Posts Tagged ‘jobs’

Insourcing: A positive trend for U.S. manufacturing

Tuesday, December 4th, 2012

For decades now, it’s been almost axiomatic: manufacturing is better offshored. Conventional wisdom, talking heads and campaigning politicians alike would have you believe American manufacturing is dead, killed off by greedy unions, high taxes, and an onerous regulatory climate. China, Taiwan, Mexico, and other emerging economies offered a seemingly ideal business climate without most of these pesky problems.
But not so fast. Paraphrasing the great Mark Twain, reports of manufacturing’s death may be greatly exaggerated. Some manufacturers are questioning the wisdom the offshoring trend and, in a move that might be called “repatriation,” some big name companies are re-establishing domestic operations here in the U.S. or simply making the strategic decision to keep operations here.
This month’s Atlantic Magazine features a must-read article by Charles Fishman — The Insourcing Boom — which talks about how General Electric is moving much of its appliance-manufacturing operations back home to Appliance Park in Louisville, Kentucky.
In the late 1960s and early 1970s, Appliance Park was the quintessential American manufacturing operation, employing 23,000 at its peak in 1973. But after years of offshoring jobs, the site became a ghost town. In 2011, the Park’s employee population was down to 1,863.
But this year, something interesting began happening. In February, the first new assembly line at Appliance Park in 55 years began making water heaters – a product line that had been previously made in China. A team of employees eliminated parts, reduced material cost by 25%, cut the work hours necessary to assemble the water heater from 10 hours in China to two hours in Louisville. It beat the “China price” price by nearly 20%. Plus, it greatly improved time to market – cutting factory to warehouse time literally from weeks to minutes.
Buoyed by this success, a second assembly line for high-tech refrigerators was launched about a month later. Plans are in the works to open a third building and a third line to produce dishwashers in early 2013. CEO Jeffrey Immelt, commenting in Harvard Business Review, said that outsourcing is “quickly becoming mostly outdated as a business model for GE Appliances.”
Fishman cites Lou Lenzi, head of design for all GE appliances, in the following excerpt:

“What we had wrong was the idea that anybody can screw together a dishwasher,” says Lenzi. “We thought, ‘We’ll do the engineering, we’ll do the marketing, and the manufacturing becomes a black box.’ But there is an inherent understanding that moves out when you move the manufacturing out. And you never get it back.”

It happens slowly. When you first send the toaster or the water heater to an overseas factory, you know how it’s made. You were just making it–yesterday, last month, last quarter. But as products change, as technologies evolve, as years pass, as you change factories to chase lower labor costs, the gap between the people imagining the products and the people making them becomes as wide as the Pacific.

What is only now dawning on the smart American companies, says Lenzi, is that when you outsource the making of the products, “your whole business goes with the outsourcing.” Which raises a troubling but also thrilling prospect: the offshoring rush of the past decade or more–one of the signature economic events of our times–may have been a mistake.

GE is planning to bring about 75% of its $5 billion appliance business back to the U.S. And it is not alone – Fishman cites Whirlpool, Otis, and Wham-O as a few examples of other manufacturers that are bringing operations back from China and Mexico to Ohio, South Carolina, and California. There are other reports of this trend too. In Everything You Need to Know About Insourcing from the White House Blog, Matt Compton says that large manufacturers like Ford and Caterpillar have announced large investments in U.S. facilities – expansions that were previously aimed at facilities in Mexico, China, or Japan. The post names other examples of smaller manufacturers and even service centers that are reinvesting domestically. it also provides these statistics:

  • Business investment is up, growing by 18 percent since the end of 2009
  • We’re exporting more goods and services to the rest of the world. As of October, American exports totaled $2 trillion — an increase of almost 32 percent above the level in 2009
  • Perhaps most importantly, the manufacturing sector is recovering faster than the rest of the economy. Through the course of the past two years, the economy has added 334,000 manufacturing job, and that’s the strongest two-year period of manufacturing growth since the 1990s.

