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OM in the News: US Manufacturing and the Skills Shortage

February 27, 2012

Today’s Wall Street Journal (Feb.27, 2012) reports that “following 12 straight years of declines, US manufacturers added 109,000 workers to their payrolls in 2010 and another 237,000 in 2011”, with more to come in 2012.  But this vibrant sector, it turns out, is being held back–and not by imports. American manufacturers claim that 5% of their jobs remain unfilled simply because they could not find workers with the right skills. That 5% vacancy rate means an astounding 600,000 jobs are left unfilled during a period where unemployment is over 9%.

According to manufacturers, work-force shortages or skill deficiencies in production positions are keeping them from expanding operations or improving productivity. The majority of US manufacturing jobs used to involve manual tasks such as basic assembly. But today’s industrial workplace has evolved toward a technology-driven factory floor that increasingly emphasizes highly skilled workers.

“In the 1980’s,” says the president of a technical college in Kentucky, “US manufacturing was 80% brawn and 20% brains, but now its 10% brawn and 90% brains.”  This new trend in advanced manufacturing  leans heavily on computers, software, sensors, networking, and the use of emerging capabilities from the physical and biological sciences.

What’s the solution? The National Association of Manufacturers (NAM) has endorsed a Manufacturing Skills Certification System, which already has 35 states showing support and interest behind it.  It would develop credentials for advanced manufacturing in 10 areas–ranging from production and automation to distribution and logistics. Last year, the US government announced a national goal of credentialing 500,000 community college students with skill sets similar to those of the NAM initiative.

“For manufacturers to continue expansion, it’s critical that our shortage of skilled workers be addressed,” concludes the Journal.

Discussion questions:

1. Would any of your OM students consider a high-tech, high-paying factory job?

2. Why is there such a shortage of skilled workers?

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