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MANUFACTURING Back at No. 1, manufacturing’s outlook appears even better

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CONTRIBUTED PHOTO
One way to get the next generation interested in careers is through the 'What's So Cool About Manufacturing' video contest that will be held again this
year by the Manufacturers Resource Center. Junior high school students produce videos of area manufacturers to gain a better understanding of a
particular industry.
CONTRIBUTED PHOTO One way to get the next generation interested in careers is through the 'What's So Cool About Manufacturing' video contest that will be held again this year by the Manufacturers Resource Center. Junior high school students produce videos of area manufacturers to gain a better understanding of a particular industry.

A logical pathway toward economic prosperity is a strong manufacturing sector. This was a major theme during the election.

It is too early for anyone to know for sure what a Trump administration will look like and what will be the early successes, but it seems the initial reaction of the manufacturing community is cautiously upbeat.

The promise of lower taxes, reduced regulations and more money for deteriorating roads and bridges should provide a spike in the economy and an increase in manufacturing job creation.

There is one thing for sure, Washington will operate much differently this year than it did last year.

Back home, manufacturing is now the largest sector of economic output in the Lehigh Valley. Manufacturing contributes 15 percent of the gross domestic product with less than 10 percent of the workforce.

“Manufacturing hasn't been our largest sector since back in the days of Bethlehem Steel,” said Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp.

United States output per manufacturing employee climbed 40 percent between 2003 and 2016, which makes America the most productive in the world, according to Oxford Economics.

In a recent study from Industry Week, nine out of 10 industry leaders are expecting their business growth to be positive, and half expect growth of 5 percent or more per year for the next five years.

To support this growth, we have seen major trends emerging that will change how manufacturers will do business.

Competition is stronger now than at any time in our history, which has caused the customer to be “king.” Clients want faster turnaround, more customization and constantly newer models, which require companies to rethink their business models.

Products are being manufactured closer to the location where the product is consumed, which is why more and more manufacturing will be produced in the U.S.

Recently, we are seeing companies with renewed investment in quality management and lean manufacturing systems. They also are investing in better forecasting and planning systems, as well as workforce and labor management systems.

Manufacturing of the future will be smart manufacturing with automation, big data and digital technologies as the cornerstone.

These digital technologies will transform nearly every aspect of future manufacturing from production processing and the operation of the factory floor to the design of all goods and the entire supply chain, resulting in superior product designs and major productive efficiencies.

These digital changes already are happening in the advanced industrial nations around the world, including the U.S., and are offsetting the past 20 years of the cheap-labor advantages of under-developed countries.

The overall advantages resulting from these efficiencies will give early adaptors to digitalization a major manufacturing advantage.

When talking with manufacturing leaders, it doesn't take long for them to bring up the difficulty in finding workers with the right skills.

This skills gap is a major drag on the growth of the manufacturing industry. During the next decade, it is reported by Deloitte, 2 million manufacturing jobs will go unfilled because of the lack of trained workers.

Manufacturers are struggling to find and keep a new generation of skilled employees to replace the multitude of retiring baby boomers, which is one of the most exhausting challenges. Although the industry is making strides by improving the image of careers in advanced manufacturing, manufacturers can help fill the void of workers by working closely with schools and in the classrooms to open students' eyes and minds to the technology-based jobs that are available that require STEM (science, technology, engineering and math) skills, teamwork and problem solving.

Manufacturing is changing faster than at any time in history, and it is critical to keep up-to-date with the changes in order to stay competitive.

Flexibility and improving manufacturing processes through lean implementation are very important to all manufacturers who must always be looking for new and innovative ideas for their business and equipment – and their present and future employees.

One always hears that “change is good,” so in the years ahead, manufacturing is in for transformative times.

Jack Pfunder is president and CEO of the Manufacturers Resource Center (www.mrcpa.org) in Hanover Township, Lehigh County, and chairman of the Manufacturing Council of the Greater Lehigh Valley Chamber of Commerce. He can be reached at jack.pfunder@mrcpa.org.

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