat exploitation of children in workplaces. “The Fair Labor Standards Act and its child labor protections apply in all states, and no state has the ability to limit these provisions,” U.S. Solicitor of Labor Seema Nanda said in a statement provided to Stateline. “The Department will vigorously enforce child labor protections in all states and is closely monitoring state action in this area.”

Embracing AI Skills Amidst Job Market Turbulence:Artificial intelligence (AI) is reshaping the job landscape. With the rapid pace in which AI is developing, it’s no surprise that six in ten Americans believe AI will significantly impact the labor force. According to a report published by the U.S. White House, AI has the potential to increase productivity, efficiency, and innovation. Likewise, it can potentially displace workers who need help adapting to AI tools and skill sets. Studies have revealed that the types of occupations which could be most affected by AI include mathematicians, analysts, researchers, and writers. AI alone may not take most jobs. However, people who use AI in the right way will be the ones to take them as others become unable to meet new quotas and productivity expectations.

A McKinsey survey of organizations worldwide found that almost half reskill internal resources to fill AI-related roles in addition to sourcing talent from tech companies and universities. Organizations that chose to reskill employees used various training paths, including self-paced online courses and certifications. Such an approach makes sense, considering employees know what their organization needs to succeed. AI allows employees willing to learn to boost their productivity and creative output to become valuable assets to their organization.

Of course, not all companies will retrain employees for new opportunities. Tech companies have laid off hundreds to thousands of employees since the start of 2023. And the layoffs are not over yet. Meta recently began another round of layoffs in its quest for efficiency. According to Worker Adjustment and Retraining Notification reports across the U.S., many large companies in tech and beyond are planning more layoffs.

For those seeking a job in tech, Stanford revealed that the U.S., Canada, and Spain have the highest percentage of AI job postings. Those in search of a job in tech would be wise to take the time to get their skills and knowledge up to a high level, then seriously look into a job once things start to pick up again. With the rapid developments in AI and machine learning, anyone interested in the field should stay current with the latest AI and machine learning news relevant to their industry.

The Future of the Machine Tools Industry:Aside from the massive effects of the COVID-19 pandemic, several external and internal factors are leading to declining demand in the machine tool market. The transformation of the automotive industry from internal combustion engines to electric drivetrains represents a significant challenge for the machine tool industry. While an internal combustion engine requires many highly precise metal parts, the same is not true for electric drivetrains, which have fewer tooled parts. Aside from the impact of the pandemic, this is the main reason why orders for metal cutting and forming machines have declined significantly in the past 18 months.

Besides all the economic uncertainty, the industry is in a serious disruption phase. Never before have machine tool builders experienced such a major change in their industry as the one driven by digitalization and new technologies. The trend towards greater flexibility in manufacturing drives product innovations like multitasking and additive manufacturing as suitable alternatives to traditional machine tools.

Digital innovations and emphasis on connectivity represent valuable features. Sensor integration, utilization of artificial intelligence, and the integration of sophisticated simulation features enable advancements in machine performance and overall equipment effectiveness. New sensors and new ways of communication, controlling, and monitoring enable new opportunities for smart services and new business models in the machine tool market. Digitally enhanced services are about to become part of each OEM’s portfolio. Sales propositions are clearly shifting towards digital added value. The effects of the COVID-19 pandemic may further accelerate this trend.

In the coming years, trends in the machine tool industry are likely to focus on advancements in hardware and software, especially as they pertain to automation. Within the machine tool industry, we can expect to see advancements in four key areas:

• Inclusion of smart features and networks
• Automated and IoT-ready machines
• Artificial intelligence
• CNC software advancements

Manufacturing Industry Outlook

U.S. manufacturers have now worked their way through most of their backlogged orders and that means job cuts could be on the horizon as soon as this year. Those orders, which accumulated because of supply chain disruptions in the early days of the pandemic, have helped keep the manufacturing industry insulated from the mass layoffs seen in other sectors, like technology and finance. Supply chains, which clogged up during the pandemic and were choked off again after Russia’s invasion of Ukraine, have improved considerably in the past year, and manufacturing backlogs are dwindling fast. Meanwhile, the demand for manufactured goods has fallen in recent months as consumers and businesses have pulled back on purchases in favor of experiences such as travel and dining out.

An analysis conducted by Wells Fargo economists shows that unfilled orders of core capital goods adjusted for inflation, or backlogs, are expected to return to pre-pandemic levels within the next five months. In addition, surveys from the Institute for Supply Management show that the manufacturing sector has been contracting for several months, while fewer manufacturers report an increase in backlogs. According to Shannon Seery, an economist at Wells Fargo, softer demand has allowed manufacturers to reduce their backlogs; once it runs out and demand remains subdued, companies will consider reducing their workforce.

According to the Bureau of Labor Statistics, manufacturing saw job losses in February for the first time in 21 months and there were additional manufacturing job losses in the following month. Already, 3M announced earlier this year that it is cutting 2,500 manufacturing jobs globally because of weakened consumer demand and disruptions in its operations overseas. Dow Inc. also announced thousands of layoffs at the beginning of the year. However, while manufacturing layoffs are expected, they are likely to be limited. Companies are still struggling to hire and, due to a phenomenon known as labor hoarding, they will hesitate to shed workers because of previous difficulty in attracting and retaining talent. “Given how difficult it has been to find labor and keep it, manufacturing companies are going to do everything they can to try to avoid layoffs,” said Joshua Shapiro, chief U.S. economist at forecasting firm Maria Fiorini Ramirez. “But I think they can only do that for so long, so they will eventually have to bite the bullet and start laying people off.”