As go the Hoosiers, so goes all manufacturing?

Nov. 9, 2017

Growing the overlap between upstart tech and traditional manufacturing. 

Part of the reason we love Indiana so much is the overlap between upstart tech companies and the traditional

manufacturing organizations that have built the Hoosier state for many years. And if new reports are any indication, that overlap is only going to be growing larger.

The recently released 2017 Indiana Manufacturing Survey reports a healthy Indiana manufacturing sector; one with lots of room for growth. There are two exciting trends playing out right now in Indiana that give us a glimpse into the direction for the manufacturing industry as a whole: a) Larger manufacturer investments in new technologies and b) Recruiting the workforce of the future

Continuing to invest in new manufacturing technology

This survey was sent to hundreds of organizations around Indiana, receiving a diverse set of responses on different topics. But one thread was consistent on the topic of winning manufacturing decisions: investment in new technologies. When asked about “their best manufacturing decisions” in the past year, the direct quotes from manufacturers spoke volumes:

  • “The purchase of additional automated machinery; doubling the rate of growth and expansion.”
  • “New state-of-the-art equipment.”
  • “New factory investment to facilitate debottlenecking of existing factories.”

These quotes aren’t unusual. In the past few years, manufacturers were asked about their modernization priorities. In 2014, Human Resource Development was far and away voted the top priority of the moment, picked first 55% of the time. Investment in Facilities, Machinery and Information Technologies lagged behind at 27%. Contrast that information with 2017, where manufacturers voted Investments in Facilities, Machinery and Information Technologies their top priority 52% of the time, whereas Human Resource Development fell to 39%. The number of manufacturers that realize the importance of new technologies in their facilities has nearly doubled in that three-year span.

The 2017 report explains that one technology, in particular, has seen growth in the past few years—data analytics.

Data analytics is increasingly important in a host of manufacturing-related areas. Of Indiana manufacturers:

  • 71% use data analytics in planning and scheduling production to some degree or a high degree.
  • 73% use data analytics in managing raw materials and finished goods inventory to some or a high degree.
  • 74% use data analytics in managing shop floor production to some or a high degree.
  • 60% use data analytics in planning and coordinating inbound and outbound supply chains to some or a high degree.

Preparing a new manufacturing workforce

According to the 2017 report, this uptick in modernization of facilities doesn’t mean that jobs will be lost. More than half of Indiana manufacturers surveyed believe that automation by new technologies will increase the number of employees that they need to remain competitive. Unfortunately, the demand for the jobs is there, but the workforce trend seems to be going in the opposite direction for Indiana and the industry as a whole.

Finding a way to train the next generation of manufacturing workers is a pressing issue here in Indiana. 87% of organizations stated that they had trouble recruiting young people into manufacturing. As college enrollment becomes more common, manufacturers are having a hard time breaking through the stigma of the blue-collar job. This was apparent when surveyed manufacturers were asked to share advice they had for young people interested in a manufacturing career:

  • “Having a blue-collar job is still honorable and can provide healthy pay and benefits for family.”
  • “Manufacturing today is not the sweatbox of yesterday. It’s more videogame than hard, manual labor.”“
  • It’s not your grandfather’s industry. This is becoming a high-tech industry with clean working environments.”

Indiana, and the manufacturing industry as a whole, will continue to face this issue as tenured workers retire. However, as the overlap between high-tech positions and manufacturing positions grows, the industry could see a resurgence in young hires.

The manufacturing industry has changed dramatically in recent years and if these trends are any indication, there’s still a lot of growth left. As Indiana becomes a state known for the technology companies headquartered here, its manufacturing industry should see a boost in finding new and interesting ways that partnership can increase production and help with workforce-related issues.

And this growing overlap is particularly increasingly exciting to my team at DATTUS, as smart machines can only help attract a smart workforce.  

Anurag Garg is co-founder and CEO of DATTUS