The Great Recession is over and the global economy is breathing a sigh of relief. Increased consumer spending is good news for the manufacturing sector, although the philosophy and overall structure of factories worldwide is shifting from one of mass production to one of lean production. This is not your father’s assembly line!
More to Make Up
At its peak in 1980, manufacturing represented 21 percent of the U.S. economy. Today, that figure is closer to 12 percent as manufacturing employs about 12 million American workers.
- The manufacturing sector lost more than two million jobs – or 15 percent of its workforce – from December 2007 through June 2009. While the general economy fell 4 percent, manufacturing plummeted by nearly 20 percent. Now that the economy is on the upswing, manufacturing is “going to grow faster because it went into a deeper hole, but it’s got more to make up,” as noted by Daniel Meckstroth, chief economist at the Manufacturing Alliance for Productivity and Innovation.
Increasingly, manufacturers are investing in technology and programs to advance lean manufacturing – boosting output with tighter head counts and smarter production.
- A successful progression to lean manufacturing requires significant changes in factory management. This includes paradigm shifts in areas including training, hiring, job performance, and possibly job and production locations.
- Lean emphasizes just-in-time response to market demands. This requires technologically advanced equipment and an unprecedented level of flexibility in processes from component prep through end-user delivery. Gone are warehouses filled with excess inventory – along with wasted time, space and physical materials.
- Lean is a customer-focused philosophy. Its benefits include improved productivity, innovation, morale, employee engagement and stock turns. Because there is less work in progress and lower inventory, more capital is freed up for timely improvements.
Today’s Manufacturing Employment Picture
Since June 2010, the U.S. manufacturing sector has gained 543,000 new jobs.
“My gut reaction is that many of these people are different than the people they might have replaced,” said Meckstroth. “Because they are so much more skilled and manufacturing is much more advanced that it used to be, it further serves to increase those productivity gains.”
This helps explain why recovery in manufacturing hiring has been irregular and remains below pre-recession levels. Manufacturers continue to seek and compete for talent – although the evolution of lean practices and techniques has heralded a new era in resource efficiency.