Manufacturing Survey: 'Arrow is Pointing Up'

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Co-author Mark Frohlich is an associate professor of operations management at Indiana University's Kelley School of Business in Indianapolis. Co-author Mark Frohlich is an associate professor of operations management at Indiana University's Kelley School of Business in Indianapolis.

Researchers behind the 2017 Indiana Manufacturing Survey say employers facing an ongoing work force shortage are turning their efforts and investment to automation. However, authors say more technically-advanced operations will require more skilled workers, so ongoing education and training programs must continue to be a priority. Overall, the survey suggests "a lot of general optimism" in the state's manufacturing industry, but adds executives are keeping an eye on regulation and tax rates as factors in remaining competitive in the global marketplace.

Survey co-author Steve Jones says the atmosphere is ripe for continued manufacturing growth, but companies "can't wait for workers to show up to make things happen." He says automation allows them to "reduce their reliance on the available labor pool and maintain Indiana's place in the competitive global marketplace."

Co-author Mark Frohlich, an associate professor of operations management at Indiana University's Kelley School of Business in Indianapolis, says authors added a new question to this year's survey to find out how companies thought increased automation would impact employment.

"The majority of the respondents really do believe that it's going to add to employment," Frohlich says. "Some of the automation like automatic guided vehicles and material handling systems will displace traditional workers, but my perception is, if you have a good employee, you don't literally throw them out on the street, you retrain them."

Despite the overall positive outlook, Frohlich says respondents identified multiple potential hurdles to continued growth. He says uncertainty about health care tops that list, followed by the corporate tax rate and environmental regulations.

Concerning health care and tax rates, Frohlich tells Inside INdiana Business, "If anything, they're actually just looking for some stability so that you can plan for the future in both of those areas."

Another growing priority for Indiana's manufacturing sector is cybersecurity. Frohlich says about 40 percent of respondents identified cybersecurity as a concern. With increasingly "smart" operations and continued reliance on Internet of Things technology, Frohlich says that the survey will probably "go deeper" on the topic next year.

You can see the full 2017 Indiana Manufacturing Survey by clicking here.

Frohlich says, despite the overall positive outlook, respondents identified multiple potential hurdles to continued growth.
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