The past three years have been constant change from COVID, to worker shortages, technology advances, and now the war in eastern Europe. The pace of change continues to accelerate as the importance of regrowing our manufacturing sector is not only recognized as economically smart but also for the sustainability of our culture through national security.
Challenges and conflicts typically reveal underlying weaknesses in systems that have been left unattended for the sake of convenience or cost. The world is a closed system and if any resource is overused without repairing, regrowing, reenergizing, replacing or renewing it, then it will hit harder — whether it is our national policies for manufacturing, defense, energy or healthcare.
If it wasn’t already, it is now abundantly clear that the US and democratic nations need to get back to making more of their own stuff. Not to rid ourselves of world trade and the benefits, but for the sake of a more diverse supply base and increased agility — even at the expense of higher costs.
No business wants to be fully dependent on a single source of supply, neither the US should be significantly dependent on another county’s supply for critical goods, production, energy and medications. The wise tradeoff is a little higher cost now in exchange for stability and risk-avoidance of disastrous increases and availability in the future.
While we have been moving toward reinvigorating US manufacturing for the past 10-plus years, the last two should have given us plenty of reason to step up the progress. Computer chips, energy, food, clothes, anything critical to sustaining an economy, needs to be produced in the US — not all of it, but enough to avoid being dependent.
When listening to the news, I was particularly struck but the juxtaposition between the war’s impact on Ukrainian lives and the impact on gas prices for Americans. Seriously, are we comparing a bump in our pocketbook to loss of human life and liberty?
I was heartened to learn that more than 70 percent of Americans supported cutting off Russian oil, even at the prospect of higher gas prices. Not only is this morally right, it’s also critically important to sustain our energy independence and nudge us toward more renewables.
Manufacturing Trends for 2022:
Accelerating the reshoring of both manufacturing production and supply chains: Risks for producing goods overseas and specifically in politically rise unfriendly countries and may sustain at higher levels for the foreseeable future. Overall, the costs of doing business globally will reflect the increased risk of transportation, timeliness, quality, and associated insurance costs potentially offsetting any labor cost gains. In January, Intel Corp announced it will invest at least $20 billion in new facilities to make computer chips in the US
Moving from “safety and cleanliness” to overall wellness as a strategic metric for employers: A January 2022 Harvard Business Review article suggested “organizations will add in new measures that assess their mental, physical, and financial health.” Not just for safety, but also for attraction and retention of employees.
Continuing growth in automation and cyber security: January 2022, Security Magazine predicted “Cybersecurity insurance premiums will significantly grow in 2022 as the continuing rise in breaches and ransomware occurrences dictates.” At the same time, automation continues its rapid growth to address labor shortages, cost and quality as companies try to stay competitive.
Available talent and organizational agility are partially addressed by remote work. A 2021 article from the World Economic Forum suggests three keys to making remote work a reality. Leaders must be able to monitor the status of production, the health of the equipment, and have real-time collaboration with onsite workers who can problem solve and fix situations.
Job skills continue to focus on problem-solving ability, mechanical aptitude, and computer skills, aka high-tech jobs.
It’s satisfying to see the pundits of 10 years ago eating their words regarding the passing of manufacturing while the sector continues to grow and with renewed vigor.
Rich Wolin is the director of training for the Michigan Manufacturing Technology Center at Northwestern Michigan College.