Reshoring Buoys Optimism
Many people don’t like studying geography in school, but it has a dramatic effect on compensation. That’s why 45 percent of college graduates move out of their birth states by age 30 vs. only 27 percent of high school graduates.
Traditionally, State of the Profession salaries vary from region to region. Those fluctuations are usually determined by the local cost of living. The South (Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia), which is home to 25 percent of respondents, boasts the highest salaries for the first time since ASSEMBLY began tracking the statistic 17 years ago.
For instance, 33 percent of assemblers in the South make more than $100,000 a year. By comparison, only 3 percent of assembly professionals in the West (Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming) earn six-figure salaries.
But, those individuals can boast that they work fewer hours per week than their counterparts. They work an average of 46 hours a week vs. 50 hours for assemblers in the South.
Only 13 percent of respondents in the South expect to work more hours during the next 12 months vs. 34 percent in the Midwest (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin). However, 70 percent of assemblers in the South expect a raise in the near future vs. only 48 percent in the Midwest.
Of course, money doesn’t always buy happiness. Assembly professionals in the Northeast (Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont) tend to be more satisfied than their peers in other parts of the country, even though they have the second lowest average salaries. Fifty-eight percent claim to be “extremely satisfied” vs. 47 percent of assemblers in the West.
One reason for that extra bit of happiness in the Northeast may be due to future investment in assembly operations. More than half (53 percent) of respondents expect their companies to improve operations during the next three years vs. only 40 percent in the West. In addition, 44 percent of respondents in the Northeast claim that their company has increased staff size during the past year, compared to 32 percent of assemblers in the West.
Enrico Moretti, a professor of economics at the University of California Berkeley and author of a recently published book entitled The New Geography of Jobs(Houghton Mifflin Harcourt) believes that an unprecedented redistribution of jobs, population and wealth is under way in the United States.
“America’s new economic map shows growing differences, not just between people but especially between communities,” claims Moretti.
“Today, there are three Americas. At one extreme are the brain hubs—cities like San Francisco, Boston, Austin and Durham—with a well-educated labor force and a strong innovation sector. Their workers are among the most productive, creative and best paid on the planet.
“At the other extreme are cities once dominated by traditional manufacturing, which are declining rapidly, losing jobs and residents,” adds Moretti. “In the middle are a number of cities that could go either way.
“The three Americas have been growing apart at an accelerating rate,” warns Moretti. “This divergence is one the most important recent developments in the United States and is causing growing geographic disparities in all aspects of our lives, from health and longevity to family stability and political engagement.”
Size Makes a Difference
Salary and job satisfaction in the assembly profession are usually influenced by the size of a manufacturer. For instance, assemblers who work in companies with more than 1,000 employees tend to be well compensated. Indeed, 72 percent of assemblers at those companies earn more than $80,000. On the other hand, only 42 percent of assemblers at small manufacturers (companies with less than 50 employees) earn more than $80,000.
Assembly professionals who work in larger companies also claim to be a happier (56 percent) than people who work for small firms (46 percent).
Assemblers in the fabricated metal products industry earn higher salaries than their peers in other industries. For instance, they earn 18 percent more than the national average of $87,383.
Assembly professionals in the contract manufacturing industry also boast higher-than-average compensation. However, respondents who work for electrical equipment and appliance manufacturers earn 15 percent less than the national average. Assembly professionals in the computer and electronic products industry earn salaries that closely match the national average.
Manufacturing engineers (57 percent of respondents) rank slightly ahead of design engineers (10 percent of respondents) when it comes to compensation. According to the 2012 State of the Profession survey, manufacturing engineers earn an average of $75,942 vs. $70,365 for design engineers. However, design engineers have been working two more hours per week than their colleagues.
Age is another key factor that affects compensation. For instance, assembly professionals who are more than 60 years old (20 percent of respondents) typically earn the highest salaries. They average $120,633 vs. assemblers who are under 40 (11 percent of respondents), who earn an average of $73,418.