Lisa Harrington also examines this trend in an article in Inbound Logisitics: Is U.S. Manufacturing Coming Back?. She cites further examples of work that was created in or brought back to the U.S. She explores some of the strategic decisions that need to be factored in to where production occurs. The article includes a checklist, Nine Steps to Choosing a Manufacturing Location from Stephen Rogers, author of The Supply Chain Advantage: How to Link Suppliers to Your Organization’s Corporate Strategy.
The article notes that decisions about location must take a total cost perspective. Direct costs were often factored into decisions, while other factors may have been given little consideration. One example:

Labor cost savings are just one factor driving companies to reconsider manufacturing in the United States. To compete more effectively, a growing number of manufacturers are considering shifting operations closer to customers to provide better service, reduce total costs, and enable accelerated growth, according to a survey of 287 manufacturing companies, conducted by market research firm Accenture.

Companies are realizing that the physical location of supply and manufacturing operations can have a significant impact on overall competitiveness. An unbalanced network–where regional supply is physically separated from regional demand–makes it difficult for the organization to deliver on the very customer expectations that drive growth.

Not a return to the days of yore
Fishman notes that such “insourcing” will not suit all companies – basic work processes, such as mass market clothing manufacturers, will likely never return. Relocation in the U.S. seems to suit companies with high-tech and complex manufacturing process and products that require continuous innovation and improvements.
He cautions that American manufacturing will never return to its prior peak, and he describes various ways that things have changed: “Back in the ’60s, Appliance Park was turning out 250,000 appliances a month. The assembly lines there today are turning out almost as many–with at most one-third of the workers.” But he cites the “multiplier effect” that the presence of a large manufacturer can have. We saw the multiplier effect in action when the auto industry was in risk – it wasn’t just the auto jobs that were threatened, but entire communities – including businesses as diverse as parts suppliers to luncheon delis.
Related
Manufacturing May Be Coming Back to the U.S., Long-Term – an article in Forbes by Robert McCutcheon, the U.S. industrial products leader of PwC.
The Reshoring Initiative – founded by Harry Moser in 2010, an industry-led effort to bring manufacturing jobs back to the United States. The initiative works with U.S. manufacturers to help them recognize their profit potential as well as the critical role they play in strengthening the economy by utilizing local sourcing and production.
M.I.T. Forum for Supply Chain Innovation
a community of academics and industry members whose support allows Forum researchers to provide customer-focused solutions to design and manage the new supply chain.
Investing in America: Building an Economy That Lasts – White House report

Celebrate Memorial Day 2012 by hiring a Vet: You may qualify for a tax credit

Friday, May 25th, 2012

In all the hype about barbecues and beaches, it’s easy to forget the original history of Memorial Day was as a day of remembrance for those who died in our nation’s service. Originally called “Decoration Day,” the tradition began in 1868, a few years after the close of the Civil War. In early commemorations, flowers were placed on the graves of Union and Confederate soldiers at Arlington National Cemetery, but after WWI, the day of remembrance was changed to honor those who died fighting in any war. Over time, many started using the day as a day of remembrance for not just vets, but for commemorating deceased family and friends, as well.
If you’d like to take a few moments to honor the men and women who died in military service, you can visit the Veteran’s Affairs Memorial Day page to learn about related events and traditions.
While we honor the dead, let’s not forget about the living vets who are returning from Iraq and Afghanistan to face a difficult job market, among other re-acclimation challenges they face when returning home. The unemployment rate for veterans returning from Iraq and Afghanistan is about 12%, or 4% higher than the overall unemployment rate.
Potential Tax Credit if You Hire a Vet in 2012
Do you know about the Work Opportunity Tax Credit (WOTC) for hiring vets? It’s a provision in the VOW to Hire Heroes Act 2011. The Act allows employers to claim the WOTC for veterans certified as qualified veterans who begin work before January 1, 2013. Credits are substantial: as high as $9,600 per qualified veteran for for-profit employers or up to $6,240 for qualified tax-exempt organizations. There are a number of factors that determine the credit amount, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. Learn more about potential tax credits for hiring veterans from the IRS.
Additional Resources
Department of Labor Hiring Veterans – Compliance Programs
CareerOneStop offers employer resources for hiring veterans, including a Military to Civilian Occupation Translator helps service members match military skills and experience to civilian occupations.
US Chamber of Commerce: Hiring Our Heroes, including a map of upcoming hiring fairs.

