The Making of a World-Class Manufacturer

In the coming 10 years, the companies that prove most adept at recruiting, retaining and creating their own talent will be worlds ahead of those that do not.

What makes a world-class manufacturer? Turning the clock back 20-some years, the best answer was registering to a Standardized Quality System—those starting with letters such as ISO, QS or TS.  

Thus, a demonstrable gap was created between world-class manufacturers that could boast a system of standardized quality and average manufacturers that could not.

In the early 2000s and over the ensuing decade or so, yet another development began separating world-class manufacturers from average ones, that being the adoption by a large number of manufacturers of the concept of Continuous Improvement or Kaizen. Not that these notions, with their roots in 1950s Japan, were new, per se. Rather, it wasn’t until a little more than a decade ago that a substantial number of cutting-edge manufacturers aggressively implemented cultures of continuous improvement. With this change came a higher level of employee engagement as cross functional Kaizen teams focused attention to process improvement and waste elimination, resulting in production processes that provided increased throughput and improved quality.

Over time, companies that effectively and enthusiastically adopted the principles of Kaizen generated improved profit margins, enhanced quality and better lead times, putting themselves at a competitive advantage over those that did not. Alas, through Kaizen, world-class manufacturers had gapped the average ones once again.

The difficult question is, when we look back 10 or 15 years from now and assess what innovations separated world-class manufacturers from average ones, what will be the answer? I think I know.

Ask any manufacturer to cite the biggest challenge facing their business and virtually every answer will relate in some way to today’s dearth of skilled manufacturing talent. Thus, in the coming 10 years the companies that prove most adept at recruiting, retaining and creating their own talent will be worlds ahead of those that do not.

Recruiting and retaining talent will be, primarily, functions of compensation and culture. Setting compensation levels at or slightly above market will ensure that skilled team members don’t walk across the street for more pay. Even more important will be creating an environment that values people, respect and freedom. 

Those manufacturers that significantly gap the competition will also create their own talent.  
The National Association of Manufacturers estimates that while over the ensuing decade, almost 3.5 million manufacturing positions will be needed, a full 2 million of these may go unfilled because of the skills gap. Where will world-class manufacturers find the talent? They will create it themselves.

Complete this sentence. Seventy percent of the skilled manufacturing employees 20 years from now are ____________. The answer is “already working in manufacturing today.” That’s right. For all of our necessary and justifiable focus on generating interest in manufacturing careers among young people and encouraging them to pursue the requisite training, the majority of our team members 20 years out work for manufacturers now.

In the 1970s, the average manufacturing employee received 100 hours of skilled manufacturing training each year. Today, most receive five or less, and much of what they do receive is that which is mandated by law; hazard communication and lockout/tagout, for example. With such a radical decrease in skills-based training, is it any wonder that we have a skills gap?

Today’s cutting-edge manufacturers have already committed to providing 100 hours per year of skills-based training. Many more will follow. Imagine how much more effective your employees could be with 500 hours of training under their belts, five years from now. At that point and in terms of employee retention, productivity, efficiency, quality and more, those companies who have empowered their employees with a significantly higher level of skill will be light years ahead. Will yours be among them?