by Gary Mintchell | Jan 12, 2015 | Automation, Internet of Things, News, Operations Management, Technology, Workforce
Manufacturing output and manufacturing employment are important factors in our economy. They are also sources of endless speculation and angst.
Last week I ran across this graph from “FRED”, the St. Louis Fed. The graph combines year-over-year change in manufacturing production and employment curves.
Notice that usually employment tracks production although not varying as much as production. I also noticed that whereas most months from October 1998 to November 2010 showed growing production, employment lost every one of those months.
The blog writer from the Fed wrote, “The role of manufacturing in the U.S. economy is often discussed. As shown in the FRED graph above, as a year-over-year percent change, the level of manufacturing has generally grown. (One striking exception is during the recent recession.) The number of employees working in manufacturing is a different story, however. It has sometimes grown, but it has nearly always grown less than the growth in manufacturing. This suggests that growth in manufacturing does not equal growth in manufacturing jobs. What’s the explanation? A prime candidate is productivity growth. Another is that the sectoral mix has shifted toward industries with higher value added, such as computers and electronics.”
I think they are on the right track. Could we also add process industries (refining and chemicals fall into the manufacturing NAICS, but upstream does not)? I couldn’t find the numbers quickly, but I think those industries require fewer employees than, say, automobile and machinery manufacturing. There were huge shifts in the technology and market fundamentals in those subsectors.
What’s coming
I’ve been listening to reports from last week’s edition of the International CES (formerly Consumer Electronics Show). I draw your attention, for example to this video/podcast roundup from This Week in Tech (TWiT), a popular technology industry round table.
During the first 45 minutes or so there was a discussion of autonomous vehicles. Whereas the usual fare at the show includes TVs, mobile phones, electronic gadgets, this year’s news—even outstripping Internet of Things—was dominated by car manufacturers. This was to the extent that the Detroit Auto Show was pushed back one week so that the manufacturers could focus effort on CES.
Car designers have increasingly incorporated electronics into vehicles. First was control systems, then HVAC, then entertainment systems. Now we are seeing a rapid uptake of taking control to the next level—controlling not only the engine and transmission, but driving itself. Autonomous vehicles were front and center. And these are not only concept cars.
Let’s consider the economic impact of autonomous vehicles. There is every potential that widespread adoption of these vehicles could reduce vehicle demand. I live in a rural area where cars are pretty much a necessity for getting anywhere.
Even so, what if there were a model where I could click an app on my iPhone and summon a car to pick me up and take me down to Dayton (40 miles of rural interstate) for a meeting. On my way to the meeting, I could be preparing for the meeting. Or, perhaps just reading. Either way, I don’t have to concentrate on driving.
In my grandfather’s day, that would have been called the Trolley. There was a passenger light rail system that went from Sidney to Dayton (and through Piqua, Troy, Tipp City and Vandalia). We haven’t had that since before WWII.
Especially in cities. It could really cut down on need for cars in suburbs where cabs are infrequent and expensive. But if you don’t need a car full time, you could have an on-demand car.
If electric cars get added to this mix, many more jobs would be eliminated by eliminating engines, complex transmissions, and the like.
Yes, I can see where manufacturing production could continue to increase, but the need for employees would drop.
However, in that same time frame, we will be faced with a declining labor force. This could be something fortuitous for our grandkids.
Other CES news
Check out this article about Toyota’s hydrogen automobile.
I also wrote about this cool little gadget that gives early warning of driver fatigue.
by Gary Mintchell | Jan 2, 2015 | Automation, Internet of Things, Manufacturing IT, News, Operations Management, Organizations, Standards, Technology
Last month, the Obama administration announced another smart manufacturing initiative through a “Notice of Intent to Issue FOA.” That is a “Funding Opportunity Announcement.” This follows another initiative in which the Smart Manufacturing Leadership Coalition was awarded funds to develop several test beds.
In government-speak:
DE-FOA-0001262: Notice of Intent to Issue FOA entitled “Clean Energy Manufacturing Innovation Institute on Smart Manufacturing: Advanced Sensors, Controls, Platforms, and Modeling for Manufacturing” (DE-FOA-0001263)
The purpose of this Notice of Intent is to provide potential applicants advance notice that the Advanced Manufacturing Office (AMO), on behalf of the DOE Office of Energy Efficiency and Renewable Energy (EERE), intends to issue a Funding Opportunity Announcement (FOA) entitled “Clean Energy Manufacturing Innovation Institute on Smart Manufacturing: Advanced Sensors, Controls, Platforms, and Modeling for Manufacturing” (DE-FOA-0001263).
This Notice is issued so that interested parties are aware of the EERE’s intention to issue this FOA in the near term. All of the information contained in this Notice is subject to change. EERE may issue a FOA as described herein, may issue a FOA that is significantly different than the FOA described herein, or DOE may not issue a FOA at all.
