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Manufacturing 'in transition'
[November 19, 2005]

Manufacturing 'in transition'


(The Post-Crescent)With news of manufacturing job cuts coming almost weekly, one might think the industry in northeastern Wisconsin is headed for doom.

But business owners and industry experts will tell you that's not necessarily the case.

They point to recent research suggesting not only is manufacturing across Wisconsin still strong, it has the potential to prosper.

The sector plays a key role in the state's economy, with manufacturing and its related industries accounting for $46 billion of Wisconsin's economic output, or about half, as well as 512,000 jobs, said John Brandt of the Manufacturing Performance Institute, based in Ohio.



Brandt wrote the Wisconsin Manufacturing Study, which was commissioned by the Wisconsin Manufacturing Extension Partnership. The results were released earlier this month.

The Fox Valley, in particular, is home to a strong industry driver -- paper -- that remains competitive across the country, the study said.


"Wisconsin has the potential to be a leading manufacturing state, but it's not a given," Brandt said. "There's a lot of pressures out there for businesses. Companies can either succeed by being a low-cost provider or providing some value-added service. Wisconsin manufacturers and their employees need to make the transition to business practices that emphasize speed and agility."

That's one thing Dan Ariens, president of Ariens Co., knows well. The Brillion-based manufacturer of snowblowers and lawn equipment is ahead of the curve when it comes to lean manufacturing processes, which focus on eliminating waste and maximizing value in everything from production to the consumption of the goods or services.

He's optimistic.

"There's no question there are some challenges out there, but we have a strong base here and I think we're poised for growth," Ariens said.

"We have the right kinds of industry here, a strong work force, a strong tradition and strong leadership."

Output rising

Michael Klonsinski, WMEP's executive director, said the Madison-based group decided to commission the study because no one really had a complete picture of the state's manufacturing sector.

"This study gives industry leaders, policymakers and the public new insights into the opportunities and challenges facing Wisconsin," he said. "There are a whole lot of misconceptions out there and we wanted to step back and see where we are really at."

While job layoffs grab the headlines, Klonsinski said, that doesn't provide a true picture of the state's manufacturing health.

"It's important to recognize the way manufacturing is changing. It's in a transition, not a decline. Output is still rising," he said. "There are more companies like Kimberly-Clark (Corp.) who are doing more outsourcing of engineering or testing. Those jobs haven't gone away from the economy, they have just left the company."

WMEP hopes to use what it has learned in the study to help small and midsize manufacturers, who are the "key to the state's manufacturing sector," Klonsinski said.

"Exports from small, nimble manufacturers are up," he said. "Eighty-two percent of the state's manufacturers are small manufacturers and they are competitive."

Gov. Jim Doyle said his Grow Wisconsin economic development agenda directly takes up the report's recommendations.

He said his plan includes a $1.5 million initiative to help manufacturers assess their ability to compete in the world market, adopt new technology and increase efficiency.

"Manufacturing in Wisconsin is undergoing changes brought on by the pressure of a global economy," Doyle said, "and we must invest in this segment of our economy now, more than ever."

Talent, perception

Declining availability of talent is one of manufacturing's biggest challenges, Klonsinski said.

"We have an aging population of employees who have a lot of skills and it's going to be hard to replace them," he said of the baby boomers who soon will be reaching retirement age. "I am often told that companies are having a hard time replacing those workers with the most skills and knowledge base."

Brandt said the sector also has to fight the perception that working for a manufacturer is a bad career move.

"Some people think these plants are dirty, dingy places, but that's not the case," he said. "Manufacturers today are high-tech and these plants are as clean as some hospitals."

Ariens hits the road often to talk with schools and young people about how working for a company like his can be a rewarding and interesting career. "I am out there all the time talking up this great industry of ours," he said.

Then there's the reality that plant closings and layoffs often are in the news, Brandt said.

"That may make some people think it's not a secure, stable sector to be in," he said. "We really need to address how we're going to develop the work force of the future."

Ariens said he tries to make employees feel like they have a stake in the company.

"We want employees to know they are a productive part of a continuous plan for improvement," he said. "We want to engage them in what we do every day."

Productivity also is a concern. Wisconsin's manufacturing productivity lags behind other industrial states, with an average employee output at 86 percent of the national average, according to the study.

Improvements in worker output could help the state better compete with Michigan, Ohio, Illinois and Indiana.

The study points out that Wisconsin workers may not be able to increase the value of what they produce each hour because they're making generally low-cost products.

While Brandt said some people think the answer to manufacturing success is to become the next "bio-tech capital," he thinks Wisconsin has the keys to its success already here.

"Everyone tells me they are going to be on the cutting edge and be the next big thing, but they all can't be that," he said. "Wisconsin has a strong manufacturing tradition and sector, and I think by doing the right things it can be successful and be expansive."

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