US Manufacturing Industry Report: 5 Big Trends to Watch

2017 has been an exciting year for the manufacturing industry. The industry has seen some major breakthroughs and taken some surprising turns.

The US manufacturing industry now stands to be one of the major influencing forces of the year on the US economy and workforce.

5 Things You Should Know About the US Manufacturing Industry

We’ve combed the latest headlines to come up with the top 5 trends and statistics that are taking the US manufacturing industry by storm.

1. Manufacturing Employment is at a Steady Low

Manufacturing jobs in the US are currently at 12.4 million. While this number reflects an increase since 2010, when it was only 11.5 million, it shows a sharp decline since peaking in 1979 when there were 19.4 million workers in the industry. Today, the overall industry remains at its lowest since before WWII.

2. South and Midwest Regions Have Been Hit Hardest by Decline in Jobs

Areas that have traditionally relied on manufacturing in the south and midwest have been hit the hardest by the loss of jobs available. The obvious effects that the decline has had on workers may lend to the fact that four out of five Americans, are aware that jobs in the industry are down, according to Pew Research Center.

3. Jobs May Be Down, But Productivity is Up

Most Americans may realize that jobs are down, but what most don’t know is that output has grown. Pew Research Center’s report claims that while 81% of Americans realize that manufacturing employment has decreased, only 35% know that productivity has increased.

The gains have varied widely across manufacturing industry categories.

The report shows that there has been a whopping 2,600% increase in productivity in computer and electronics since 1987. However, in motor vehicles and parts, the percentage has ebbed and flowed, dropping during the recession, but now showing a 124% lead over its level of output in 1987. And, the textile sector has seen an overall decrease in productivity since 1987 of over 50%.

4. Advances in Automation Lend to Productivity Increase

How can one of the industries with the biggest losses in jobs account for its thriving rate of production? The answer, at least to a major degree, lies in the growth of automation.

Few industries aren’t at risk for being affected by the reliance on automation. Among them, first line supervisors of mechanics, installers, and repairers.

5. New Research Indicates 1 in 4 Jobs at Risk for Being Off-Shored

In addition to automation, off shoring has created yet another option for less expensive labor costs. In an effort to cut spending, many companies will turn to off shoring to meet their production needs.

25% of Americans are at risk of losing their positions to offshoring.

This may be a good deal for the companies, but it comes as a cut to the national workforce, whose manufacturing jobs have already suffered major losses.

Conclusion

If you are in the manufacturing industry, you need to know the latest stats and information. The manufacturing industry is changing in a major way. Make sure that you stay on top of the information that you need to know!

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Over the past few decades, there has been an increasing concern over manufacturing jobs in the United States.

Jobs have previously been lost to cheaper alternatives overseas. At home, people find themselves competing with technology for a place on the manufacturing line.

It seems, though, manufacturing jobs are set to come back in the coming years.

Recent trends have pointed to shifting tides in the job market, particularly in steel, rail, and energy industries. Many questions have come as well. We are here to talk about how manufacturing will resurface in the United States.

Here Are Three Questions About Manufacturing Jobs in the United States

1. What Is the Current State of Manufacturing Jobs?

The United States has seen a rise in jobs coming back to the states since 2014 – the first time we had a net increase in jobs in over 20 years.

Both reshoring and foreign direct investment have put jobs back on American soil at a steady pace. Reshoring is a term used when American companies bring jobs back home rather than overseas. Foreign direct investment is when other countries take interest in creating jobs under the stars and stripes.

Reasons for shifting the workforce include wage prices increasing overseas, the cost and efficiency of shipping, and corporate image.

In the past, companies have opted for places like China to fill their workloads. Labor demands have shifted, though, causing some companies to look elsewhere.

Making cheap products is one thing, but getting the product in the hands of the consumer is the ultimate goal. Building closer to the customer makes shipping and handling much more efficient. It also cuts costs significantly.

Additionally, Americans shop with American pride. Knowing a product is made in the United States sheds positive light on a company supporting the economy at home rather than elsewhere.

2. Which Companies Are Bringing Jobs Back to the United States?

One of the most well-recognized companies nationwide is Amazon. As one of the leaders making moves back to the states, in January 2017 they announced an initiative to create 100,000 American jobs within eighteen months.

Not just any jobs, either. The company plans to bring on full-time employees with all benefits, ranging in work from fulfillment centers to software developers.

Ford Motor Company recently shifted lanes. Instead of taking on a new plant in Mexico, the auto maker is expanding a site already on American turf. They hope to add 700 jobs to the market.

Hyundai, a South Korean brand, is right behind Ford. Actually, they are passing the native auto maker by planning to increase spending in the states by 50%. First up is $3.1 billion over the next five years.

3. What Progress Can Be Expected?

The shifts are happening, and over the years the job market will better reflect decisions being made in big companies. Reshored jobs are coming in from China, Germany, and Japan.

Automotive companies are at the front of the line knocking on America’s door again, but players in electronics are right behind. From interests to boost the economy back up, and American pride with it, all signs point home.

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Purchasing and supply chain management is a constantly growing business with new practices being introduced or abandoned with growing frequency.

Due to the nature of managing a supply chain, with all of its various moving parts, shifting ideologies have been the primary force behind new trends in the industry.

Here are five major ones any quality supply chain manager should start paying attention to.

1. Vested Outsourcing

So much of supply management involves working with a number of different companies each with their own goals, bottom lines, customer bases, etc. The idea behind vested outsourcing is to form a more permanent bond between these disparate companies.

Now that doesn’t mean there has to be a merger. Simply share common goals with each other in order to establish a sense of comradery. If companies have a tangible sense of helping each other succeed, they are more likely to do so.

In essence, create win-win business scenarios that all members of the supply chain can enjoy.

2. Radical Collaboration

Purchasing and supply chain management is essentially about relationships. The idea behind radical collaboration is removing the inherent boundaries that exist between companies.

Again, this doesn’t have to happen via a merger. The beauty of a supply chain is it functions via companies who are not competing with one another but working together.

By increasing transparency and being truthful about your individual company’s circumstances, you will be well on your way to forging a deeper, more productive bond with your supply chain collaborators.

3. Sustainability and Safety

Now more than ever, companies need to start paying attention to the ways in which they are impacting the environment, their employees, and their customers.

Accidents happen very publically these days, so it’s vital for every company along the supply chain to keep their equipment up to snuff.

Customers and investors are paying attention to the how companies are affecting the world around them. Make sure yours is not getting left behind.

4. Digitization of Purchasing and Supply Chain Mangement

Purchasing and supply chain management is relying more and more on analytics. The amount of data we are now able to record and process have provided companies with the tools required to reevaluate their business model.

Smart, forward thinking companies are looking to discover inefficiencies along their supply lines. Who is not taking advantage of every opportunity to maximize efficiency? Who can we afford to cut-out or replace with something more effective?

With the right data, a supply chain manager can look at the big picture using cold, hard facts in order to make decisions.

5. Developing Locally

More and more consumers are paying attention to where their products are being developed and shipped from. During the recent economic crisis, many looked to companies who outsourced their supply chain overseas to countries with a cheaper labor force.

This practice is becoming harder and harder to defend in the eyes of the ultimate consumer. If you base your supply chain locally, using home-grown companies to fuel it, you will not just build up good will in the eyes of your customers. You will start seeing more and more of their money as well.

By adopting these five trends and working with efficient, forward-looking companies, you will be able to adapt your purchasing and supply chain to fit a constantly shifting industry.