Salaries also fluctuate dramatically based on type and level of education. For example, assembly professionals with just a bachelor’s degree (39 percent of respondents) earn an average of $92,355. However, assemblers armed with a master’s degree (21 percent of respondents) earn $106,618.
Obtaining a master’s in business administration (MBA) is one way to ensure a higher salary. The ASSEMBLY survey discovered that MBAs (15 percent of respondents) make an average of $14,196 more per year than non-MBAs. However, MBAs work three more hours per week than non-MBAs.
More Time at Work
As the economy picked up steam, assemblers worked an average of 49 hours a week in 2011 vs. 47 hours in 2010. In fact, 81 percent of 2012 State of the Profession respondents work more than 40 hours a week. Assembly professionals in the plastics and rubber products industry work the longest weeks (55 hours), followed by machinery manufacturers (51 hours) and computer and electronic product manufacturers (50 hours). Assemblers in the electrical equipment and appliance industry have the shortest work weeks (45 hours).
Unfortunately, there’s no end in sight for long work weeks. One-quarter (24 percent) of assemblers claim that their average workweek will increase during the next 12 months. More than one-third (42 percent) of assembly professionals who work in the machinery manufacturing industry expect to work more hours during the next 12 months vs. only 10 percent of assemblers in the electrical equipment and appliance industry.
More than one-third (34 percent) of assemblers in the Midwest, which is home to the rebounding auto industry, expect to work more hours a week during the year ahead. On the other hand, only 13 percent of assemblers in the South expect to work longer hours.
Assembly professionals who work for small manufacturers plan to spend more time at work than their counterparts in larger companies. Almost one-third (30 percent) of respondents who work for manufacturers with less than 50 employees expect to work more hours per week in the next 12 months. However, only 12 percent of assemblers who work for companies with more than 1,000 employees foresee longer work weeks ahead.
The majority (63 percent) of respondents claim that they are doing the same amount of work-related travel today vs. one year ago. Only 17 percent of assemblers say they are doing more travel. Those individuals are more likely to be design engineers (30 percent) rather than manufacturing engineers (10 percent).
Fifty 50 percent of respondents claim that time constraints will affect their ability to do their jobs during the next 12 months. Time constraints will pose the biggest challenge to assemblers who work in large companies and the plastics and rubber products industry, the transportation equipment industry and the fabricated metal products industry.
Many assemblers will spend more time trying to improve manufacturing flexibility. Indeed, two-thirds (66 percent) of respondents believe that flexible assembly systems will contribute to their companies’ overall competitive advantage during the next 12 months.
More than three-fourths (82 percent) of assembly professionals in the fabricated metal products industry claim they will be focusing on flexibility, followed by electrical equipment and appliance manufacturers (68 percent) and computer and electronic products manufacturers (66 percent).
When different versions of similar products are designed to be assembled in the same sequence, they can be built in the same plant. This maximizes efficiency and allows manufacturers to respond quickly to changing customer preferences.
During the past decade, the auto industry invested heavily in flexible equipment and production processes. For instance, Chrysler’s Belvidere, IL, plant now builds the Dodge Dart compact sedan on the same assembly line as the Jeep Compass and Jeep Patriot sport utility vehicles. And, Ford’s Michigan Assembly Plant in Wayne, MI, produces all-electric and hybrid versions of the Ford Focus on the same line that builds traditional internal combustion engine versions of the compact sedan.
“In today’s era of permanent volatility, manufacturers need agile operating models to surpass the competition,” says Richard Bergmann, managing director for manufacturing at Accenture. “[Our recent] survey indicates that North American companies have bold plans to improve their flexibility.
“An adaptable, cost-efficient global manufacturing network not only improves financial performance, but can help respond to fast-changing market demands and maintain the high levels of customer satisfaction that underpin long-term growth,” adds Bergmann.
