Modern Context of Manufacturing Three concepts are crucial to understand manufacturing in today’s world Manufacturing is evolving Manufacturing is global Innovation is critical

Manufacturing is Evolving The idea that manufacturing jobs consist of attaching parts by hand on an assembly line by marginally skilled workers is no longer valid. Tools like Computer-aided design and manufacturing, design for manufacturing, and technological advancements have transformed the factory floor CAM, CAD, DfM, advanced sensors, robotics have transformed the factory over the past 50 years 1,500 workers can now do the work of 5,000 2

The Nature of Factory Work is Changing Factory work in the United States, and among many developed countries around the world, increasingly involves highly skilled workers using sophisticated tools—such as computer simulations, robots, and high-precision cutting machines—to make specialized products At Boeing’s plant in Everett, Washington, for example, workers control high-tech machines that use indoor GPS and laser-positioning systems to assemble the 787’s advanced composite parts. highly skilled workers use sophisticated tools—such as computer simulations, robots, and high-precision cutting machines—to make specialized products

Manufacturing has expanded beyond the factory floor Many products are bundles of goods, services, and software The distinction between manufacturing and services is diminishing Many leading manufacturers provide software and consultant-like services to their customers along with their physical products, which increase the value of those products. For example, Ford offers subscriptions to a voice-activated communications and entertainment service on a number of its vehicles. A recent study by Deloitte showed that, on average, over 20% of manufacturers’ revenue comes from selling these types of services. The percentage is as high as 47% in aerospace and defense manufacturing. 4

Manufacturing is Global A national economy that hopes to succeed must embrace the global economy and recognize that domestic companies must cooperate as well as compete in order to capture opportunities to manufacture and provide goods and services that are demanded around the world. In today’s highly connected, globalized economy, companies need the best teams in the world to stay competitive. A national focus on education and immigration policy for highly skilled individuals is essential to ensure that such teams can be assembled. The quality of the workforce is the number one factor that will attract businesses and create new companies that provide good jobs.

Innovation is Critical Increases in Productivity Improved speed to market Increased competitiveness Advanced technologies and streamlined operations improve product quality and speed to market, thereby increasing the competitiveness of manufacturing operations in the global economy and providing higher-paying jobs.

Innovation is Critical Increases in Productivity Decreases in employment But because these advances make each worker more productive they also mean that fewer employees are needed to produce each car, airplane, or bottle of medications. On-shoring of classical manufacturing jobs can be part of the mix, but the only way to grow and retain jobs to a significant scale is to produce innovative new goods and services that require workers with skills that are not easily transferrable. Unless demand increases

Future opportunities abound Fortunately, there is no shortage of opportunities to create new or improved types of products that people will demand. Emerging technologies, such as additive manufacturing and biologically based manufacturing, are opening up opportunities for exploitation. Future industries based on these technologies will create high-paying jobs for skilled engineers and technicians. What’s more, many existing technologies have not been fully exploited—smart sensors, cloud computing, and nanotechnology being just a few. The entrepreneurs who figure out new ways to translate these technologies into customer needs and wants could create the next multibillion-dollar industry. Taking advantage of these prospects for stronger economic growth and employment will require an increased emphasis on fostering entrepreneurship and innovation at all levels of the education pipeline to create a workforce with the skills necessary to develop, design, and produce innovative goods and services.

Modern Context of Manufacturing Manufacturing is evolving Manufacturing is global Innovation is critical All three of these have important implications for workforce preparation, business strategy and government services. Decisionmakers across business, government, and education must understand these changes and recognize that the goal of manufacturing is making value, not just making things. In 2012, NAE published a workshop summary describing this context. This will be followed up by a major report called “Making Value for America” coming out early 2015 with recommendations for actions to improve competitiveness and job creation amid a changing manufacturing sector Available at www.nae.edu