Tag Archives: Manufacturing Investment

Paperless Manufacturing and the Skilled Worker Crunch: What You Need to Know

American Manufacturing is facing a skilled worker shortage.  Find out here what you can do to overcome the challenges and find success and profit as the industry rebounds.

By David Oeters, Corporate Communications with CIMx Software

Okay… some good news… Manufacturing in America is coming back.

 

How can MES help you overcome the Skilled Worker gap?  Image by www.colourbox.com

How can MES help you overcome the Skilled Worker gap? Image by http://www.colourbox.com

Reshoring has become an industry buzzword as overseas costs rise and companies see opportunity in America.  At the beginning of 2014, more than 200 companies had already returned to America.  They’ve found advantages to working in America, including lower energy and shipping costs, greater innovation, and protecting intellectual property.

The forecast is looking even brighter – With manufacturing production growth forecast at 3.2% in 2014 and 4% in 2015, and not all of this growth is due to Reshoring.  Currently, manufacturing output is on pace for an increase of 4.9% year over year.

Here’s the bad news… the problem is many companies are struggling to meet the market demand or capitalize on the opportunities.

Recent surveys report nine out of 10 manufacturers struggle to find skilled workers.   In a survey by the ManPowerGroup, 64% of respondents said a lack of skilled labor resulted in productivity losses, directly impacting the bottom line and profitability. In addition, the survey reported skilled labor was the hardest job to fill, with nearly 60% of the respondents reporting a lack of skilled labor impacted company growth.

While a lack of skilled labor is having a negative impact now, the impact will be worse in the future. The Boston Consulting Group (BCG), reports a potential shortfall of 875,000 skilled workers in less than a decade.

Paperless Manufacturing: A Solution to the Skilled Worker Crunch

The remedy to the skilled labor gap, according to the BCG, is aggressive recruitment and in-house training.  As older workers retire, companies must find a way to both capture their knowledge and efficiently pass it on to a new generation of workers who can assume previous responsibilities and pick up new ones as technology changes.

The key is to take action now, before the skilled worker gap grows worse.  That means reaching out to colleges and trade schools to ensure students have the experience manufacturing needs.  Industry leaders and the government need to develop programs that synchronize the future industry requirements with the classes being taught now.  Furthermore, manufacturers needs to develop in-house training programs and tools, including paperless manufacturing.  Here’s a few of the ways MES and paperless manufacturing can help overcome the skilled labor crunch:

  • By integrating competency models into the company culture. Implemented effectively, competency models will “…  help organizations: 1) find and keep the best people, 2) enable better employee performance, and 3) improve business results,” according to the St. Charles Consulting Group.  Competency models capture what people must do to effectively complete their work.  A paperless manufacturing system is an important tool in manufacturing competency models, providing a foundation for capturing knowledge and skills through a library of approved planning incorporating existing best practices.
  • Improve existing worker skills through verification and validation of all operations. Using the process enforcement features of a full-featured MES or paperless system, you can ensure employees have the correct certification before they begin work, or ensure work is completed as planned through automatic tolerance checks, validation and data collection.
  • Develop new worker training through online video training, available with all work instructions, developing skills using an effective and cost-efficient method that minimizes shop floor disruption. According to a study by the US Department of Labor, 83% of all learning is done visually, and incorporating visual work instructions and on-demand training in the shop will not only improve skill retention and worker skills, but increase productivity and quality as well.

The Benefits of MES and Paperless Manufacturing

Process Improvement graph.

Paperless Manufacturing offers benefits throughout your business. Illustration by http://www.colourbox.com

The benefits of MES and paperless manufacturing systems are clear – including automated information flows, process control and visibility, greater efficiency, consistency and precision to manufacturing, and more.  Companies that embrace MES now gain those benefits, in addition to the tools necessary to overcoming the skilled labor gap – an increasingly important benefit to manufacturers as they consider the future.

While many companies readily invest in machines and tools, few realize the importance and benefit of investing in their employees and their skills.  Manufacturing, and American manufacturing in particular, is at a point of opportunity.  Now is not the time to wait, but to invest for the future.

Want to learn more, or see how paperless manufacturing can help you?  Contact CIMx Software today to discover what we can do for you.

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Making Christmas in July Work for your Shop Floor

The strategic decisions you make in the summer downtime help maximize profits when business picks up later in the year – here’s how to make Christmas in July work for you.

By Kristin McLane, President of CIMx Software

Have you noticed organizations advertising Christmas in July?  It’s hard to think snowmen and caroling in the summer heat, but my church is bringing the Holiday Spirit to the sweltering heat of summer with a Christmas in July campaign.

This Christmas in July push isn’t celebrating the shopping crush, holiday family stress, or the joys of eating too much and passing out on the couch.  It’s about giving to organizations that normally see donations only at the end of the year.  This is the time of year (summer) many non-profits see their resources dwindle and stores deplete.

The strategic decisions you make now will deliver benefits to your manufacturing come winter and beyond.

The strategic decisions you make now will deliver benefits to your manufacturing come winter and beyond.

Christmas in July recognizes a need out of context.  The world shines a light on giving to others and being thankful at the end of year.  Everyone feels generous and donates when community messaging is praising donations and pushing us to think generously.  But, donations in July, when many non-profits have spent their holiday bounty and the need is still great in the community, often have the greatest effect. 

There is a lesson we can learn from Christmas in July.  Cyclically, many businesses see a lull in the middle of the summer.  Many even close for a week in the heat of the summer.  Summer is a great time for retooling, reordering, even installing new machines. It may also be a down time for revenues. 

