Program aims to boost manufacturing productivity
Targeting small and midsize manufacturers, three Wisconsin business organizations have launched an initiative to boost productivity in factories across the state.
Wisconsin Economic Development Corp., Milwaukee 7 and Wisconsin Manufacturing Extension Partnership say the new program, called the Transformational Productivity Initiative, will identify factors that limit productivity growth and then work with companies to solve those problems.
The WEDC has awarded Milwaukee 7 a $190,000 matching grant to implement the program, and between five and 10 companies are being sought for a two-year trial period.
The initiative comes as the average growth rate of productivity in the United States in recent years has fallen to 1.7%, well below the long-term average of 3.2%, according to the WEDC.
“In 2016 we did not see a visible turnaround in the dismal productivity performance of the global economy of the past four years,” Bart van Ark, chief economist of The Conference Board, which tracks economic data, said in a statement.
The Wisconsin business groups say they aim to develop a userfriendly set of diagnostic and assessment tools for productivity issues.
The tools will come from teams representing select manufacturers, Wisconsin Manufacturing Extension Partnership and University of Wisconsin programs in Milwaukee, Stout and Madison.
“It’s a different, comprehensive approach that we haven’t seen anywhere else,” said Kelly Armstrong, the project’s lead for the WEDC.
“TPI is a long-term strategy directed at moving the needle on productivity in the aggregate, working with small and midsize manufacturers in a way that will ultimately drive wage and job growth in Wisconsin,” Armstrong said.
Manufacturers account for about 19% of the state’s gross domestic product and employ more than 465,000 people, according to the WEDC.
The productivity initiative is aimed at companies with fewer than 500 employees.
“This initiative is critical if Wisconsin and the Milwaukee region are to remain globally competitive,” said Pat O’Brien, executive director of Milwaukee 7, an economic strategy group for the seven counties in southeastern Wisconsin.
In the next 30 days, companies will be chosen for the two-year trial period. They will be from various industries but must be manufacturers. Applications are being accepted through the WEDC.
“What we will do is pick between five and 10 private companies that have volunteered to go through this process, at no charge to them, to be the pilot program,” Armstrong said.
“The idea is to develop the (diagnostics) tools that can be used for small and midsize manufacturers across the state,” she added.
WEDC officials say many companies lack the time and resources to thoroughly analyze productivity issues that hinder growth and profitability.
“If you are a small or medium-size manufacturer, you are really focused on getting product out the door and increasing your volume. You don’t always have the time to step away and do that kind of indepth assessment,” Armstrong said.
Without a higher level of awareness, funding and commitment, manufacturers are lucky to stay even with their efficiency levels, said Scott Lucas, president of Racine MetalFab, a metal fabricator and prototyping company in Sturtevant.
“I think every business faces a day-to-day retraction in the amount of efficiency. If you aren’t working at it constantly, everything seems to slip back, or at least in my experience it’s hard to maintain and move forward unless you’ve got a program that is taking the whole organization dramatically forward,” Lucas said.
Even as the overall number of U.S. manufacturing jobs has fallen in recent years, and some companies have laid off hundreds of people, others say they’re having difficulty filling staff openings.
Productivity will become increasingly important in filling the “body gap” in hiring, said Tim Wiora, executive director and CEO of Wisconsin Manufacturing Extension Partnership, which provides training programs for manufacturers.
“This initiative will strengthen our capabilities, expand our partner network and provide a broader, more comprehensive community of resources to Wisconsin manufacturers,” Wiora said.