NO APPLICATIONS WILL BE ACCEPTED THROUGH THIS NOTICE. Please do not submit questions or respond to this Notice of Intent. Prospective applicants to the FOA should begin developing partnerships, formulating ideas, and gathering data in anticipation of the issuance of this FOA. It is anticipated that this FOA will be posted to EERE eXCHANGE early in the year 2015.
FOA Documents
This announcement was accompanied by a release from the White House tying funding to enhancing US manufacturing export capability. The announcement reads:
[On December 11, 2014], at a meeting of the President’s Export Council (PEC), President Obama announced nearly $400 million to help improve the competitiveness of American businesses and workers by spurring new manufacturing innovations and giving America workers additional opportunities to improve and expand their skill sets for middleclass jobs.
To help support new advancements in manufacturing, the President will announce more than $290 million in public-private investment for two new Manufacturing Innovation Hub Competitions. The announcement fulfills the President’s 2014 State of the Union pledge to launch four new institutes this year, for a total of eight institutes launched so far, and puts the Administration past the halfway mark on the President’s original goal of creating 15 manufacturing innovation institutes supported through executive action.
In addition, the President will announce $100 million to expand apprenticeships for American workers – a proven training strategy for workers to learn the skills that employers need for American businesses to grow and thrive in a competitive global environment. Apprenticeships are also a path to the middle class – 87 percent of apprentices are employed after completing their programs and the average starting wage for apprenticeship graduates is over $50,000.
During the meeting, President Obama will also highlight the continued need to reform and simplify our tax code and the importance of opening up new markets abroad for American-made goods and services through tough, fair new trade agreements.
The PEC, chaired by Jim McNerney, President and CEO of Boeing and vice-chaired by Ursula Burns, Chairman and CEO of the Xerox Corporation, is the principal national advisory committee for exporting. The Council advises the President on government policies and programs that affect U.S. trade performance; promotes export expansion; and provides a forum for discussing and resolving trade-related problems among the business, industrial, agricultural, labor, and government sectors.
Last year, the United States exported $2.3 trillion dollars of goods and services, an all-time high, and today, exports support more than 11 million American jobs across 300,000 businesses. Manufacturing, in particular, is the engine behind our exports and innovation – contributing the majority of the nation’s exports and nearly three-quarters of its private-sector R&D. And American manufacturing is more competitive than it has been in decades, growing nearly twice as fast as the economy overall and adding 764,000 jobs since February 2010.
At the same time, businesses looking to move production to the United States consistently cite the skills of America’s workers, the most productive workforce in the world, as the reason for rooting jobs and investment here. These announcements build on that competitive strength by investing in manufacturing innovation and upgrading the skills of American workers through the proven model of apprenticeships.
Manufacturing Institutes
Manufacturing institutes serve as a regional hub, bridging the gap between applied research and product development by bringing together companies, universities and other academic and training institutions, and Federal agencies to co-invest in key technology areas that encourage investment and production in the U.S. This type of “teaching factory” provides a unique opportunity for education and training of students and workers at all levels, while providing the shared assets to help small manufacturers and other companies access the cutting-edge capabilities and equipment to design, test, and pilot new products and manufacturing processes.
Department of Energy-led Smart Manufacturing Innovation Institute
A third of the nation’s energy consumption goes into manufacturing. New smart manufacturing technologies – including advanced sensors and sophisticated process controls – can dramatically improve energy efficiency in manufacturing, saving manufacturers costs and conserving the nation’s energy.
The Department of Energy will lead a competition for a new public-private manufacturing innovation institute focused on smart manufacturing, including advanced sensors, control, platforms, and models for manufacturing. By combining manufacturing, digital, and energy efficiency expertise, technologies developed by the institute will give American manufacturers unprecedented, real-time control of energy use across factories and companies to increase productivity and save on energy costs.
For energy intensive industries – like chemical production, solar cell manufacturing, and steelmaking – these technologies can shave 10-20% off the cost of production. The new institute will receive a federal investment of $70 million that will be matched by at least $70 million in private investments and represents a critical step in the Administration’s effort to double U.S. energy efficiency by 2030.
by Gary Mintchell | Dec 23, 2014 | Data Management, Operations Management, Software
This reference is partly in my sweet spot of coverage, and it is partly beyond it pointing toward enterprise. And no, it is not predictive maintenance, by the way.
This is a post on the SAP blog about 10 Myths of Predictive Analytics. It is quite accurate about many of the “higher-end” software applications.
It’s not easy to do right. It requires insight as well as pure number crunching to obtain maximum benefit. It is iterative; that is, just like advanced process control you don’t run it once and declare it done. Maximum benefit means iterating the data and process.
It is a good read.
by Gary Mintchell | Dec 22, 2014 | Commentary, News, Workforce
Here is a “good news / bad news” report. While manufacturing business looks good right now, we have yet another fearful article about getting a new generation of engineers. For a little context, here is an article I wrote about milennials. This press release is from ThomasNet.
North America’s manufacturing sector is on an upward trajectory. However, a shortage of young talent, compounded by Baby Boomers’ negative perceptions about Millennials, could impact its continued expansion, according to ThomasNet’s latest Industry Market Barometer (IMB) research.