For manufacturing, the lower summer revenue is similar to the challenges facing non-profits.  Although many of us may not equate the two, businesses and manufacturers are seeing the stores depleting, their core capital wane.  Many businesses enter a new strategic planning cycle, and face budget reviews in the fall.  New project work may be slowing down in the late summer, driving revenue down as well.  A lesson for savvy businesses can be learned from this… there’s opportunity in the slow summer months.

A few months ago, I introduced the concept of cyclical investment in a business from International Trend Research Group (ITR).  ITR follows the mantra that you need to invest in the down cycle in order to maximize your capacity as business picks up.  It may be the only way to launch into a higher curve once business picks up. 

This is the key lesson I see in the push to introduce Christmas in July – restock the assets of service organizations so that, when the need is greatest, they can outperform.  Likewise, prepare your business with manufacturing investments, solutions and upgrades in the downtime, or summer slowdown, so you can meet increased demand when business picks up.  Don’t leave money on the table or let profit slip through your fingers because you wasted the opportunity offered by the July slowdown!

Act now – seize opportunity for investment in July to help make December a little sweeter. 

Manufacturing Risk or Manufacturing Success: It All Depends on How You Invest

Investment is the smartest way to grow your manufacturing business, and not investing is the biggest risk in today’s fast-paced manufacturing world. 

By Kristin McLane, President of CIMx Software

I recently testified for the State of Ohio House Ways and Means committee on behalf of Governor Kasich’s 2013-14 budget.  The governor has proposed a variety of measures to help small businesses to grow their business by investing.  While some won’t be happy with his budget, I appreciate his focus on growing business in our state, which has not always been business-friendly.  I was excited to see so much interest in investing, and enjoyed meeting like-minded people working toward a better future.

Which made me think about our industry – manufacturing. I want to talk about investment in manufacturing, and why the biggest risk we can take is not investing in our future.

Investing is risk, but a bigger risk is not investing for the future.

Investing is risk, but a bigger risk is not investing for the future.

Investment is risky.  On a good day, it’s an adventure in uncertainty.  There are no guarantees.  Investing well takes foresight, research, and a willingness to accept risk. Investing means taking a big bet and hoping everything will line up just right and lead you to a future that might be better.  It’s based more on speculation than certainty, filled with “ifs” and “maybes,” and not enough “definitelies.”

Investment can be scary, but the outcome for businesses that don’t invest is even scarier.  It’s a mirror-view of what you have today, but with more problems, stagnation and eventual decline. As manufacturing processes and machines age, productivity and profits drops. New technology, new products and systems, and constantly changing customer and marketplace demands place pressure on manufacturers to adapt.  Manufacturers that can’t or won’t adapt or invest will quickly find themselves out of work and irrelevant.

Here’s another way to think about it – take a dollar out of your pocket and put it on the table.  Do nothing with it.  Next year, it will be worth far less.  It will buy less and you lose the opportunity for it to grow at all.  But, as long as your desk isn’t like mine on a Friday, you could be sure your dollar wouldn’t be lost.  If you don’t invest, in the end that’s all you have a – a single, lonely, dollar that is NOT growing your business.

It’s understandable why many are so reluctant to invest. No matter how well-organized your shop floor is, there are unseen issues every day that affect productivity, quality and profit.  Sure, the unforeseen happens even in a structured office environment, but with manufacturing failure become even more obvious. There is no hiding when parts don’t ship on time and customers are left waiting, or quality control problems show the deficiencies on your shop floor.

Maximize your return by investing early. Photo by www.colourbox.com

Maximize your return by investing early. Photo by http://www.colourbox.com

Investing is adding more variables to the shop floor equation. There is more change to manage, and more risk to mitigate.  Manufacturing is never a sure thing, and there are advantages to being risk averse.  Prospects we talk to are always worried about the risk of changing their shop floor, implementing paperless, and changing the way their operators view work instructions.  Will this change improve operations or add complexity?  I understand their worries, and I know responsible leaders will ask tough questions and consider the ROI.  I know I would.  But it is equally important to consider the reward, and the risk of doing nothing.

Manufacturers come to us with challenges and problems.  They seek manufacturing solutions.  Without investment, productivity and profitability stagnate or decline.  How much money is lost if you don’t address problems as soon as possible. How much improvement will make an investment worthwhile. Consider that hypothetical dollar on your desk – what will your business do if you don’t invest or grow.   How much money are you throwing away to quality control problems, out-of-control documentation, or process inefficiencies?  How can you mitigate the risk of a new system with the risks of your current processes?

Our goal with any project is to mitigate risk.  CIMx provides tools to our customers enabling them to limit risk when they decide to move forward in a project.  For example, our customers select, pay for and implement only the features and functionality they want.  Customers take on only the risk, cost and change they are prepared to accept.  This is why CIMx designs software that can easily be upgraded.  As technology and production change, our customers can easily adapt with free software upgrades that can be completed in as little as 30 minutes.

We walk hand-in-hand with our customers, sharing both the risks and the gains.  Our goal is to ensure we all win, and investment builds the manufacturing business.

And it is working.  One of our clients calculated cost savings when they implemented a paperless manufacturing system of over 7 ½ weeks of labor for each work order produced for the shop floor.  Considering the average salary of an engineer, that’s more than $12,000 in savings for each work order.  On an average week or month, that’s additional profit, and doesn’t even consider other benefits to paperless manufacturing.  This is savings and benefit gained after investment.

It’s time to stop thinking of investment as not only “problem-solving,” but also “business growth.” Our reluctance to move forward and embrace opportunity to meet the future is holding business back.  If you’re not willing to invest, can you expect your business to grow?