Article as featured in Crain’s Chicago Business.
IMEC leader says sector faces transformational moment, urges adopting culture of continuous improvement.
In Illinois, small and midsize manufacturers have an outsized impact — not only on the manufacturing sector and the state’s economy, but on the national and global stages as well.
“Illinois is a top-five manufacturing state by any measure, and small and midsize manufacturers are key to that success,” says David Boulay, Ph.D., president of IMEC, a public-private partnership that enhances manufacturers’ productivity and growth.
So, when small and midsize manufacturers experience significant change, the effects can ripple around the world. Today, the changes are multiplying and converging — with everything from the shifts in federal policy to the rise of automation to the chronic need for more workers. “What we’re facing now is a transformational moment in manufacturing,” Boulay says.
To make the most of the challenges and opportunities ahead, manufacturers will need to adopt a culture of continuous improvement, Boulay advises. “Companies need to take the mindset of progress, not perfection.”
Adjusting to shifting winds
Economic and policy shifts can have an immediate impact on small and midsize manufacturers and the larger manufacturers they supply. Amid so much recent upheaval, manufacturers must remain both nimble and strategic.
Recently, BTM Industries, a Woodstock, Ill.-based short-run machine shop, has seen fluctuations in its vendors’ pricing. In the past, its vendors would hold materials at promised prices for two weeks. Now, they do so for just two days. In response, BTM has had to give its customers the same amount of time to decide whether to accept BTM’s quotes. “The volatility has affected that decision window,” says Kyra Tillman, BTM’s president and owner.
In a climate of economic uncertainty, manufacturers will need to remain nimble with both their day-to-day operations and their long-term strategic plans, Boulay says. “I think of it not as a strategic plan for the next year that sits on a shelf, but as a constant iteration process,” he says.
Embracing automation
Automation in manufacturing involves much more than robots working on a shop floor. “For small and midsize manufacturers, automation can be a great equalizer because it can leapfrog their productivity and performance,” Boulay says.
In the past, BTM relied on a manual, paper-based production process. Once each station completed its task, a worker then had to walk paper documents to the next station to keep the process going. Now, all those notifications and documentations are entirely automated.
As a result, BTM last year increased its revenue by 30%. “We did not add any machines, workers or customers. Our existing customers were able to give us more work because we were getting it done faster,” Tillman says. “Automation has made a big difference in our efficiency and effectiveness.”
To reap the rewards of automation as BTM does, manufacturers will need to learn and apply lean manufacturing principles, Boulay says. That’s what Starrmax Packaging has done in partnership with IMEC.
“With lean manufacturing, we optimized what we do with as little effort as possible, and it had a large impact on our business,” says David Maxwell, president of Starrmax, a Wheeling, Ill.-based manufacturer of recyclable plastic bags.
Bolstering the workforce
Small and midsize manufacturers have 500 or fewer employees, but most are much smaller. About 70% employ only about 20 people. These companies, often family owned, rely heavily on their limited resources — and their need to attract and retain talent will only increase as Baby Boomers enter retirement.
“It is a challenge when we look for those positions that require more experience,” says Maxwell, who employs about 50 people. Training a new worker to operate Starrmax’s complicated equipment can take six months to a year, Maxwell adds.
Starrmax bolsters its workforce partly by hiring through referrals and by training not just its factory workers but also its managers. Manufacturers likewise will have to invest in the frontline leaders who often translate strategy into action, Boulay says. “These supervisors are so critical to developing culture.”
BTM, which employs about a dozen people, has the same talent-gap problem facing all manufacturers, Tillman says. “We need more people to be able to grow.”
BTM addresses the talent shortage by offering apprenticeship and internship programs and by partnering on workforce development initiatives with organizations such as IMEC and the Manufacturing Pathways Consortium.
“We’re trying to help people see that manufacturing is not dark and dirty and scary,” Tillman says, noting that in McHenry County, where BTM is located, manufacturing is the largest employer. “People don’t realize how many jobs are out there.”