5 most dangerous jobs for teens & resources for keeping young workers safe

Tuesday, June 7th, 2011

Every year as summer approaches and kids join the work force, many for the first time, the National Consumer League (NCL) offers its updated list of the 5 most dangerous jobs for teens, along with excellent advice for parents and teens on keeping the work experience safe. In 2011, their picks for the most dangerous teen jobs are:

  • Agriculture: Harvesting Crops and Using Machinery
  • Construction and Height Work
  • Traveling Youth Sales Crews
  • Outside Helper: Landscaping, Groundskeeping, and Lawn Service
  • Driver/Operator: Forklifts, Tractors, and ATV’s

The NCL notes that the five worst jobs for teens are not ranked in order. They earn their place on the list because they all share higher than normal injury or fatality rates. If you are an employer who hires teens, a parent with working age teens, or a teen workers, please take the time to look at the excellent report that the NCL has compiled.
We’ve compiled some additional resources for teen safety. While many are appropriate for all groups, we’ve sorted them by primary relevance for employers, teens, and parents.
Resources for employers
Employers need to take particular care with young workers. It’s in the teens best interest and it is in every employer’s best interests as well: According to HR Daily Advisor, “A recent DOL decision assessed penalties of over $277 thousand against movie theaters for employing youths in dangerous jobs and for working them illegally long hours. Have summer hiring plans? Better review youth hiring rules.” The site offers two tip sheets for employers:
Summer Hiring? Watch for Tricky Child Labor Laws and Summer Jobs for Kids–Many Restrictions on Duties and Hours
Interstate Labor Standards Association – an organization of state labor department officials. Find your state contacts and get information on Child Labor Laws.
5 Leadership Lessons: What You Need to Know about Developing Teen Leadership
OSHA: Young Workers: Employers
NIOSH: Young Worker Safety & Health
Washington’s Department of Labor & Industries: Youth Job Safety Resources
National Children’s Center for Rural and Agricultural Health and Safety
Iowa: Iowa Safe Youth @ Work
DOL: Yout Rules: for Employers
For teen workers
American Society of Safety Engineers: Target Teen Safety Tool Kit, including the The ASSE Interactive Zombie Game
OSHA: Young Workers – site includes a variety of safety videos for teen workers, as well as resources
OSHA Young Worker Summer Job Safety
Construction
Farmwork
Landscaping
Lifeguarding
Parks & Recreation
Restaurants
Safe Driving
DOL: Youth Rules: for Teens
Farm Safety 4 Just Kids
California: Young Workers
Canada: Passport to Safety
CCOHS: Young Workers Zone!
CDC: Are You a Working Teen? What you should know about safety and health on the job
CDC: ¿Eres un Joven que Trabaja? Cosas que Debes Saber sobre la Seguridad y la Salud en el Trabajo
Parents
KidsHealth: Making Sure Your Teen’s Job is Safe
DOL: Youth Rules: for Parents
OSHA: Young Workers – Parents
DOL: Youth & Labor

