For many years, Wisconsin had the second most manufacturing-intensive economy in the nation. But since 2000, when the number of Wisconsin manufacturing jobs hit an all-time high, the state has lost more than 140,000 of those jobs.
This also leads to losses in service support operations such as warehousing, transportation, logistics, marketing, administrative services and more, says Mike Klonsinski, executive director of the Wisconsin Manufacturing Extension Partnership.
"Some jobs are moved closer to the customer base, some jobs are lost because the products are no longer in demand, some jobs are lost because efficiencies allow greater output with less labor, some jobs are lost because production is cheaper elsewhere, and some firms and jobs are moved because the owners feel that other regions are more supportive of their operations," he says.
WMEP advocates for lean manufacturing, growth services, strategic business planning, quality systems and supplier development.
"Manufacturing is a core economic driver for the state of Wisconsin, whether measured in quality jobs, wealth creation, export leadership or percent of Gross State Product," says Klonsinski. "Leaders from both sides of the political aisle, from industry, from labor and from academia are putting in place practices to sustain and revitalize manufacturing."
Klonsinski says WMEP provides technical assistance and consulting services to Wisconsin’s small manufacturers so they can better compete, and it helps define and promote Next Generation Manufacturing strategies — forward-looking strategies that drive performance and competitiveness — so that Wisconsin will continue to be a leading manufacturing region.
In the short term, he says, manufacturers need to be aggressive about saving money and using lean practices. He says now is a good time to review operating expenses and renegotiate prices with vendors, stay close to core suppliers and customers, and establish or renew a working relationship with support organizations like a technical college, university, local economic development resources and WMEP.
However, he adds, a 100-percent focus on the short-term is a survival strategy and not a winning strategy.
"The world economy will recover and when it does, the pace of recovery and demand for manufactured goods will be greater than we have ever witnessed," says Klonsinski. "It is the firms and regions of the world that are best prepared for that recovery that will capture market share, profits and jobs in 2011 and beyond."
James Buchen, vice president of government relations for Wisconsin Manufacturers and Commerce, agrees that a dramatic change in our state’s direction is needed.
"Wisconsin’s manufacturing economy is in crisis," he says. "Global and regional competition is increasingly heated as political leaders across the United States and around the world develop initiatives to attract and retain jobs for their citizens. "
Buchen says WMC addresses public policy and budget proposals by the governor, currently under review in the Legislature, propose billions in higher taxes, expanded liability, increased insurance premiums, mandated wage increases, and increased litigation regarding workplace complaints. Such policies would make Wisconsin’s business climate even more difficult, he says.
"With people who look at the business climate in various states — Forbes magazine, CEO magazine — we often fall in the bottom 10," he says. "We’re trying to get people’s attention to this problem. I think the combination of our being a high-taxing state and highly regulated state works against us as being a competitive place for manufacturing."
WMC and 700 business and community leaders throughout Wisconsin have developed a broad outline called Moving Wisconsin Forward. This vision for economic renewal and job creation seeks to partner with policymakers to position Wisconsin to lead the way out of the current recession.
Becoming more competitive is also a priority for Bruce Mommaerts, executive director of the Oconto County Economic Development Corp.
"For the short term, [Wisconsin manufacturers should] get lean, get efficient, analyze their inputs for better ways to get raw materials in and better ways to get efficiency and profitability," he says. "Engage in new product development, new methods of manufacturing and upgrades of skills."
Mommaerts says American manufacturers should utilize Lean Manufacturing so they can be competitive, efficient and as profitable as they can be with technology available to them.
"If a company is bemoaning the fact they’re losing profitability and are not looking at new methods and new manufacturing techniques — such as robotics and computerization — they’re signing their own death warrant," says Mommaerts.
Mommaerts says the state can help by promoting manufacturing-based computer skills and production-based computer skills starting in the elementary schools; and to eliminate the educational bias that working in manufacturing isn’t a wise career choice. He adds some schools are starting to partner with area industry for education that will make students employable with post-secondary education, but this needs to become statewide.
Dale Walker, director of business and industry services, and Amy Pietsch, director of the Venture Center on Fox Valley Technical College’s Appleton campus, agree that education is key.
"When we work with businesses today, they are looking for a highly skilled workforce, and that is an important part of retaining those manufacturers in the state," says Walker. "There’s a high demand for welding and metal fabrication, engineering, computer-controlled manufacturing, Lean methodology and basically to drive a very efficient manufacturing workplace."
Walker says the state is always at risk for losing manufacturing jobs to areas where there may be lower wages or better tax benefits, but Wisconsin’s strong quality of life, discipline and knowledge of the workforce, and good school system help us retain jobs.
But the state needs to meet manufacturers’ needs as well.
"We are in very close touch with the companies and business advisory councils," he says. "We have a very good pulse on the skills requirements of these companies for them to be competitive, improve efficiency and the effectiveness of their workforce."
Pietsch says entrepreneurship and innovation are driving economic development. "It’s critically important that they develop management and leadership skills," she says. "We do that in a variety of ways in providing the technical assistance they need, customized training, one-on-one business coaching. It’s all designed to drive and increase their skill set."
"The common denominator across industries is the need to constantly innovate within their organizations, change form and structure to be more efficient or develop new products to be competitive in an international marketplace," says Walker.
FVTC assistance to businesses starts with an assessment to determine where their "pain points" are and identify the root problem.
"They come to you with a specific problem, but you will find that what they originally thought was the problem is not the root," says Pietsch. "We make sure we have accurately defined the problem and then we can develop a customized solution."
Walker gave an example of a welder shortage in the area, leaving a local company unable to find skilled workers. FVTC worked with a staffing firm to identify candidates, who then went through a customized training program that produced 10 skilled welders to help staff that company.
The Venture Center’s E-Seed training program provides a strong base to Northeast Wisconsin’s business landscape by working with entrepreneurs. Startup businesses have provided more than 70 percent of new jobs in the area in the last decade. With 160 students having completed the program since 2002, "they’re important as feeder businesses for the economic health of our area," says Walker. "There’s an ever-growing and strong entrepreneurial culture in Northeast Wisconsin. We see every day the impact these are having throughout the region.
"When it comes to economic development, we’re in a competitive environment. We have
to be very active in offering companies incentives to stay here, grow their business and develop their workers."