Is the Manufacturing Worker Shortage Affecting Your Business? Lean Transformation Can Help.
The National Association of Manufacturers 2018 Third Quarter Manufacturers Outlook Survey is in. And the results, unsurprisingly, are mixed. Optimism registered at 93.9%– the highest year average in history. However, 73.2% of manufacturers cited the inability to find and attract a quality workforce as their top challenge.
In fact, because of this workforce crisis, manufacturers stated that:
- Nearly 30% have turned down new business
- Nearly 35% held off plans to expand
- Nearly 50% say this is the biggest threat facing their business
And the problem is expected to get worse. Deloitte and the Manufacturing Institute project a 2 million skilled worker shortage by 2025 in manufacturing.
Over the next several years, manufacturers can expect:
- To pay higher skilled worker wages
- That culture will matter – skilled employees will go to the best places to work
- To look at perks and incentives to attract and retain the best workers
With high optimism about the future but a scarce available workforce, there is no better time to look for every advantage available. Lean Transformation, when done correctly, can help. Without the need to increase staff, lean transformation can:
- Significantly reduce lead times
- Improve capacity and productivity
- Require less inventory
- Improve quality
The Benefits of Lean Transformation in Manufacturing
Much like continuous improvement, lean transformation is a methodology that can and should be applied to all areas of a manufacturing business, not just the shop floor. It is a common misconception that the purpose of lean transformation is to eliminate waste. The real purpose of lean transformation is to increase efficiency, agility and transparency across the organization. Eliminating waste is really just a natural outcome of properly implementing lean.
Lean organizations strive to align their skills, resources, processes and strategy with the wants of their customer. Organizations who implement this correctly can rapidly respond to change in order to ensure success for today and tomorrow.
According to the Lean Business Report in a survey of over 3,000 respondents, the benefits of lean are:
- Manage complexity
- More efficiency
- Better change management
- Increased visibility at the team level
- Increased productivity
- Reduced lead time
- Increased team morale
- Improved visibility for stakeholders
- Reduced costs
- Predictable delivery of customer value
Now if we align these benefits to the current and growing workforce shortage problem, we can see how lean can help manufacturers sustain success. More than ever before employers need to do everything they can to keep their best talent, attract great new hires, do more with less and free up capital for skilled worker salaries and benefits. Various surveys related to hiring and retention point to the same reasons that people love their jobs and stay.
- Great pay
- Great coworkers
- Understand that they’re human
- Opportunities to learn
- Management support
- Great training
Lean transformation can help your team feel like they have a mission, that everyone is on the same page, that they know what is going on and they are delivering great products to customers. But that is only if it is implemented correctly.
The VMEC Difference
VMEC has helped hundreds of Vermont companies achieve lean transformation with exceptional results.
- 50% Faster Lead Times
- 25% More Productivity/Capacity
- 50% Less Inventory
- 25% Improved Quality
- 50% Better Space Utilization
Our project outcomes and successes are independently verified. As a result, returns on project investments (ROI) are compounded by achieving ongoing benefits year after year.
A Client Spotlight on Lean Transformation
J.K. Adams Company, located in Dorset, Vermont, is the preeminent American manufacturer of high-quality, wooden cutting boards, entertaining and kitchen storage products, rolling pins, wine racks, and charcoal slate servers. For over 70 years, cooks and entertainers have relied on J.K. Adams to outfit their kitchens and homes with the most innovative culinary tools. Every J.K. Adams product is made in Vermont using sustainably-harvested North American hardwood. The company employs around 40 full-time workers.
J.K. Adams operates in a highly competitive market, and company leaders wanted to mature their sales and efficiency. They also wanted to improve their manufacturing processes and customer service. They embraced Lean Manufacturing knowing that employee buy-in was essential for the program to be successful. The company began fostering a culture of Continuous Improvement to prepare employees for a successful Lean implementation. Working with the Vermont Manufacturing Extension Center (VMEC) and the Northern Forest Center, company leaders developed a plan to implement several in-house, on-site projects.
VMEC conducted two “Fundamentals of Lean 101” for all J. K. Adams employees, followed by a Value Stream Mapping (VSM) project. The mapping revealed that although raw materials traveled just six hundred feet through five operations to become a finished product, employees were walking a full mile to get the job done. By moving tools around, and by making more efficient use of routers and scanners, the company managed to reduce employee walking distance by two-thirds or more.
Next, J. K. Adams made improvements to plant layout and workplace organization, implementing the principles of 5S: Sort, Set in Order, Shine, Standardize, and Sustain. As part of examining the work flow, the company realized that some machines were rarely used and could be taken off the floor, or made portable to be available when needed. By making these types of changes, J. K. Adams freed up enough space to be able to relocate the design team, which had been working in a separate building about five miles away. Now the team is located in one facility, and J. K. Adams has started applying Lean principles to its administrative side. The company reduced the need for part-time seasonal help and is using Lean to improve the efficiency of its customer service operations.
By using Lean Transformation, the J.K. Adams team has reduced:
- job routers produced and used for production by 60%
- employee walking distance by 66%
- the need for part-time seasonal help by 75%
- set up times on CNC routers by 20%
Jon Blatchford, President and CEO of J.K. Adams shares, “VMEC’s Lean 101 training program played a critical role in helping us get all of our employees on board with this strategic initiative. I am not sure we could have achieved quite so much in a relatively short period of time, without their involvement.”
VMEC can help your Vermont manufacturing enterprise or organization with Lean Transformation. To learn more, Contact VMEC Today!