Industrial companies make products that shape our daily lives, such as clothing, food, and products used in the construction of the buildings and roads we use every day. According to Kim Borden, a Partner in the Chicago office of management consulting firm McKinsey & Company, a wide variety of companies are leading innovation in manufacturing by “leveraging advanced analytics, artificial intelligence, and automation in ways that a lot of people don’t realize.”
Borden’s interview, along with several other interviews and blog posts (links to some of these are compiled here), promotes a new book published in October 2022 by current and former McKinsey & Company employees Asutosh Padhi (Senior Partner and North American Managing Partner based in Chicago), Gaurav Batra (an alumnus of the Washington, DC office), and Nick Santhanam (alumnus of the Bay Area office) titled The Titanium Economy: How Industrial Technology Can Create a Better, Faster, Stronger America. For research, the authors “examined more than 80 industrial technology companies and identified the 35 leading the American economy into a new era of sustainable, inclusive growth.” These ‘titanium economy companies’ are the ones, according to the authors, “that [create] American jobs and [fuel] innovation.” They also posit that the sector “could boost US GDP by $275 billion to $460 billion while adding up to 1.5 million jobs.”
So what is the future of manufacturing, and how do companies ensure sustainable growth?
The authors were clear that they are not laying out one single answer in the book, but rather are sharing the facts that can lead each organization to its own answer., In this author interview they revealed a few overarching themes:
- Supporting employees
The authors mention that families and communities are very dependent on the jobs and support opportunities created by their local factories. When discussing his work with McKinsey & Company that led to some of the ideas in the book, Batra declares that over his 12 years with the company helping to improve industrial operations, “In every instance, you could draw a direct correlation between how well a company does and what kinds of opportunities it starts affording its own employees.” Padhi talks about how the people in the titanium economy companies feel that they’re a part of the solution. “You also get a sense of purpose: Why are these people so excited to be here? It is because they believe that they’re driving innovation, that they’re doing things that are important to our future.”
- Embracing innovation and technology
According to Padhi, “The most important lessons are around the importance of recognizing innovation and technology. We have a very strong foundation in the United States to build from; we have a set of about 5,000 companies that have been driving the titanium economy’s growth, not just for the past five to ten years, but for the past 100 years…Over time it could perhaps be two or three times the scale of what it is today. It could help us create a lot more jobs…it will help us create a much cleaner planet.”
- Bringing the future of manufacturing to life
Padhi talks about the old view of manufacturing, that of dirty equipment and heavy machinery, and compares to the titanium economy companies. “You walk into one of these companies, and the places look clean; the machines are new; the people are working together in teams; the place is inviting. You get the sense that there is something happening that is much more modern and oriented around precision manufacturing, whether it’s using new materials, new technologies, or different types of equipment.”
- Creating pathways to fill unfilled jobs
McKinsey & Company estimates that 2.4 million industrial jobs went unfilled in the past 10 years, costing the economy $2.5 trillion, and that this labor shortage affects manufacturers at all levels. In a separate post that details some of the ideas provided by companies profiled in The Titanium Economy, they suggest partnering with local trade schools and community colleges to create a talent pipeline, giving employees clear pathways to advancement and training for upskilling, and giving employees a feeling of ownership such as through stock plans. The post ends by making it clear that “Solving the country’s manufacturing labor shortage will take a coordinated effort involving industrial companies revamping talent practices, educational institutions refocusing training and upskilling programs on manufacturing, and local, state, and federal governments considering supportive policies and programs.”
As we move towards 2023, manufacturers should be considering where automation and innovation can help them drive toward a more successful future by finding new ways to support employees, embrace innovation, and by creating new career pipelines and pathways.
At Wes-Tech, our applications engineers have the depth of experience to design the right solutions to help you optimize your resource utilization and increase your profitability, and to engage your employees more effectively through man-machine automation systems while you work to fill talent gaps. Contact us today for a consultation.
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