Tom Still: Can’t find enough workers? More manufacturers turn to tech for answers

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Attracting and retaining skilled workers remains a leading worry for Wisconsin manufacturers, but they’re not letting it stand in the way of competing in what many see as an uncertain economy.

In fact, automation and adoption of emerging technologies such as artificial intelligence are among strategies a growing number of manufacturers are pursuing as they aspire to improve productivity, tap new markets and grow their bottom lines.

That’s among conclusions to be drawn from a statewide survey of 415 manufacturing executives conducted this summer by the Wisconsin Center for Manufacturing and Productivity, which levers industry and government partnerships and initiatives to help companies become more competitive.

Wisconsin is one of the nation’s most manufacturing-intensive states when it comes to output and the share of the private workforce employed by manufacturers of all sizes. It usually ranks with Indiana and Pennsylvania among the top states in per capita terms. In raw numbers, Wisconsin ranked ninth among the 50 states in a 2023 analysis by Industry Select with nearly 575,000 workers and more than 9,200 companies.

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In short, manufacturing is a huge contributor to the Wisconsin economy — which affects the prosperity of its communities and citizens, directly or indirectly. Learning what matters to manufacturers of all sizes can help to identify emerging trends, especially over time.

That’s been the goal of the WCMP survey in its first three years, using demographics that reflect the state’s sector mix (metal fabrication and machinery manufacturing are two leading examples) and the regional distribution of all types of manufacturers. Also factored into the survey is finding the right mix of small (under 50 employees) companies and larger firms, which is a three-to-one split in Wisconsin.

The latest survey — released in time for October’s “Manufacturing Month” — showed a narrow majority of owners and executives believe the economy is on the right track. While not as optimistic overall as they were in 2021, 85% said they were confident in the financial outlook for their own company.

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Asked about the leading barriers to success, attracting and keeping skilled workers emerged on top for the third straight year — especially for manufacturers with 50 or more employees. It was high for smaller firms, too, although the cost of materials ranked higher on their worrisome scale.

Buckley Brinkman, executive director at WCMP, said workforce challenges have changed how many companies view traditional staffing patterns. Rather than laying off workers during slow times, for example, companies might choose to keep employees versus venturing out later in a tight hiring pool.

Such trends may help to explain the declining percentage of executives who said finding workers is “very difficult,” especially among the larger companies. That may be linked to strategies such as higher pay, better benefits and other changes in the work environment. However, those same employers are turning to automation and other technologies.

Automation in manufacturing is the process of using production management software or robotic tools to operate a plant. Nearly two-thirds of those surveyed (64%) said automation is either important or very important to the future of their company. A higher share of large manufacturers said automation was important, but the percentage was also on the rise for small firms.

Relatively new on the technology scene for manufacturers is the use of artificial intelligence. Possible uses in manufacturing include predictive maintenance, monitoring production, quality assurance and inventory management.

Wisconsin executives were asked: “Have you previously used, are you currently using, or are you considering using artificial intelligence … in your business operations?” One in four replied “yes,” again, mostly among the large company leaders, but a surprising number given AI is still relatively new on the scene.

And yet, about half of surveyed executives (51%) when asked said: “AI is not going to have much of a real impact on businesses like mine.” That flies in the face of those who predict AI will change everything about everything over time.

Brinkman said too many manufacturers may be “asleep at the wheel” when it comes to recognizing the need to at least consider how AI could help their business. More companies also need to take cybersecurity seriously, he added, in an age of costly “phishing” attacks and data breaches.

Wisconsin is a leading manufacturing state because, for the most part, companies have embraced innovation. The latest manufacturing survey points to the need for that trend to continue.

Tom Still is the president of the Wisconsin Technology Council. Email: tstill@wisconsintechnologycouncil.com.

The Early Stage Symposium in Madison puts young companies in front of investors from Wisconsin and beyond. Applications are being accepted through Friday.

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