The annual survey of product and custom manufacturers shows continued growth for this sector. Companies are hiring, increasing production capacity, and investing for more growth to come. More than half (58 percent) grew in 2013, and 63 percent expect even more gains by the end of 2014.
Positive indicators are everywhere. Manufacturers are getting more business from their existing markets, and their average account values are rising. Nearly eight out of 10 (76 percent) are now selling overseas, and one-third expect that business to increase. In anticipation of what’s ahead, they’re investing in capital equipment, optimizing operations, upgrading their facilities, and retraining their people. More than half (52 percent) expect to add staff in the next several months, up from the 42 percent who planned to hire last year. Respondents’ companies are looking for trained, experienced people—manufacturing/production management, line workers, skilled trade workers and engineers—to keep up with current and future demand.
Troublesome Trends
A deeper look under the hood raises questions about whether the manufacturing industry can continue its current momentum. “For the industry to sustain its steady climb, all the fundamentals need to be in place, and one of them is missing—a robust pipeline of talent,” said Mark Holst-Knudsen, President of ThomasNet.
Last year’s IMB called attention to the “ticking biological clock” in manufacturing—the disruption that’s coming as Baby Boomers leave the workforce without people primed to replace them. This year’s survey depicts the “ticking” turning to an alarm. Nearly half of this year’s respondents (49 percent) are 55 and older. Moreover, thirty-eight percent plan to retire in one to ten years, and most (65 percent) lack any succession plan.
One solution is in plain sight—the Millennial generation (ages 18-32)—who can take the time to learn the business before their predecessors retire. Yet, most manufacturers (62 percent) say Millennials represent a small fraction of their workforce, and eight out of ten (81 percent) have no explicit plans to increase those numbers.
However, companies are making headway in the area of apprenticeships, which provide opportunities to bring in entry-level employees and career changers. For manufacturers where these programs are applicable, 51 percent now have them in place, and 23 percent plan to do so. They’re teaching apprentices trades such as machining, CNC milling and turning, and welding while increasing their staff.
“We need new talent everywhere—on the plant floor, in the field, and in management—and getting young people to look at manufacturing isn’t easy,” said Karen Norheim, Executive Vice President, American Crane & Equipment Corporation, Douglassville, Pa. “To ensure our company’s success, our employees have become brand ambassadors for manufacturing. We’re bringing our children to our plants, looking at new internship programs, and reaching out to local colleges and trade schools. By making a local footprint, we’re helping to address a national problem.”
Baby Boomers’ Perceptions of Millennials
This year’s data shows that the manufacturing industry increasingly aligns with Millennials’ value systems and technology expertise. The research demonstrates that Millennials have an opportunity to make a social impact working with sustainable and green technologies, solar energy, and wind power. In addition, respondents cite innovations in design and manufacturing software, automation/robotics, and 3D printing as intrinsic to today’s jobs.
But 46 percent of respondents say that a larger issue is at work – younger people still perceive manufacturing as “blue collar” work. And Baby Boomers’ perceptions of Millennials exacerbate the challenge. Forty-three percent of respondents believe that this generation lacks the work ethic and discipline to succeed.
“At a time when the American manufacturing sector is poised for a comeback, the talent shortage is the elephant-in-the-room that could impede progress. It will take the concerted effort of every manufacturer to reach across generational lines, and bring in the people who are critical to the industry’s continued success,” said ThomasNet’s President Mark Holst-Knudsen.
by Gary Mintchell | Dec 22, 2014 | Automation, News, Organizations, Process Control
Here we are at the end of 2014 and we see continuing evidence of the business trend in the industrial process control industry—consolidation.
Emerson announced Dec. 22 that it has acquired Stirling, Scotland-based Cascade Technologies Ltd., a leading manufacturer of gas analyzers and monitoring systems using Quantum Cascade Laser (QCL) technology. This innovative technology measures multiple gases simultaneously, helping companies improve industrial emissions monitoring, production efficiencies and environmental compliance.
Emerson is expanding its analytical measurement capabilities by adding this innovative laser technology to its Rosemount Analytical gas analysis portfolio. QCL technology provides a step change in gas analyzer performance through its increased sensitivity, speed of response, and fingerprinting capability. These technology advancements in the gas analysis market space provide a powerful solution for customers in various industries such as petrochemical, food and beverage, marine, automotive and pharmaceutical. Terms of the acquisition were not disclosed.
“The acquisition of Cascade Technologies is an exciting step as we further strengthen our gas analysis portfolio,” said Tom Moser, group vice president of Emerson Process Management’s measurement and analytical businesses. “Our customers depend upon Emerson to solve their toughest analytical measurement problems. We are now better positioned to serve that need.”
Dr. Iain Howieson, chief executive officer of Cascade Technologies Ltd., added, “Joining a global leader like Emerson represents an incredible opportunity for business growth. Emerson’s global presence and market leadership will have an immediate impact on the adoption of cutting edge QCL gas analyzers and monitoring systems.”
