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Gaps could stem manufacturing gains

Published: Friday, Nov. 22, 2013 11:49 p.m. CDT • Updated: Friday, Nov. 22, 2013 11:49 p.m. CDT

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McHENRY – The past two years have seen significant gains in U.S. manufacturing revenue and profits, but worrisome “execution gaps” could threaten future prosperity.

That was a main message brought forth during a Next Generation Manufacturing seminar this week at the Shah Center for Corporate Training in McHenry. About 20 people from area manufacturing firms, banks and government agencies attended the presentation, which was led by Illinois Manufacturing Excellence Center President David Boulay.

“As we think about manufacturing and what’s going on, there are a lot of dynamics,” Boulay said. “Let’s have a conversation about what is going on with manufacturing and what’s going on in our state and region and our competitiveness globally.”

Boulay said manufacturing in the U.S. has more than pulled back from the brink of the Great Recession.

He and others in the room, though, talked about pitfalls potentially looming for a number of reasons, including trouble recruiting qualified replacements as aging workers near retirement, operations so lean that innovation flags, and CEOs and owners still reluctant to expend significant capital because of economic volatility.

According to a summary of the 2013 Next Generation Manufacturing Study by the Manufacturing Performance Institute, six areas require focus if U.S. manufacturers are to correct a predicted gap between today’s success and tomorrow’s shortcomings.

They include customer-focused innovation; employee acquisition, development and retention; a focus on improving and creating superior processes; supply-chain management and collaboration; sustainability; and global engagement. 

Boulay said the free-market economy has doubled in size globally in the past 10 years, vastly increasing competition, but also prospects. He added that while there has been much talk about the decline of U.S. manufacturing, in fact, the nation’s productivity is enviable.

“We’re 30 percent more productive than Japan, 10 percent more than China,” he said. “Our manufacturing output is at all-time highs.”

Nationally, manufacturing ranks as the fourth-largest employer, behind health care, retail trade, and accommodations and food services. 

Locally, Boulay said, McHenry County benefits from a higher-than-average skilled workforce, while others attending said highlights include lower costs of business than on the coasts and proximity to Chicago. 

Representatives from firms and agencies including MAC Automation Concepts in Woodstock, Astro Craft of Spring Grove, MB Financial and PNC banks, Thrive Market Intelligence, the McHenry County Workforce Network and the McHenry County Economic Development Corp. discussed challenges they or their clients face.

These include high freight costs, automation without dollars remaining for adequately trained employees, inability to project costing against global crises, and regulatory uncertainties, group members said. 

MCEDC President Pam Cumpata said technological advances can greatly enhance productivity, or grind things to a halt. 

“Just because you get a new machine doesn’t necessarily mean you are going to get more through put,” Cumpata said. “Automation can give you speed – if you have someone who can fix it if it goes down.”

Dick Doyle of Astro Craft said technology also can hamper efficiencies. He talked about time wasted on everything from texting to social media, as well as increased hesitance to act on a major capital expense because information available five minutes from now could make pulling the lever appear unwise.

“People are being run by technology,” he said. “They’re not managing it. It’s managing them.”

Boulay said the final draft of the 2013 Next Generation Manufacturing Study still is undergoing editing. Those interested in more information on the study can watch for it at http://mpi-group.com. Click on “About MPI” and scroll down to “MPI Studies.”

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