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What are the top challenges facing Iowa manufacturers?


Ahead of our upcoming Made In Iowa: Manufacturing Forecast forum, we asked the panelists to provide a glimpse of some of the issues on their minds in the current operating climate. Here are the responses that a couple of the panelists provided.

When you consider Iowa’s advanced manufacturing industry and the role it plays in the state’s economy, what do you see as the top challenge(s) that manufacturers face in the next one to two years, and why?

Hank Norem
President, Ramco Innovations, West Des Moines

I see a handful of challenges manufacturers face in the coming years. The first is managing labor shortages during a time when production needs are rising. Many manufacturing companies, especially in rural areas, rely heavily on skilled labor and there just are not enough employees to fill production roles.

Greater than 50% of Iowa manufacturing comes from rural areas, and the population in these areas is shrinking. Automation can play a key role in assisting companies with this issue, but adoption can be slow at times for various reasons. Many companies do not have the time or financial resources to get started, so they are not ready for the commitment. Additionally, education and training will be paramount in moving manufacturing and related automation of processes forward.  

The second issue is tied to supply chain issues that continue to loom large in almost all industries. COVID-19 wreaked havoc on the ability of companies to source components and basic raw materials in order to keep their production moving forward. Related to this, price increases are also affecting the supply chain and companies are having to adjust their cost structure and financial models to make accommodations.  

The final issue is related to broadband connectivity of our Iowa manufacturing companies. As many companies attempt to compete on a larger scale and turn to automation, rapid and reliable internet connectivity is vital to their ability to compete and bring innovative processes and products into their manufacturing facilities.  

With manufacturing playing such an important role in Iowa’s economy at 18% of our annual state gross domestic product, all of these issues will need to be continually assessed and addressed, both privately and publicly at the state, county and local levels. They are battles we all can and will battle together.

Gül Kremer
Wilkinson Professor, Industrial and Manufacturing Systems Engineering, Iowa State University

Challenge: In the age of Industry 4.0, how do we ensure sufficiently trained advanced manufacturing workers with transferable skills to sustain the growth of manufacturing output?

The manufacturing industry is experiencing shortages in manufacturing workforce. Several companies (including Deere, Winnebago Industries and Sukup Manufacturing) are on record indicating they can’t find enough workers to meet the current demand. This shortage is coming at a time of significant increase in orders and sales. For example, Deere has reported a 30% increase in orders, and about a 20% increase in sales.

It is impossible not to include population dynamics as one of the culprits. Iowa’s population is growing at a slower than average rate (4.8% versus 7.4% of the U.S. average per 2020 census).

It is also hard to overlook the workforce vulnerability under sustained surges in demand and sales. With the COVID 19 pandemic, impacts of such surges have been amplified, especially for supply chains with global nodes. There is even a realization that adversaries (competitors or at a national security level) are capable of “weaponizing” supply chain vulnerabilities. It is very difficult to have the capacity and resources to withstand such surges and remain competitive.

More fundamentally, increasing discussions on Industry 4.0 and automation in general may be curtailing the appetite for preparing for and signing up for advanced manufacturing positions; the fear may be being replaced with technology, sooner or later. For a paper I am writing with colleagues, our review of extant works revealed employment rose for occupations with nonroutine tasks and fell for those involving tasks that could be replaced by technology.

Despite industry 4.0’s allure to support resilience in our advanced manufacturing systems, these workforce trends may deepen the workforce vulnerability. Therefore, an important challenge is: In the age of Industry 4.0, how do we ensure sufficiently trained advanced manufacturing workers with transferable skills to sustain the growth of manufacturing output?

The response to this challenge will require university, industry and government collaboration to train advanced manufacturing workers for transferable industry 4.0 skills.

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