Pro­gram aims to boost man­u­fac­tur­ing pro­duc­tiv­ity

Milwaukee Journal Sentinel - - BUSINESS - RICK BAR­RETT

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.

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