Satisfaction Not Guaranteed
Most State of the Profession respondents claim to be satisfied with their jobs, but a closer look at the data reveals some variations. For example, design engineers are happier than manufacturing engineers. Indeed, 48 percent of design engineers claim to be “highly satisfied” vs. 40 percent of manufacturing engineers.
Overall, 73 percent of assemblers who claim to be “highly satisfied” with their jobs earn more than $80,000 a year, while 42 percent of assemblers who are “not satisfied” earn less than $80,000. Not surprisingly, individuals who are “not satisfied” typically do not receive cash bonuses and provide little or no input on budgeting new assembly equipment.
The happiest assemblers work in the computer and electronic product industry, where 67 percent of respondents claim to be “highly satisfied” with their jobs. Other industries with highly satisfied employees include fabricated metal products (60 percent) and electrical equipment and appliance manufacturing (50 percent). In contrast, only 12 percent of assemblers in the plastics and rubber products industry are “highly satisfied.”
Job satisfaction is defined in different ways by different people. But, the top three reasons cited by assemblers are: “My job is challenging,” “I enjoy my work” and “Constant changes keep things interesting.”
“Lean manufacturing has allowed me to develop new methods to increase throughput and show management that I have other skills,” says a manufacturing engineer in the transportation equipment industry.
“My company is growing,” adds a design engineer in the electrical equipment and appliance industry. “There are new opportunities to learn and lead. I feel like I matter to my company.”
“I have a good working relationship with top management, sales and production,” says a plant manager in the fabricated metal products industry. “Small company size allows me to get involved in all aspects of the operation.”
However, some respondents are less satisfied with their jobs. Common complaints from assemblers include low compensation, poor leadership, instability and lack of resources.
“My rating would be higher if I wasn’t pulled into supporting many nonengineering tasks,” says a manufacturing engineer in the machinery industry.
“My company has downsized and my role has changed to include responsibilities that are outside of my area of interest,” laments a design engineer at a computer and electronic products manufacturer.
“We have cut and cut, so we must work with less staff to create more of a return on sales,” notes a manufacturing manager in the plastics and rubber products industry. “That affects the work day, morale and productivity of the remaining staff.”
“Much of my frustration is caused by road-blocking managers who have been here too long,” says manufacturing engineer in the fabricated metal products industry. “They do not understand new concepts, such as lean manufacturing, but claim to.”
Almost two-thirds (65 percent) of assemblers are under pressure to lower production costs, but it depends on the size of their company. For instance, only 28 percent of assemblers who work for smaller manufacturers (companies with less than 50 employees) are worried about production costs vs. 67 percent of assemblers who work for large manufacturers (companies with 1,000 or more employees).
Respondents in the fabricated metal products (86 percent) and computer and electronics industry (82 percent) are under more pressure to lower production costs than their peers in other industries
Assembly professionals in the transportation equipment sector (38 percent) are less concerned about lowering production costs. They are much more concerned about issues such as maintaining quality and finding skilled workers.
The transportation equipment industry is also bullish about investing in more capital equipment. Other industries that expect to commit more resources to new production equipment in the near future include fabricated metal products (60 percent), electrical equipment and appliance manufacturers (53 percent) and machinery manufacturers (51 percent).
Manufacturers are engaged in a wide variety of sustainable initiatives, such as recycling, wind turbines, energy-efficient lighting, landfill gas and solar panels. Almost half (48 percent) of State of the Profession respondents claim that their assembly plant has implemented some sort of green manufacturing program. That’s the highest number since ASSEMBLY began tracking this topic four years ago.
Green manufacturing activity is quite common in the transportation equipment industry, where 57 percent of assemblers work in plants that have implemented environmental programs.
For instance, Volkswagen’s new assembly plant in Chattanooga, TN, harvests rainwater to supplement 653,000 gallons of water per year used for gray water, reducing the overall water usage onsite. The paint shop uses a dry-scrubber system to collect paint overspray, unlike traditional shops that use water. The powder is collected and sent to a local company where it is used to make concrete.
