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4 Problems, 1 Solution: How OEMs Win When Manufacturing Partners Invest in Training

The U.S. manufacturing industry is headed toward a giant labor shortage and a potential crisis. How should OEMs adjust to ensure their plans won’t be disrupted by problems with their manufacturing partners?

Apprenticeship Article

OEMs who rely on U.S. manufacturers may already be aware that the manufacturing industry is headed into potential crisis for those who are unprepared, as manufacturers face an unprecedented shortage of labor on their production floors. A recent report from Deloitte projects that 2.4 million manufacturing positions could go unfilled between 2018 and 2028.

The pains of this shortage will be felt by OEMs just as much as the manufacturing companies themselves. Because of the lack of available trained labor, some manufacturers are being forced to fill critical positions with under-qualified labor. Such actions increase the risk that OEMs will be exposed to several potential negative impacts, including: low retention of institutional know-how at crucial manufacturing facilities, decreased product quality, late deliveries, and higher error rates that necessitate costly rework.

The giant gap between labor supply and demand is due largely to an extreme shortage of skilled labor. Many manufacturers have failed to invest in employee training, an oversight which will likely come back to bite these companies; Deloitte estimates that this skills shortage could put $454 billion of manufacturing GDP at risk by 2028. The threat is real, and it is here now.

So, what are the best, most prepared manufacturers doing today to combat the looming crisis? Logic PD, a Compass Electronics Solutions company, is one of a growing number of companies dedicated to confronting the labor shortage by investing in rigorous apprenticeship programs to grow and retain a skilled in-house labor pool. Apprenticeship programs can directly address several specific issues leading to poor manufacturing performance, issues that will likely be exacerbated by the skilled labor crisis. Here’s how:

 

Problem 1: Failure to Understand How Their Piece Fits in the Puzzle

Many manufacturing companies are tempted to rush their employee training and pay the price later. A rushed training process typically entails giving an employee the minimum amount of information necessary to do their job. In some cases, employees are left to figure out important aspects of the production process without adequate guidance. Under-training employees exposes manufacturers to two specific errors that may result in mistakes that damage relationships with OEM customers.

  1. Incorrect and/or slow production processes
  2. Delayed and/or error-filled delivery to customers

Conversely, establishing a demanding apprenticeship program improves the training of a manufacturer’s entire team. Apprenticeship programs like those at Logic PD are typically two-year programs that offer both extensive classroom education and on-site training. Instructors have the freedom to take their time and diligently train apprentices.

Graduates of a program receive the certifications necessary to fill skilled positions like advanced soldering and machine operator. The training involves not only learning how to execute a difficult task, but understanding the entire process surrounding their responsibility, as well as the impact that the proper execution of their tasks has on both the completion of the product and the satisfaction of OEM customers.

 

Problem 2: The “Snowball Effects” of Institutionalizing Bad Habits

Bad training doesn’t end with the trainee. An incorrectly trained employee often ends up passing bad habits on to the next trainee, and the snowball of bad training and poor quality continues to grow. It’s understood that there are several skill-sets and specific talents required on a manufacturing floor – the skills required of a solderer vary significantly from those needed of a machine operator.

But failing to ensure a worker’s competency in these very specific tasks can lead to defects in production that require rework before parts or completed products can be delivered to the OEM customer. Until employees are properly trained, this cycle of unskilled and uninformed production continues.

Companies that install effective apprenticeship programs break that cycle. Apprentices train-out the bad habits that plague under-performing manufacturing operations.  And in turn, once they’ve completed their training, these workers help train good habits and proper procedure into the rest of the manufacturer’s labor pool, helping to instill high quality standards and processes going forward.

 

Problem 3: The “Cycle of Shoddiness” and Its Impact on OEMs

Poor performance of under-trained employees often necessitates extensive rework to fix defects, leading to bottlenecks in a manufacturer’s production schedule. This “cycle of shoddiness” makes a manufacturer much more likely to miss a customer’s delivery window. More required rework also means higher costs to execute a customer’s program – and shrinking margins associated with that program.

A manufacturer’s relationship with its customers can sour quickly because of these struggles, and affected customers may re-open RFQs to seek other manufacturers for their future business. Investing in robust employee training and apprenticeship programs can allow manufacturers to nip these issues in the bud while also improving the quality and efficiency of internal manufacturing systems — and, by extension, company profitability. This causes a ripple effect on the two most important variables that shape relationships with customers: costs and on-time delivery rates.

 

Problem 4: The “Punch-the-Clock” Mentality

Clearly, investing in an apprenticeship program can bring major advantages to a manufacturer and its customers. But one aspect of the apprenticeship program that cannot be overstated is the impact its completion can have on the lives of apprentices. By offering this training opportunity to employees, a manufacturer signals its dedication to investing in employees’ future well-being and career progression.

These programs often select candidates that don’t possess college degrees and give them the opportunity to occupy positions which offer improved salaries and ample opportunities for growth they may not otherwise have. Apprentices can then use their knowledge to improve the working experience of their peers. In short, these programs help transform what could otherwise be perceived as stagnant “punch-the-clock” jobs into stable career paths ripe with opportunity, a proposition far more attractive to prospective employees.

 

The manufacturing industry is facing a skill gap crisis that will likely worsen over the next decade. Stakeholders in the industry are already feeling the impact of this crisis in the quality of products, the timeliness of order delivery, the cost of manufacturing and the struggle to find and retain skilled employees. Luckily, apprenticeship programs are beginning to pop up across the country, helping to fill the skills gap and offer a sustainable, mutually beneficial solution for all stakeholders in the manufacturing process.

By investing in apprenticeship programs, companies can dedicate time and money toward proving to their customers the value they place on creating opportunities for their employees while also creating a continuously-improving facility focused on exceeding the needs of their customers. In short, apprenticeship programs provide a win-win for manufacturers, their employees and their OEM customers.