Parental alert: 2010’s Five Worst Teen Jobs

Wednesday, May 26th, 2010

On this blog, we are usually speaking to employers or workers. Sometimes we are addressing people in the insurance industry – claims adjusters, safety professionals, insurance geeks, and the like. But today we have a different target audience: parents of teens who are about to embark on their first summer job.
Parents: please do not assume that your kids health and well being will be looked after while on the job – make it your business to dig deeper.
Every year, in some of the most pedestrian-sounding jobs, kids are maimed and killed while working. Who would think that a job in a doughnut shop could lead to a 17-year old drowning in an uncovered cesspool? Or that a summer job on a lawn care crew could result in a 14-year old being killed when pulled into a wood chipper? Some of the most compelling advocates for teen worker safety are teen survivors themselves: Candace Carnahan who lost her leg to a conveyor belt; Kristi Ruth, who lost an arm that was entangled in equipment while working at her family farm; and four kids who tell of their life-changing injuries at summer jobs in a series of powerful videos.
Most dangerous jobs for teens
Millions of teens will be looking to join the work force over the next few months, and with a teen unemployment rate hovering around 30%, there will be strong competition for positions – and some young workers may be tempted to take jobs that could endanger their health. The National Consumers League (NCL), which coordinates the Child Labor Coalition, has issued a report detailing 2010’s Five Worst Teen Jobs report to remind teens and parents to be alert and informed about the hidden dangers that many jobs hold.
2010’s Five Worst Teen Jobs

  • Traveling Youth Sales Crews
  • Construction and Height Work
  • Outside Helper: Landscaping, Groundskeeping and Lawn Service
  • Agriculture: Harvesting Crops
  • Driver/Operator: Forklifts, Tractors, and ATV’s

The article offers information and details about the potential risks and hazards for each of these job categories, as well as common risks that teens face at work. It also offers suggestions for parents on how to be involved in their teens job choices, and what to look for.
More tools for parents
Here are some additional resources to help you keep your teens safe at work:

  • Making sure your teen’s job is safe – great advice from the award-winning KidsHealth by Nemours, one of the largest nonprofit organizations devoted to children’s health. It includes a list of questions and discussion points to raise with your teen before he or she is hired, advice for checking out the job site, and how to sustain a discussion about work safety once your teen starts the job.
  • Tips for parents with working teens (PDF) – a brief fact sheet with advice from the California Resource Network for Young Workers’ Health and Safety
  • Working the Smart Shift: Helping parents help their teens avoid dangerous jobs – Safety guidelines from the Child Labor Coalition, along with a list of telephone numbers for state labor department resources.
  • Do you have a working teen? – advice and resources for parents from the Occupational Health & Safety Administration
  • State Labor Laws – The U.S. Department of Labor offers links to state Labor Departments and state resources

Other teen safety resources

Celebrating American workers

Tuesday, May 8th, 2007

U.S. Steel - female workersThe website for National Archives is a national treasure. The National Archives and Records Administration (NARA) is the Government agency that preserves and maintains important historical materials and makes them available for research or public access. Many records have been digitized and the site has an extensive array of exhibits that range from the educational to the entertaining.
One that we chanced on recently that may be of some interest to readers of this blog is The Way We Worked. This is an extensive exhibit, primarily photographic, that offers a glimpse of American workplaces spanning the mid 19th to the late 20th centuries. The exhibit graphically depicts how the nature of the work that we do has changed and offers this commentary:

… In 1870 only a handful of factories employed over 500 workers. By 1900, 1,063 factories employed between 500 and 1,000 people. During the first half of the 20th century, many African American women worked as domestics in private homes, but during World War II, they took advantage of new opportunities at shipyards and factories.
By the end of the 20th century, a dramatic shift took place, sending individuals who had worked in factories, plants, and mills into jobs in offices, stores, and restaurants.

The site has exhibits on what people wore to work and what tools they used. Also, in a section about “conflict at work” there are photos focusing on labor issues. The section that attracted our attention is a compilation of photos on dangerous or unhealthful work. Each of the photos are captioned and offer interesting commentary. The photo of the women that we’ve used in this post depicts workers at U.S. Steel’s Gary, Indiana Works, taken sometime between 1941 and 1945. The caption refers to the workers as “top women” and states that, “Their job is to clean up at regular intervals around the tops of twelve blast furnaces. As a safety precaution, the girls wear oxygen masks while they are doing the clean-up job.”
The photos are also available for purchase in book form and can be viewed at the following locations in a traveling exhibit:

  • Morrow, GA., March 10 – May 20, 2007
    –National Archives and Records Administration – Southeast Regional Archives

  • Kansas City, MO. , June 9 – August 19, 2007
    –Kansas City Public Library

  • Ocala, FL., September 8 – December 18, 2007
    –Central Florida Community College