Jean publishes a blog called the Enterprise Corner. It features articles on entrepreneurship, local industry trends, manufacturing news and periodic ‘toolbox’ articles showcasing assistance, incentives and other resources for local businesses.
Our office is seeing quite a few local companies doing well these days thanks in part to lean manufacturing. Local production companies have rebounded substantially from a few years ago due to favorable national economic trends. According to Kevin Hall with the McClatchy Washington Bureau, the overall manufacturing sector is still at best, only about three-quarters of the way back. Manufacturing represented about 21 percent of the U.S. economy in 1980. Today, it’s closer to 12 percent, and the sector employs about 12 million workers.
“The general economy fell only 4 percentage points in the recession, but manufacturing fell (almost) 20 percent,” said Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation, an industry research group. “Obviously it’s going to grow faster because it went into a deeper hole, but it’s got more to make up.”
The long slog back is also reflected in the hiring numbers. According to Hall, the sector lost more than 2 million jobs, or 15 percent of the manufacturing workforce, from December 2007 to June 2009, a period spanning the Great Recession. The job losses continued beyond the official end of the recession, and at the end of 2009 the sector had its lowest employment level since 1941. The sector has gained a little more than half a million new jobs since February 2010. That would be good in normal times. These aren’t normal times.
Hall cites that greater productivity is at least in part responsible for manufacturing’s rebound. Innovation has increased productivity gains and driven the need for a smaller very skilled workforce. It helps to explain why recovery in hiring for manufacturers has been in fits and starts and remains well below pre-recession levels.
“Manufacturers have learned to be a lot more lean, do a lot more with less,” said Chad Moutray, with the National Association of Manufacturers. “In kind of a twist, those efforts to increase productivity have made the U.S. a lot more attractive (for investment) on a global scale. Those investments in technology and innovation . . . have also helped to increase U.S. viability in terms of manufacturing.”
We have seen the importance and benefits of lean training locally. Our office has worked with Impact Washington for many years to acquaint local manufacturers with lean principles. Over 50 local companies have participated in our all day introduction to lean manufacturing - at least a dozen businesses have done gone on to implement more intensive “lean” exercises at their facilities. Every company investing in lean has realized a favorable return on investment, but it does not necessarily come easy. Typically a company can realize immediate savings but unless it takes additional steps to affect plant culture these gains are difficult to sustain.
It ultimately takes a long term commitment to realize the benefits of lean manufacturing. Streamlining initiatives are helping industry rebound across the country and a commitment to lean can keep the manufacturing sector on a competitive roll. Our Impact Washington partners are still helping local companies improve efficiency. Last year they completed lean consulting projects with Tree Top and Cub Crafters. To learn more about Impact Washington’s lean services click here.
Success with Lean starts at the top… Read our previous blog