Invest in New Jersey’s Manufacturing Sector

By Robert Loderstedt, President and CEO of New Jersey Manufacturing Extension Program, Inc.

In recent days, President Barack Obama visited a large General Motor’s automobile facility in Lordstown, Ohio, which was on the verge of closing due to lagging vehicle sales and presumed inefficiencies in its production processes. Industry leaders have committed to turn the facility around buoyed by, in part, the substantial bailout of the federal government. While this is the type of headline that has come to epitomize the plight of manufacturing in the US, there are others that have gone somewhat unnoticed that have the potential to have a greater impact over time on our manufacturing sector.

A great example is the recent national surveyconducted to assess the readiness of the manufacturing sector to compete against world class organizations in six key areas including: customer focused innovation, finding and keeping qualified people, superior investment in how goods and services are produced, greater attention to suppliers to maximize collaboration, focusing on sustainability with special emphasis on waste and energy savings, and enhancing an organization’s ability to explore and capitalize on global markets. The study was coordinated by the American Small Manufacturers Coalition and supported by 18 different states, including New Jersey, through the national network of Manufacturing Extension Partnership centers across the United States.

The Next Generation Manufacturing Survey (NGM) involved over 2,500 manufacturers, many whose economies are similar in composition to New Jersey’s such as Ohio, Illinois, Massachusetts, Pennsylvania, Missouri and Wisconsin to name a few. Almost 400 New Jersey manufacturers responded to the national survey.

Why are the survey results important to New Jersey and the U.S.? Manufacturing remains a critical sector of our national economy accounting for more than 13 million jobs and continues to support job growth in such industries as logistics, transportation, marketing, technology, and business services among many others. More than half of U.S. investment in research and development comes from the manufacturing sector. While manufacturing employment declines in New Jersey, it still accounts for more than 300,000 quality jobs in our state. The net decrease in jobs is evident, but there is no disagreement about the increase in worker productivity that still exists in the manufacturing sector.

What did the Next Generation Manufacturing Survey say about New Jersey firms? Not surprisingly, New Jersey’s experience did not vary much from the national experience. There is little consolation in that outcome; nevertheless, with strong leadership at the state and local levels, we are certainly in a position to begin to address the key concerns brought to light by the NGM Survey.

The most critical concerns are:

  • A disconnect between strategies manufacturers believe to be critical to achieving success and their actual progress in implementing those strategies
  • Inability to adapt to greening or sustainability processes even in light of consumer and government demand for such practices
  • Lack of serious attention to exploring global markets to increase market share and expand partnership opportunities
  • Investing in workers in a way that promotes continuous improvement in the workplace
  • Greater attention to the need for serious and comprehensive succession planning strategies, which by some accounts could impact over 80,000 manufacturing firms in the U.S

What does New Jersey do next to respond to the critical points raised in this national survey? Regardless of who wins the upcoming election, one of the goals of the next administration should be to help NJ manufacturers perform to world-class standards or a least progress to those standards in a meaningful time frame. We should consider the following recommendations, which originated from representatives of business and industry, higher education, and workforce development professionals:

1)Develop a workable understanding of what the NGM survey results say about the performance of NJ manufacturers

2)Share the survey results with all NJ manufacturers

3)Educate federal and state lawmakers and other policy makers about the results of the NGM survey and its implications on NJ if no action is taken

4)In conjunction with policy makers and representatives of the manufacturing community, develop strategies that will help manufacturers progressively move closer to meeting world-class standards

5)Create an awareness campaign to promote the results of the NGM survey and the importance manufacturing has on NJ’s economy

6)Develop partnerships with education and training organizations to assist manufacturers with the important role of recruiting, developing, and retaining workers as an investment in their organizations future

Moving New Jersey manufacturers to operate in a world-class environment will require the commitment on many levels. While it is unlikely that NJ will ever again be a major producer of automobiles, as is being done in Ohio, it can still retain a significant role as a major supplier to original equipment manufacturers throughout the world.

If you would like more information about the Next Generation Manufacturing Survey, please contact Robert Loderstedt at (973) 998-9801 or via email at .