The newsLINK Group - The Fine Art of Staying Competitive

Editorial Library Category: Manufacturing Topics: Manufacturing, Best Practices Title: The Fine Art of Staying Competitive Author: newsLINK Staff Synopsis: Many manufacturing companies are bringing their factories back to U.S. soil, which is a good thing as far as U.S. manufacturing as a whole is concerned. The reality of a global economy means long-term competitiveness depends on having lean production and excellent operations. Editorial: The Fine Art of Staying Competitive 4064 South Highland Drive, Millcreek, Utah 84124 │ thenewslinkgroup.com │ (v) 801.676.9722 │ (tf) 855.747.4003 │ (f) 801.742.5803 Editorial Library | © The newsLINK Group LLC 1 Many manufacturing companies are bringing their factories back to U.S. soil, which is a good thing as far as U.S. manufacturing as a whole is concerned. However, the fact is that although the U.S. is a manufacturing leader, it is also a high-labor cost country, just like Germany and Japan. The reality of a global economy means long-term competitiveness depends on having lean production and excellent operations. The right preparation now will mean a greater ability to take advantage of the very real opportunities that are available now, while also helping U.S. manufacturers achieve the long- term competitive edge they need to succeed. Being in a high-labor-cost country means the people at your manufacturing company have to be smarter, nimbler, and more innovative than the competition. You have to cultivate excellence by using an educated, sophisticated workforce and the best leaders you can find. Your approach should be an integrated one that looks holistically at ways to train, develop, and educate the people you hire, using both internal and external resources to help. Finally, you will also have to adjust the ways you hire and pay people so employees see your company as an excellent place to stay. What are the specifics for creating and maintaining a world- class manufacturing company? Successful manufacturers solve five key challenges in their efforts to better implement lean manufacturing and to improve their operations: Employee retention Balanced performance The time-to-market process Integrated tasks and jobs Bottlenecks Employee Retention As of the second quarter of 2013 to the first quarter of 2014, the five states with the highest turnover rates for all types of jobs were Alaska (58.7 percent), Oklahoma (54.63 percent), Utah (54.19 percent), Wyoming (53.53 percent), and Louisiana (53.14 percent). All five of these states were hiring; they just weren’t retaining employees. The fact that the hiring and turnover rates were both high indicates most workers were moving from one company to another. The current nationwide trend is for most of the turnover to be voluntary. During the first quarter of 2014, more than 60 percent of those who left a company did so because they wanted to. During the first quarter of 2013, that percentage was 57.9 percent. How do these percentages compare nationally? Across all industries, the average annual turnover rate from 2011 to 2012 was 15 percent. It’s instructive to look at turnover rates for specific industries that tend to have high turnover rates anyway: Arts, entertainment, and recreation: 27 percent Hotels, restaurants, and bars: 35 percent Retail and wholesale trade: 22 percent Experience matters. In order to improve operational performance on a continuous basis, manufacturing companies need experienced employees. However, the average turnover rate for U.S. manufacturing jobs is 20 to 30 percent. That’s too high. (A better percentage is less than five percent.) If a company is always training a large number of new employees to replace the ones who left, then at a minimum, that company is being forced back to the starting line far too often. The company might also find itself dealing with overloaded, burned-out employees who are increasingly stressed and likely to call in sick. It’s easy to see how high employee turnover can negatively affect any company. Of course, no employee stays forever. But for companies that have a high turnover rate, it is important to find out why so many people are leaving, and then figure out ways to encourage employees to stay. Why do employees leave? Sometimes they leave because they hate their job, or they don’t have realistic expectations of the job or the workplace. Some people find a better job;

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