OM in the News: Factories Demand White-Collar Education for Blue-Collar Work

An engineer creates 3-D blueprints to program machines that manufacture customer orders at a parts manufacturer

New manufacturing jobs that require more advanced skills are driving up the education level of factory workers who in past generations could get by without higher education, writes The Wall Street Journal (Dec. 10, 2019). American manufacturers are, for the first time, on track to employ more college graduates than workers with a high-school education or less, part of a shift toward automation that has increased factory output, opened the door to more women and reduced prospects for lower-skilled workers. “You used to do stuff by hand,” said a  U. of Chicago prof. “Now, we need workers who can manage the machines.”

U.S. manufacturers have added more than a million jobs since the recession.  Over the same time, they employed fewer people with at most a high-school diploma. Employment in manufacturing jobs that require the most complex problem-solving skills, such as industrial engineers, grew 10% between 2012 and 2018; jobs requiring the least declined 3%. (More than 40% of manufacturing workers have a college degree, up from 22% in 1991).

Improvements in manufacturing have made American factories more productive than ever and, despite recent job growth, require 1/3 fewer workers than the nearly 20 million employed in 1979, the industry’s labor peak. The workers that remain do much more cognitively demanding jobs. At Caterpillar, over 80% of job openings require or prefer a college degree. A majority of the company’s production jobs called for a degree or specialized skill.

At Harley-Davidson’s engine plant in Milwaukee, robotic arms now ferry motorcycle pieces, taking over the tough, repetitive work formerly done by employees. The machines have made the workplace safer, mirroring a national trend. In 2018, factory workers were hurt at half the rate as in 2003.

Classroom discussion questions:

  1. How do these changes impact productivity, as discussed in Chapter 1 of your Heizer/Render/Munson text?
  2.  How many students in your class are looking for jobs in manufacturing?

OM in the News: US Manufacturing and the Skills Shortage

Today’s Wall Street Journal (Feb.27, 2012) reports that “following 12 straight years of declines, US manufacturers added 109,000 workers to their payrolls in 2010 and another 237,000 in 2011”, with more to come in 2012.  But this vibrant sector, it turns out, is being held back–and not by imports. American manufacturers claim that 5% of their jobs remain unfilled simply because they could not find workers with the right skills. That 5% vacancy rate means an astounding 600,000 jobs are left unfilled during a period where unemployment is over 9%.

According to manufacturers, work-force shortages or skill deficiencies in production positions are keeping them from expanding operations or improving productivity. The majority of US manufacturing jobs used to involve manual tasks such as basic assembly. But today’s industrial workplace has evolved toward a technology-driven factory floor that increasingly emphasizes highly skilled workers.

“In the 1980’s,” says the president of a technical college in Kentucky, “US manufacturing was 80% brawn and 20% brains, but now its 10% brawn and 90% brains.”  This new trend in advanced manufacturing  leans heavily on computers, software, sensors, networking, and the use of emerging capabilities from the physical and biological sciences.

What’s the solution? The National Association of Manufacturers (NAM) has endorsed a Manufacturing Skills Certification System, which already has 35 states showing support and interest behind it.  It would develop credentials for advanced manufacturing in 10 areas–ranging from production and automation to distribution and logistics. Last year, the US government announced a national goal of credentialing 500,000 community college students with skill sets similar to those of the NAM initiative.

“For manufacturers to continue expansion, it’s critical that our shortage of skilled workers be addressed,” concludes the Journal.

Discussion questions:

1. Would any of your OM students consider a high-tech, high-paying factory job?

2. Why is there such a shortage of skilled workers?

OM in the News: A Shortage of Factory Workers in the US?

Would your undergrad or MBA students be interested in a manufacturing job if they knew it paid $50,000-$80,000 a year? Maybe not, but such jobs are available and often unfilled. The Wall Street Journal (May 6,2011) reports that manufacturers , despite 9% unemployment rates, are struggling to find skilled workers. Large and small manufacturers of everything from machine tools to chemicals are scouring  for potential hires and poaching each other’s employees. Some are even hiring former prisoners who learned machinists skills behind bars.

Its a confluence of 3 trends, says the Journal. First, after falling for a decade, manufacturing jobs are now growing, albeit modestly. Second, baby-boomer retirements are sapping the most experienced workers (1/4 of all factory workers are 55 or older). Third, the US educational system isn’t turning out enough people with the math and science skills needed to deal with sophisticated computer-controlled factory equipment.

“We get people coming in here all the time who say ‘I can weld’. Well, my grandmother could weld”, says the Lehigh Heavy Forge Corp  HR director in Bethlehem, PA. We need “people who understand the intricacies of $1 million lathes”. Likewise, technicians at  Houston’s Bayer AG’s plant need math/science skills for such tasks as calculating the rate at which dyes need to be added for special batches of plastics. After screening, Bayer finds that few people are qualified. Some jobs at Bayer have been open 6-9 months, laments the CEO.

Manufacturers say it’s the educational system. Only about 5% of bachelors degrees in the US are in engineering, compared to 20% in Asia. In the most recent comparison of math and science test scores of 15-year olds by the OECD, American students trailed far behind those in China, Japan,South Korea, Canada, and Germany.

Discussion questions:

1. Do your students have any interest in high paid jobs running sophisticated equipment?

2. What system does Germany use (see Ch.1) that works better to fill this demand?