In addition, the dry scrubber system makes it possible to recycle 85 percent of the air in the spay booths. Due to this air recycling, the dry-scrubber system saves 42 percent of the power and 85 of the heating energy for conditioning the air inside the spray booths.
Volvo Trucks’ New River Valley (NRV) assembly plant in Dublin, VA, recently became the first facility in the United States to be certified to the ISO 5000, a new international framework for organizations to implement an energy management system. Green technologies, such as solar water heaters and infrared heaters, helped drive energy reductions at the 30-year-old factory.
“All layers of our organization are dedicated to implementing new ways to reduce energy,” says Lars Blomberg, general manager of the NRV assembly plant. “Reducing energy while improving efficiency has helped us remain very competitive during a time when some companies are moving their manufacturing operations to lower cost environments.”
Assemblers in the fabricated metal products (48 percent), computer and electronic products (45 percent), electrical equipment and appliance manufacturing (43 percent) and machinery manufacturing (43 percent) industries are also actively engaged in green programs.
Large manufacturers (companies with 1,000 or more employees) are more likely to be involved with green initiatives. For example, 83 percent of assemblers in that category have implemented sustainability programs during the last 12 months. On the other hand, only 27 percent of small manufacturers (companies with fewer than 50 employees) have gone green.
ASSEMBLY magazine would like to thank all the respondents who participated in its 17th annual State of the Profession survey. The survey was conducted online in March 2012 by BNP Media’s Market Research Division. It was sent to more than 9,000 randomly selected subscribers with an e-mail address.
The charts and tables in this report highlight the major data gleaned from the survey responses. On some of the questions, the response rate does not equal 100 percent due to rounding or surveys that contained one or more unanswered questions. In cases where multiple responses were allowed, the total may exceed 100 percent.
Special thanks to Andrea Littles for her assistance with online survey design, distribution and tabulation.
|Will Additive Manufacturing Reshape Assembly?|
Additive manufacturing and 3D printing have been capturing a lot of attention lately, with magazines ranging from Business Week to the Economist proclaiming it to be the shape of things to come in manufacturing.
Additive manufacturing “prints” an object from a digital file by depositing one layer of material on top of another, rather than starting with, say, a piece of forged steel and cutting, sawing or milling it away. It allows companies to more easily manufacture complex shapes and structures, such as fuel nozzles and blades, that have been traditionally difficult to make.
“[Additive manufacturing is] one of the biggest things to happen in manufacturing in some time,” claims Luana Iorio, a material scientist at GE Global Research. “If you look at the megatrend of mass customization, additive manufacturing is the way that people will be able to get things tailor-made.
“In traditional manufacturing, you’ve got to produce tooling that is often very expensive, and you need to produce tens of thousands of parts that are identical to recoup the cost,” adds Iorio. “With additive manufacturing, there is none of that. It’s just as easy to print the next part customized and different from the previous part, as it is to produce the same thing over and over again.
“We’re looking at applying additive manufacturing to polymers, ceramics, metals [and other] kinds of materials for many different components across the GE product line,” Iorio points out. “[We’re currently tackling challenges such as] How can we get more throughput from these machines? How can we make the parts bigger? How can we make the material properties more reliable?”
According to ASSEMBLY’s 2012 State of the Profession study, 29 percent of respondents claim that their company will be using 3D printing, laser sintering and other additive manufacturing technology during the next 12 months.
Half (49 percent) of electrical equipment and appliance assemblers say they plan to use additive manufacturing. Other industries interested in the technology include machinery manufacturers (32 percent), computer and electronic product manufacturers (29 percent) and transportation equipment manufacturers (25 percent).
Not surprisingly, large manufacturers (companies with 1,000 or more employees) are more than twice as likely to invest in additive manufacturing than small manufacturers (companies with less than 50 employees). More than one-third (45 percent) of respondents at large manufacturers plan to use 3D printing or laser sintering during the next 12 months vs. only 21 percent of small manufacturers.