Seco Tools, LLC
The recent upswing in US manufacturing due in part to rising production costs overseas, higher shipping costs and more companies interested in reshoring has been great for our industry and the nation’s economy. With such growth, however, comes a set of challenges that we, as an industry, must tackle together to continue to increase domestic demand and successfully shape the future of manufacturing in this country.
The most significant hurdles are closing the skills gap and stabilizing the new workforce. While much has been and continues to be done to deepen the pool of manufacturing talent—from shops collaborating with local technical colleges on curriculum to the government supporting statewide apprenticeship programs—we are still going to feel the labor sting for quite some time.
I anticipate the skills gap widening even further over the next five years, as baby boomers continue to retire with an insufficient amount of talent to fill their shoes. This is evidenced by the fact that several companies are willing to pay above average wages for skilled workers and still cannot find the right people. Also, because boomers are taking years of embedded knowledge with them, it becomes difficult to train the new workforce fast enough to meet industry demand. When trying to build a new workforce, it can sometimes take more than 90 days to recruit employees in the R&D and engineering fields, and 70 days for skilled production workers.
All of these factors stretch a company’s existing workforce thin, making it extremely difficult to expand business, increase productivity and turn a higher profit.
The economic impact of this situation is significant, according to a recent report on the skills gap published by Deloitte Consulting and The Manufacturing Institute. That report references a study that estimates an average US manufacturing company is potentially losing 11% of its annual earnings or $3000 per existing employee due to the talent shortage.
There is a silver lining. Shops big and small can surmount several of these labor challenges and come out ahead by relying more on their suppliers for engineering and other technical competencies. Many suppliers have been investing more in their people, products and processes to not only gain a competitive edge, but to also ensure the ongoing success of their customers.
Such investments have made it possible for suppliers to evolve their businesses so that it is no longer just about selling and supporting products. It is about working closely with customers to understand their processes and develop complete solutions that boost productivity and profitability.
Cutting tool suppliers, in particular, are seeing more of their customers look to them for technical competence and process optimization. This makes sense given the fact that innovation in our industry has accelerated to the point where most shops are unable to reach their full potential alone.
Major suppliers, such as Seco, are ready to fulfill higher customer expectations by offering standard and custom cutting tools that are in line with new material advancements and industry trends, as well as business-based solutions that make it easy to measure, control and manage manufacturing processes. Integrated engineering support services also exist to help shops create or refine a manufacturing process for achieving the highest possible levels of efficiency.
Furthermore, because no individual piece of metalworking equipment operates in a vacuum, industry leaders, from machine tool builders to cutting tool companies to software developers, are coming together and working closer than ever before to develop total solutions that will help US manufacturers keep pace in an ever-evolving global marketplace.
Now is the time to seize the reshoring opportunities that have, and continue to, come our way. Together, as an industry and a nation, we don’t have to face this challenge alone. If we continue to mitigate the skills gap and find new ways to increase productivity and cut costs without sacrificing quality, the United States can once again be the country of choice for manufacturing.
Thia article was first published in the August 2015 edition of Manufacturing Engineering magazine. Click her for PDF.
Published Date : 8/1/2015