Georgia Tech study: Sales, Lean, skilled worker help needed

Re-shoring on the rise in the state, according to a Georgia Tech study report


For the first time since researchers began tracking the statistic, more Georgia manufacturers have been benefiting from in-sourcing – production work coming to them from outside the state – than have been losing work to other states and countries. CourtesThe 2012 edition of the Georgia Manufacturing Survey, conducted by Georgia Tech University, points to four areas of concern for manufacturers in that state. Topping the list is a need for more help in sales and marketing, with 36% of manufacturers citing this as a significant need.

Manufacturers also want more help with the Lean manufacturing operation, cited by 32% of manufacturers, and worker skills, with 24% needing more technical workers and 16% needing more workers with basic skills. Energy cost management is cited by 21% of manufacturers as an area of concern. That percentage has doubled since 1999.

The study also noted a significant increase in re-shoring of jobs to the state. According to a press release issued by Georgia Tech, nearly 16% of the companies responding to the survey said work had been transferred to them from outside Georgia, compared to slightly more than 14% that lost work to out-of-state facilities.

“We have finally seen a crossing of the lines so that more companies are benefiting from in-sourcing than are losing to outsourcing,” said Jan Youtie, director of policy research services in the Enterprise Innovation Institute at Georgia Tech. “It’s not a huge difference at this point, but it is a positive and consistent trend for the manufacturing community.”

Plant Engineering spoke with Youtie about the implications for manufacturers in Georgia and elsewhere. 

PE: What are Georgia manufacturers able to offer right now that seems to be attracting manufacturing investment? Is this occurring in specific sectors or across the board?

Youtie: Science-based manufacturers (those in medical device, chemicals, and petroleum industries) and large manufacturers are more apt to be engaged in in-sourcing.

PE: Another trend we’re looking at that is mentioned in the study is additive manufacturing. Is this a solid trend, or a technology more applicable to specific industries?

Youtie: Additive manufacturing is not widely used (fewer than 10% actually use it) though larger manufacturers are more apt to use it. There is no one type of manufacturer (by industry group) that stands out as being significantly greater users of this technology, although machine shops are less likely to use it.

PE: The study also focuses on the relationship between technology and employment. Has the Skills Gap emerged as a problem for Georgia manufacturers, and how are they addressing the issue?

Youtie: This survey highlighted a re-emergence of manufacturers’ concerns about technical skills but we continue to see that investment in training is relatively low ($100 per respondent on average). 

PE: What are the barriers to sustainability? Is it more profitable today to run a sustainable plant?

Youtie: Although we do not ask about the barriers to sustainable manufacturing, we do see that the vast majority of manufacturers are engaged in some aspects of sustainable manufacturers, such as eliminating waste materials sent to landfills and more than half have a goal to eliminate air or water pollution. Both of those areas appear to have their 2010 plans implemented by 2012. Other areas such as using renewable energy to run the plant still are not very common at all (set by only 7% of manufacturers in 2012), however, although the percentage with this goal has risen slightly from 2010 to 2012.

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